State owned Oil and Natural Gas Corporation said that it has not heard from the government on share buyback but hastened to add that all of its liquid cash is tied up in capital expenditure that would rise by 11% to INR 31,000 crore next fiscal.

Mr Sudhir Vasudeva CMD of ONGC said that "We have not been asked to do any such thing [buyback shares].”

Stock repurchase or share buyback is the reacquisition by a company of its own stock. The government is asking cash-rich public sector firms to buyback shares so as to meet its disinvestment target.

Mr Vasudeva, however, said it was a myth that ONGC had a cash surplus of INR 27,000 crore. After accounting for the dividend it has to pay and INR 8,200 crore set aside in a site restoration fund with State Bank of India, the liquid cash with ONGC was only INR 14,000 crore.

Site restoration program is for properly plugging and abandoning orphan oil or gas wells and to restore sites to approximate pre wellsite conditions suitable for redevelopment. Mr Vasudeva said that "Our capital expenditure next fiscal is INR 31,000 crore, all of which is to be met from internal resources. Given the size, we may have to dip into our cash reserves.”

The capex for 2012-13 is higher than INR 28,000 crore capital expenditure for 2011-12. ONGC is investing heavily to maintain output from its old fields as it targets a 15% rise in crude oil production to 28 million tonne by March 2014.

(Sourced from ET)