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By Estelle Shirbon

ABUJA, March 5 (Reuters) - A German man was released unharmed late on Tuesday in the Niger Delta in Nigeria, about 12 hours after he was seized by unknown gunmen who killed a driver and two soldiers, a source at his company said on Wednesday.

The source at Julius Berger <GBFG.DE>, a German-Nigerian construction group, said no ransom was paid for the German hostage and his release was due to fast work by the Nigerian security services.

"He was released at 11 p.m. (2200 GMT). They held him for a little under 12 hours. No ransom was paid," said the source, who did not wish to be named.

Violence and oil supply disruptions in the Niger Delta, home to Africa's biggest oil industry which produces 2.1 million barrels per day, have been one of the causes of record high oil prices on world markets.

The German was the first foreigner abducted since October in the delta, where over 200 expatriates have been seized by militants and ransom seekers since early 2006. Almost all of them were released unharmed.

It was not yet clear whether Tuesday's abduction was an isolated incident or whether it marked a return to greater insecurity for foreigners in the delta.

The German was seized along a road leading out of Port Harcourt, the delta's main city, near Emuoha where Julius Berger is upgrading the road. The attackers shot dead a driver and two soldiers who were escorting the German, and a third soldier was injured, according to security sources.

The problems in the Niger Delta are rooted in poverty and an absence of basic services and infrastructure for local communities, who live uneasily alongside an industry that produces billions of petrodollars every year.

Armed groups campaigning for greater local control over oil revenues and compensation for air, land and water pollution have blown up oil production facilities and kidnapped foreign oil workers to press their demands.

A series of raids in early 2006 by the rebel Movement for the Emancipation of the Niger Delta forced the closure of a fifth of Nigeria's production capacity.

However, the lines between militancy and crime are blurred in the lawless delta. Kidnappings of foreigners and of Nigerians from wealthy families has become a lucrative business and hundreds have been snatched for no other motive than money.

Nigerians did not benefit from the lull since October. Kidnappers have continued to frequently snatch people, including small children, from families seen as rich enough to pay ransom. (Reporting by Estelle Shirbon; Editing by Charles Dick)

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