January 26, 2006

Nigeria hostage talks making progress: Obasanjo

DAVOS, Switzerland (Reuters) - Nigeria's President Olusegun
Obasanjo said on Thursday that contacts with the kidnappers of
four foreign oil workers were making progress, and played down
the impact of the crisis on oil investment.

"Oh, we are very much in contact with them," Obasanjo said
of the militant group which seized the oil workers on January

"Immediately after it happened, we set up a committee ...
It's not only in contact, it's making progress."

The four oil workers were kidnapped from a Royal Dutch

oilfield by militants demanding the release of ethnic Ijaw
leaders and compensation to delta villages for oil pollution.

The crisis has forced Shell to withdraw 500 staff and cut
its output by 221,000 barrels a day, or one tenth of Nigerian
exports, putting upward pressure on world oil prices.

Asked if he was concerned about the impact on oil
investment, Obasanjo told Reuters at the World Economic Forum
in Switzerland: "Not really."

He declined to comment when asked if he believed the crisis
would be ended by negotiation or by force.

He said the kidnapping was part of a broader separate
problem of "criminality" in the region.

"There are two situations, if you like. There's the
immediate situation of the hostages, and we have to get the
hostages released, and then there's the situation of
criminality in the Niger Delta, that's a different issue
altogether," Obasanjo told Reuters Television at Davos.

The army this week deployed more troops to key oil
installations after armed men stormed the headquarters of
Italian oil firm Agip in Nigeria, killing eight policemen and a
civilian. Agip is a unit of Italy's ENI.