(adds restart of talks, background paragraphs 4,14-16)
By Daniel Flynn
LAGOS, April 30 (Reuters) - Striking oil workers who have shut down Exxon Mobil's <XOM.N> production in Nigeria have agreed in principle to return to work while negotiations with the company continue, mediators said on Wednesday.
A spokesman for the state-run Nigerian National Petroleum Corp. (NNPC), which is brokering the talks, said the leaders of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had committed to suspending its seven-day-old strike while discussions went ahead.
"They have agreed that they will resume work as soon as negotiations resume," NNPC spokesman Levi Ajuonuma said. "Hopefully by the end of the day they will make the announcement that they have fully called off the strike."
Talks restarted in the Nigeria capital Abuja on Wednesday but an Exxon Mobil executive, who asked not to be identified, said workers had not yet returned and, with Thursday a national holiday, work could not resume before Friday at the earliest.
The dispute has shut down virtually all Exxon's 800,000 barrels per day of production, forcing the U.S. oil major on Monday to declare force majeure on Nigerian shipments, meaning it could not fulfill contractural obligations to clients.
The strike and attacks by Niger Delta rebels have slashed production in the world's eighth-largest oil exporter by more than half, driving prices to a record high around $120 a barrel on Monday. Oil has since fallen back to $115 a barrel.
The first day of government-mediated negotiations broke up on Tuesday without agreement after union representatives called for a 25 percent salary increase and improvements to pensions and working conditions, according to sources close to the talks.
"There is just a difference over the percentage on offer. (Exxon) Mobil is offering something less than they want," said Ajuonuma.
MEMBERS MUST DECIDE
PENGASSAN President Peter Esele had said late on Tuesday that the strike action would continue, but union leaders told Reuters on Wednesday they would seek the approval of their membership to return to work during the negotiations.
"We have to put this to our members," said PENGASSAN Deputy Secretary-General Lumumba Okugbawa, adding that the consultation was expected to be done on Wednesday morning.
Exxon produces in a joint venture with the Nigerian state and its equity share is around 427,000 bpd. The company had refused further talks unless union leaders suspended the strike action, mediators say, while PENGASSAN officials wanted assurances the company was negotiating in good faith.
"The mediators have asked both sides to return to the negotiating table. Hopefully we will be able to reach a solution," said Exxon Mobil spokeswoman Gloria Essien-Danner.
The disruption came after a wave of attacks by the rebel Movement for the Emancipation of the Niger Delta, which says it wants President Umaru Yar'Adua's government to give a greater share of oil revenues to the impoverished and polluted Delta region, which produces most of Nigeria's petroleum.
Royal Dutch Shell, the company hardest hit by the militants, said on Tuesday that attacks had forced it to shut in 164,000 bpd of production.
The cumulative oil production outage for Africa's most populous nation amounts to around 1.36 million bpd from its installed capacity of around 3 million bpd, temporarily making Angola sub-Saharan Africa's largest crude producer on around 1.9 million bpd.
Analysts say that the upsurge in militant attacks appears to be linked to an acrimonious re-run of the gubernatorial elections in oil-rich Bayelsa state and the trial of MEND factional leader Henry Okah, due to resume on May 2. To read a FACTBOX on Nigerian oil production outages, click on [ID:nL28667139] (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Additional reporting by Camillus Eboh in Abuja; editing by James Jukwey)
