Total Fina may bid for Conoco

France“s Total Fina Elf would not comment on a report in mid-January that it may bid for US rival Conoco, Inc., but its US ambitions are well known-and it may not be the only European oil company ben…

France“s Total Fina Elf would not comment on a report in mid-January that it may bid for US rival Conoco, Inc., but its US ambitions are well known-and it may not be the only European oil company bent on destroying the Phillips Petroleum Co.-Conoco merger agreed to late 2001. A recent report in Britain“s Sunday Telegraph said Total Fina Elf was considering possibly breaking up Conoco“s planned US$ 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 US oil company behind global leader Exxon Mobil Corp., may also try to disrupt the merger, the newspaper said, citing unidentified sources. Houston-based Conoco and Phillips, based in Bartlesville, Oklahoma, plan to form the third-biggest US oil company later this year. But, as far back as November 2001, when Philips and Conoco agreed to merge, leading shareholders said that both Total Fina and Anglo-Dutch rival Royal Dutch/Shell Group had been sizing up Conoco before Phillips acted. Analysts on both sides of the Atlantic believe that US oil industry consolidation, which has been moving rapidly since 1998, has further to go. Total Fina made clear to shareholders in 2001 that it wanted to be a part of that process and gain a foothold in the key US market. With the US$ 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 US regulatory agreement. One problem any counter-bidder for Conoco would face is the massive US$ 550-million break-up 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.