Oil and Gas (Enterprise) Act 1982 facts for kids
| Act of Parliament | |
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| Long title | An Act to make further provision with respect to the British National Oil Corporation; to abolish the National Oil Account; to make further provision with respect to the British Gas Corporation; to make provision for and in connection with the supply of gas through pipes by persons other than the Corporation; to amend the Petroleum (Production) Act 1934 and to make further provision about licences to search for and get petroleum; to repeal and re-enact with amendments sections 2 and 3 of the Continental Shelf Act 1964; to extend the application of the Mineral Workings (Offshore Installations) Act 1971 and the Offshore Petroleum Development (Scotland) Act 1975; to amend the Miscellaneous Financial Provisions Act 1968, the Petroleum and Submarine Pipe-lines Act 1975 and the Participation Agreements Act 1978; and for connected purposes. |
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| Citation | 1982 c. 23 |
| Introduced by | Michael Howard (Second Reading) (Commons) |
| Territorial extent | Great Britain |
| Dates | |
| Royal assent | 28 June 1982 |
| Other legislation | |
| Amended by |
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Status: Amended
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The Oil and Gas (Enterprise) Act 1982 was a law passed by the Parliament of the United Kingdom. It was a big step towards selling off parts of the UK's oil and gas industries that were owned by the government.
This Act allowed the government to sell shares in Britoil. Britoil was the part of the British National Oil Corporation (BNOC) that found and produced oil. The law also ended the special right of the British Gas Corporation to be the only company that could transport and supply gas. This opened up the gas market for other companies to join in. The Act also included other rules about oil and gas, like how to get licences to search for oil and gas, and rules for safety on offshore platforms.
Contents
Why was the Act created?
For a long time, the British gas industry was owned by the government. This is called nationalisation. The Gas Act 1972 had set up the British Gas Corporation (BGC). BGC was in charge of running the entire gas industry.
The British National Oil Corporation (BNOC) was created in 1975. BNOC had the power to find, produce, move, store, and sell oil. It was like two businesses in one: one part produced oil, and the other part traded it.
In the early 1980s, Margaret Thatcher's government believed that industries run by the government were not always efficient. They wanted to introduce a system where private companies would compete. This is called privatisation.
Nigel Lawson, who was the Secretary of State for Energy at the time, explained this idea. He said that the government's job was not to run businesses. He believed that private companies should own and control industries unless there was a very good reason for the government to be involved.
The Oil and Gas (Enterprise) Act allowed the government to sell shares in the oil-producing part of BNOC. It also changed how the trading part of BNOC worked. The Act gave new powers to sell off parts of the British Gas Corporation. It also ended BGC's special right to be the only company supplying gas.
The Act also added rules for oil and gas companies, such as how to get licences to search for oil. It also improved safety rules for offshore platforms. This was partly because of a serious accident, the Alexander L. Kielland disaster, which happened in March 1980.
What did the Oil and Gas (Enterprise) Act 1982 do?
The Oil and Gas (Enterprise) Act 1982 became law on 28 June 1982. It had many parts, but its main goals were:
- To change how the British National Oil Corporation (BNOC) worked.
- To get rid of the National Oil Account, which was a special government fund.
- To change how the British Gas Corporation (BGC) operated.
- To allow other companies to supply gas through pipes, not just BGC.
- To update rules for getting licences to search for and produce oil.
- To update laws about safety zones around offshore oil and gas platforms.
The Act was divided into five main parts, covering oil, gas, petroleum licences, and offshore activities. It also included four schedules, which are like extra lists of details and changes to other laws.
What happened after the Act?
The part of the British National Oil Corporation (BNOC) that explored for and produced oil was turned into a new company called Britoil. In November 1982, and again in August 1985, shares in Britoil were sold to the public on the stock market. At one point, Britoil was one of the largest oil and gas producers in the North Sea. However, Britoil was later sold to BP in 1988.
After 1983, the price of oil started to fall. Because of this, BNOC's trading business was no longer making money. So, BNOC was officially closed down on 27 March 1986.
The British Gas Corporation (BGC) remained a single company for a while. It naturally didn't want new companies to compete with it in the gas market. BGC also had agreements to buy all the gas from UK gas fields. More laws were needed to truly open up the gas supply industry to competition. This happened with the Gas Act 1986.
Later changes to the law
The British gas industry was fully privatised in 1986 by the Gas Act 1986. This Act got rid of the British Gas Corporation and created a new company called British Gas plc. The 1986 Act also set up a system for licensing gas companies, created a Gas Consumers’ Council to protect customers, and established a regulator called the Office of Gas Supply (OFGAS).
Another law, the Oil and Pipelines Act 1985, removed the first part of the 1982 Act. It officially closed down the British National Oil Corporation and moved its assets and responsibilities to the Oil and Pipelines Agency.
Many parts of the 1982 Act were later removed or changed by other laws, especially the Petroleum Act 1998.
See also
- Oil and gas industry in the United Kingdom
- North Sea Oil
