By Tume Ahemba

LAGOS (Reuters) - Staff of Nigeria's state oil company began an indefinite strike on Thursday over welfare and union leaders said they would target oil production if their demands are not addressed within days.

The strike, which is linked to the privatisation of the country's largest oil refinery last week, is expected to hit domestic fuel supplies at first.

It comes just five days before the inauguration of President-elect Umaru Yar'Adua on Tuesday. A separate two-day strike is planned by all Nigerian unions on Monday and Tuesday, but they had previously said this action would not affect oil output.

"The strike has started. We will wait for two or three days and see what happens. If we don't get the desired results, we will then extend it to the upstream sector where the impact will be immediate," said Peter Akpatason, president of the junior staff union NUPENG.

Peter Esele, head of the senior staff oil union PENGASSAN, said informal talks were already going on to try and resolve the issues at stake, while a formal meeting with the government has been slated for later on Thursday.

The Nigeria National Petroleum Corporation (NNPC) imports all of Nigeria's fuel because the country's four oil refineries are not working due to poor management and sabotage.

The unions are worried the government has not adequately provided for workers at the 210,000 barrels per day (bpd) Port Harcourt refinery, which was unexpectedly sold to a consortium of Nigerian and Chinese investors for $561 million last week.

The strike at the national oil company is separate from the May 28-29 action, called by the country's central union body, to protest against widespread vote rigging in last month's general elections.