The merger would have created the world's fourth largest oil & gas company but has almost certainly been shelved due to the fall in value of Yukos since the arrest of its founder and former CEO, Mikhail Khodorkovsky.
Merger plans had already been put on hold in late November after Yukos refused to hand over greater management control of the combined entity.
Only a few weeks later, talks in London between the two sides appear to have produced an amicable divorce. Under the agreement, Yukos is likely to hand back 92% of shares in Sibneft in return for $3 billion in cash and 26% of Yukos' shares.
ExxonMobil is now seen as the leading contender for a significant stake in Yukos, but once again any deal would have to wait until the completion of court proceedings against Khodorkovsky and several other leading shareholders. Russian prosecutors froze Khodorkovsky 40% stake in the company to prevent any sale.
The US based ExxonMobil had previously been in talks to buy as much as 40% in the merged entity, but will now have to go back to the drawing board to examine its options and those of any likely competitors who may be considering the weakened state of Yukos stock.
However, any deal will have to wait until the merger is unpicked, something analysts in Moscow warned could take six months.
Sources close to Sibneft said its billionaire chief and Chelsea football club owner Roman Abramovich, will now consider shopping the company to big foreign oil companies.
