Lagos: Italian oil company Eni said 27 people including 11 soldiers were being held hostage at one of its oilfield stations in Nigeria on Monday after the facility was overrun by militants a day earlier.

No one was harmed or killed in the invasion of the Ogbainbiri flow station in Bayelsa state, which normally produces about 40,000 barrels per day of oil. "At the time of the attack there were 24 local workers and 51 soldiers within the premises. 40 soldiers and 8 workers have managed to leave the flow station," the company said in a statement, adding it was working with local authorities to resolve the crisis.

The invasion was apparently in response to the killing of eight people by troops guarding Ogbainbiri last week, security sources said. The military said the dead were militants who tried to attack the oilfield, but a militant group said they were mostly unarmed civilians.

The clashes are a setback to a nascent peace initiative by the newly inaugurated President Umaru Yar Adua and militants who have crippled Africa's largest oil industry over the past 18 months.

A prominent militant leader, Mujahid Dokubo-Asari, was released on bail last week, meeting a key demand of armed groups who have led a campaign of kidnapping of foreign workers and bombings of oil facilities.

About 600,000 barrels a day of Nigerian oil output are still off line because of the attacks, and thousands of foreign workers have fled the region. But militants have released about 30 hostages since Yar Adua's inauguration on May 29, and various groups have called a truce to allow dialogue to start. There are at least a dozen other hostages still being held by various other groups in the delta.

Militants complain of neglect and poverty in the delta, which produces all of Nigeria's oil but where most people live without access to electricity, clean water, roads or decent schools. But the line between militancy and crime is blurred and most kidnapping is by groups seeking ransoms. Some militant groups want outright independence for the remote region of swamps and mangrove-lined creeks, while others seek more regional control over the oil wealth and compensation for decades of oil spills.