New Russian oil giant

Russia's second largest oil company, Yukos, and one of its smaller rivals, Sibneft, have announced they're merging -- creating one of the largest oil producers in the world.

The chairman of the financial and industrial group which controls Yukos , Mikhail Khodorkovsky, said the merger was part of a trend in Russia towards forming a smaller number of stronger, more competitive companies.

A BBC correspondent in Moscow says the merger is likely to generate intense interest from American and French companies, which have been looking into joint production deals with both of the merged companies and are anxious to tap into the huge reserves of oil fields in Siberia.

From the newsroom of the BBC World Service