By Estelle Shirbon

ABUJA, Oct 5 (Reuters) Seven expatriate oil workers abducted in Nigeria are in good health and their kidnappers have demanded a ransom, a diplomat said today.

Fighting between militants and troops in a different part of the Niger Delta subsided overnight but Royal Dutch Shell suspended supply convoys in some creeks after militants said they killed 17 soldiers in gunbattles yesteday.

''They've been in contact so we know they're OK,'' said a diplomat from one of the countries whose nationals were kidnapped on Tuesday night from a residential compound for contractors to ExxonMobil in Akwa Ibom state.

''There has been a demand for a ransom. We're at that stage where the state government is moving towards negotiations. They will take the lead as in all previous cases,'' he added.

The kidnapped men are four Britons, one Romanian, one Malaysian and one Indonesian. Kidnappings for ransom are common in the Niger Delta and hostages are usually released unharmed after money changes hands.

Violence has flared up this week in the delta, which accounts for all crude output from the world's eighth-biggest exporter. A sixth of production capacity is already shut down following a wave of militant attacks in February.

Late yesterday, militants from the Movement for the Emancipation of the Niger Delta (MEND) said they killed 17 soldiers in two separate gunbattles in Rivers state.

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