Talks start to free foreign oil hostages in Nigeria

LAGOS, June 3 (Reuters) Negotiators in Nigeria's oil-producing southern delta today were seeking the release on Saturday of eight foreign workers kidnapped from an oil rig by gunmen demanding jobs and development for their community.

Six Britons, one Canadian and one American were seized from an offshore rig yesterday, raising new security fears after a campaign of militant attacks earlier this year that have cut a quarter of crude oil output from Africa's top producer.

The sophisticated night-time raid, carried out 40 miles off the coast of the Niger Delta by 20 to 30 gunmen in four speedboats, showed that even deep offshore facilities are no longer safe from well-armed local groups.

''There are negotiations going on. I can't say who, but I believe it's the right people from both sides. We are getting help from a couple of people who seem to be accepted by both sides,'' said a source from one of the oil companies involved.

''Good progress is being made ... We're very optimistic ...

We don't think this is likely to be prolonged,'' said the source, who did not want to be named to avoid making himself or his company a target.

He said the kidnappers had not listed any specific demands but wanted to force the oil companies to negotiate with on a range of issues including employment for local people, environmental impact and development projects.

''They want to bring everyone to the table to hear their plight,'' said the source.

Abductions are a common tactic by disgruntled groups in the Niger Delta, a vast, impoverished wetland that produces the bulk of Nigeria's 2.4 million barrels per day (bpd) of crude oil.

Local people have seen few benefits from the industry.

Poverty, graft, lawlessness and struggles over a lucrative trade in stolen crude fuel militancy and unrest in the delta.

RANSOMS Security analysts say the real motivation of most kidnappers is to get hefty ransoms from oil companies, which usually pay up. The companies deny this, but analysts say the practice exists and encourages hostage takings.

The company source said the eight hostages were being well treated and their captors had allowed a delivery of food, clothes and toiletries for the men.

''Everyone is in good health. The captives are being allowed to use the satellite phone. They made three calls to our Port Harcourt base yesterday and one of them was allowed to call his wife at home,'' said the source.

The men are believed to be held in a swamp in the Ekeremor local government area of Bayelsa state, the coastal area nearest to the Bulford Dolphin rig where the raid took place.

The attack had no impact on oil output as the facility is an exploration rig that will not produce crude for years.

The abductions follow a campaign of attacks by the militant Movement for the Emancipation of the Niger Delta (MEND), which has forced the closure of more than 500,000 bpd of Nigerian oil production and contributed to several spikes in world prices.

OPEC member Nigeria is the world's eighth-biggest exporter of oil and the fifth largest supplier to the United States.

MEND demands greater local control of oil revenues but is accused by authorities of being a criminal gang bent on extorting money. It said today it had nothing to do with the Bulford Dolphin raid.

The rig is owned by the Norwegian oilfield services group Fred Olsen Energy ASA and leased to the Nigerian firm Peak Petroleum, which operates it in partnership with Equator Exploration .

Reuters SHB VV1547