The Build-up of the British Government’s Involvement in Oil

Abstract

The sale of the British government’s oil assets occurred at the end of a long history of government involvement in the oil industry. This chapter provides an overview of how the government came to own oil assets and sets the stage for the government’s decision to sell them. The two consistent factors in the government’s involvement in the oil industry from 1914 to the mid-1980s were its investment in BP and its reliance on private international oil companies. The circumstances for the government’s policy changed considerably over time. From the turn of the century through the Second World War, oil was primarily a military fuel. During this period, the industry was dominated by a few large international oil companies. The end of the era was marked by the decline of Britain’s influence in the Middle East in the 1950s. During this time, the government became the major shareholder in the Anglo-Persian Oil Company (APOC) which became the Anglo-Iranian Oil Company (AIOC) in 1935 and finally British Petroleum (BP) in 1954.