(Updates oil price, paragraph 5)

By Austin Ekeinde

K-DERE, Nigeria, May 16 (Reuters) - Protesters ended a six-day occupation of an oil pipeline hub in Nigeria on Wednesday, saying Royal Dutch Shell was free to resume pumping 170,000 barrels per day (bpd) that was shut by the protest.

Oil prices tumbled on news of the end to the protest in the Ogoni area of Rivers State, which raised to about 900,000 bpd the tally of Nigerian oil supply hit by violence, equivalent to about one third of the country's total capacity.

"We have left the place out of respect for our elders and chiefs," protest leader Teddy Penedibebari told Reuters.

"The manifold is still locked at the moment, but Shell can come and reopen it," he added.

London Brent crude oil futures dropped by almost a dollar from an early high of $68.54, and June Brent was 22 cents lower at $67.89 at 1535 GMT.

A Shell spokesman said he had no information.

The protesters had invaded the complex on May 10 to demand a stake in the oil flowing through Ogoni, an area of the Niger Delta where Shell suspended oil production 14 years ago because of popular protests.

They said their elders had promised to resolve the dispute in talks with Shell within a week.

Unrest in the world's eighth largest oil exporting nation has surged since last month's general elections, which were so marred by rigging and violence that international observers said they were not credible.

Earlier on Wednesday, unidentified gunmen blew up the country home of vice president-elect Goodluck Jonathan in nearby Bayelsa state and sacked a police station, killing two officers, police said.

Police spokesman Haz Iwendi said the house in Otueke was partially burned but Jonathan's family were unharmed.

Jonathan, who is still the governor of Bayelsa state, is due to be inaugurated as vice president on May 29.

"MAYHEM"

It was unclear whether the arson attack was related to a call by a prominent militant group for a month of "mayhem" to press their demands for more autonomy in the southern oil producing Niger Delta.

On the eve of the April 21 election, Jonathan escaped unharmed when gunmen attacked the Bayelsa state government headquarters and set off explosives.

Jonathan was chosen as running mate by Umaru Yar'Adua, the president-elect, in the hope of easing tensions in the delta, but militant groups have accused him of betraying their cause.

Delta militants see the transition of power as an opportunity to extract concessions from the new federal government in exchange for a reduction in violence.

There are currently 13 foreign workers held hostage by several different armed groups in the delta.

Attacks this month have shut about 335,000 bpd, coming on top of about 600,000 bpd shut by militant raids in February 2006, which forced Shell to evacuate the western delta.

The prospect of power changing hands is just one of several causes of violence in the remote region of swamps and mangrove-lined creeks which is home to all of Nigeria's oil.

Unrest is rooted in resentment against an industry that has extracted billions of dollars in five decades but left the poor without electricity, water, schools or doctors.

The situation is compounded by government corruption, abuses by security forces and gang fighting linked to the trade in stolen crude oil.

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