A planned C$19.7billion ($15.8 billion) takeover bid by French oil giant Total for Canadian oil explorer Nexen is hanging in the balance today, The Times has learnt.

Total, Europe’s third-largest oil company, was reported to be preparing a bid for Canada’s fourth-biggest independent oil producer.

It was also reported that Total's board was due to give the go-ahead to a deal at a meeting in Paris yesterday - and that a €130 million fee has already been paid to the oil giant's banking advisors.

However, The Times understands that no board meeting took place and that no such fee has been paid.

It was also reported that Total had secured financing for the deal — which would have boosted its reserves by six per cent — from five banks.

However, The Times understands that some elements on Total’s board have concluded that a deal would be too risky in the current climate, in view of the poor outlook for the global economy and the falling oil price. The fact that the contract for US light sweet crude closed yesterday at below $47-a-barrel for the first time since May 2005 is said to have been a key factor in deliberations.

The move will dash hopes of a fresh wave of consolidation in the industry. A bid from Total for Nexen could well have sparked counter-bids from Asia and from Italy’s ENI.

Total was reportedly set to pay C$38 a share for Nexen — around double the stock’s average trading price during the past month but still only roughly equivalent to the company’s net asset value per share.

Nexen is an oil, natural-gas and chemical producer with operations which span Canada, Yemen, the Gulf of Mexico. Indonesia, the North Sea and Brazil.

The company said on Tuesday, at the request of the Toronto Stock Exchange, that it was not aware of any reason for the activity in its shares — which had jumped by some 9.3 per cent on speculation that a bid was imminent. They fell in early trading by more than 9 per cent today.

Total spokesman, Paul Floren, said: “We never comment on market rumour.”

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