Total Fina Reportedly May Bid for Conoco

LONDON —  France’s Total Fina Elf would not comment on a report Sunday that it may bid for U.S. rival Conoco Inc., but its U.S. ambitions are well known--and it may not be the only European oil company bent on wrecking the Phillips Petroleum Co.-Conoco merger agreed to late last year.

A report in Britain’s Sunday Telegraph said Total Fina Elf was considering possibly breaking up Conoco’s planned $35-billion merger with Phillips; the newspaper did not name its sources. Total Fina Elf spokesman Tom Saunders declined to comment. Carlton Adams, spokesman for Conoco, said the company does not comment on speculation.

ChevronTexaco Corp., the second-biggest U.S. oil company behind global leader Exxon Mobil Corp., also may try to disrupt the merger, the newspaper said, citing unidentified sources. Houston-based Conoco and Phillips, based in Bartlesville, Okla., plan to form the third-biggest U.S. oil company later this year.

But as far back as November, when Philips and Conoco agreed to merge, leading shareholders told Reuters that both Total Fina and Anglo-Dutch rival Royal Dutch/Shell Group had been sizing up Conoco before Phillips acted.

Either could still appeal to Conoco shareholders, who were offered no takeover premium in what some consider a marriage that benefits only Phillips.

Analysts on both sides of the Atlantic believe that U.S. oil industry consolidation, which has been moving at a rapid clip since 1998, has further to go. Total Fina made clear to shareholders last year that it wanted to be a part of that process and gain a foothold in the key U.S. market.

With the $30-a-barrel oil price bonanza of recent years now history, the pressure is back on the big players to find a way to grow despite sluggish demand for crude. Total Fina is seen as having a better chance than many of getting U.S. regulatory agreement.

One problem any counter-bidder for Conoco would face is the hefty $550-million breakup fee that the company and Phillips have written into their deal.

El Segundo-based Unocal Corp. is the only remaining North American opportunity on Conoco’s scale, though analysts see the fit as less good for Total Fina Elf.