The British government said it will scrap BNOC.

Analysts said the unexpected move to abolish British National Oil Corp. by the world’s fifth-largest oil-producing nation represented another step toward having oil prices determined by market forces rather than by government decree. BNOC, which buys 51% of Britain’s North Sea oil at the official price of $28.65 a barrel and resells it, has been operating at a loss. BNOC recently had to ask the government for $27 million to cover trading losses for January and February. Energy Minister Alick Buchanan-Smith said the government would ask Parliament to approve legislation to replace BNOC with a much smaller successor, the Government Oil and Pipeline Agency.