Iraq $8bn gas deal raises hopes for Nabucco

Europe took a surprise step towards reducing its dependence on Russian gas yesterday as two of its oil companies agreed to develop a gas field in Kurdistan, Iraq's semi-autonomous region.

OMV, of Austria, and Hungary's MOLagreed the deal, which will feed the planned Nabucco pipeline.

The 3,300km pipeline is the centrepiece of Europe's energy policy and attempts to reduce imports from Russia by providing the region with gas from central Asia.