The French energy group, Total, has said it is to merge with the Belgian company, Petrofina, to create the sixth largest oil company in the world.

The merger will need the approval of shareholders and trade authorities in Europe and the United States.

News of the deal comes after the American companies, Exxon and Mobil, said they were also wanted to merge to create the world's largest oil company.

Analysts say consolidation has become attractive in the oil industry with companies seeking to cut costs as a glut of oil causes prices to hit their lowest levels in twelve years.