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

OMV, of Austria, and Hungary's MOL agreed 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.