Russians set for £27bn oil merger

RUSSIAN oil firms Yukos and Chelsea football club owner Roman Abramovich's Sibneft are set to complete a planned merger, creating a $45bn (£27bn) giant today.

The merger, which will take place while Exxon Mobil chief executive Lee Raymond is in Moscow, had fuelled speculation that the US oil major is planning to take a stake in the group but this was strongly denied by Yukos today.

The combined company, in which Sibneft, valued at $15bn, is the junior partner, will have roughly the same output as French firm Total.

Russia is the world's second-biggest oil exporter behind Saudi Arabia and sits on the world's largest natural gas reserves.

Completion today would simplify negotiations with a potential Western investor.

Under the deal, Yukos core shareholders will pay Sibneft's core shareholders, who hold the other 92% of the firm, $3bn plus 26% and one share in the new group.

Exxon's Raymond is due to speak at a conference organised by the World Economic Forum and will be joined by Yukos chief executive Mikhail Khodorkovsky on a panel discussing the future of the Russian oil industry.

BP earlier this year invested $6bn plus in a venture with TNK, while rival Royal Dutch/Shell is investing $10bn in a new offshore project.