A planned $15.1bn (�9.8bn) merger that is set to create the third largest oil and gas company in the US has been approved by the regulator.

The Federal Trade Commission's five members voted unanimously in favour of the merger between Phillips Petroleum and Conoco.

However, the approval was granted on condition that the two energy giants would sell refineries in Utah and Colorado and some of their operations in Missouri, Illinois, New Mexico, Texas and Washington state.

In March, shareholders overwhelmingly backed the proposed merger.

The new group is expected to be named ConocoPhillips.

New giant

Company executives have described the deal as a merger of equals where both firms would be equally represented on the board of directors.

However, Phillips shareholders would own 56.6% of the new group while Conoco shareholders would own 43.4%.

The merged company, worth about $35bn and with a 2.2 million barrels a day capacity, would be the third biggest US oil producer after Exxon Mobil and Chevron Texaco.

The Conoco-Phillips combination is the latest in a wave of tie-ups to sweep through the global oil industry, triggered by a steep slump in oil prices during the late 1990s.

Phillips and Conoco had earlier said their merger would achieve annual cost savings of $750m and boost oil and gas output by 4% a year.