Contact lost with Nigerian hostage takers

Poverty has caused tensions in the Delta

The oil company Royal Dutch/Shell says it has lost contact with the gunmen who are holding 165 employees hostage on oil rigs in Nigeria's Delta region.

The company had reached an agreement on Wednesday with the hostage takers' representatives, that the captives would soon be freed.

Delta oil hostages

March 2000 - 32 held for 5 days

July 99 - 64 held for two days

June 99 - 2 helicopter pilots held for 3 weeks

The representatives were supposed to return to the oil rigs to order the release of the hostages.

"We have lost communication with the rig because of heavy rain and we cannot tell if the representatives have reached there," an oil company spokesman in the region told Reuters news agency.

He added that helicopters had dropped supplies near the oil rigs but had not tried to land on the rigs for security reasons.

'Compensation' sought

The hostages have been held since the armed men, believed to be local residents, stormed the oil rigs on Monday.

Oil workers are frequently targeted

The hostages are believed to comprise 144 Nigerians, seven US citizens, five Britons and some Australians and Lebanese.

The armed men were demanding employment with the company and unspecified "compensation" for taking oil from the area, according to the company.

The Royal Dutch/Shell spokesman said the group's demands would be discussed at a meeting on 15 August.

Militants in the Niger Delta region have frequently taken foreign workers hostage in order to draw attention to their cause, demanding money or jobs.

The rigs are located in one of the most inaccessible areas of the Niger Delta, a region of sea water creeks, swamps and mangrove islands.

Poor region

Oil production in the Delta generates much of Nigeria's revenue, but historically the region has not benefited from the wealth.

Royal Dutch/Shell is the largest multinational oil company operating in Nigeria, and its production accounts for nearly half of the country's total daily output of just over two million barrels a day.

President Olusegun Obasanjo promised to develop the oil-producing areas when he came to power last year and has set up a new body, the Niger Delta Development Commission (NDDC), to do this.

But so far little has changed for the residents of the area with unemployment still high and infrastructure poor.