Privatization through International Project Financing: The Case of Oil & Gas Industry in India

Abstract

It was a dry chilly evening of February 15th 1993 in New Delhi. Mr. Ian Scott, sitting in the cozy environs of his suite in Le Meridien hotel, was sipping Indian tea, which he relished during tense moments. As Treasurer and Chief Financial Officer of Tevron Inc., a US based MNC in oil & gas sector, he was the sole architect of making investment decision on behalf of his company in the oil and gas sector in India. He was pondering over the discussions he had with the officials of the Ministry of Petroleum and Natural Gas, Government of India and Oil and Natural Gas Commission (ONGC), a public sector undertaking in the upstream side of Oil and Gas sector in India. He lit his pipe, walked up to the window and took birds view of the surroundings. At dusk, the upright stone structure of India Gate, a warrior’s memorial inspired him of the strong will power of the Indian people. The view of the majestic president house overlooking North and South Block and the parliament house, the seat of power, reminded him of the unflinching democratic tradition of Indian politics. He was convinced that the Indian government and the people were committed to economic liberalization which started in 1991 but unfolding of events in the coming years were crucial to entry decision of multinational corporations.