Hostage oil workers released in Nigeria

By Tom Ashby

ABUJA (Reuters) - All seven foreign hostages seized by gunmen from an offshore Nigerian oil field were released on Monday after two days in captivity, a state government spokesman said.

The attack on Shell's EA field was the first big raid on an oil facility since President Umaru Yar'Adua took office in May and authorities are working hard to ensure it does not derail a nascent peace initiative in Africa's top oil producing region.

"All seven have been freed. They are in government house," said Ebimo Amungo, a spokesman for Bayelsa state government, where the kidnapping occurred.

A security sources earlier said that the Nigerian government was negotiating with the gunmen who seized the workers over the weekend.

Four Nigerians, a Briton, a Russian and a Croat were seized.

The attack had no immediate impact on oil output because the field was still halted after an earlier militant attack in February 2006. The field had been expected to restart by the middle of next year.

Shell said it evacuated all other staff from the EA field, which has a capacity of 115,000 barrels per day (bpd), and other companies also raised their security alert levels.

But industry officials said it was unlikely this attack would seriously affect Shell's plans to resume operations in the rest of the western Niger Delta, which accounts for another 360,000 bpd and was also closed in early 2006.