(Adds released hostage's bullet wound, paragraph 12)

By Austin Ekeinde

PORT HARCOURT, Nigeria, May 17 (Reuters) - Royal Dutch Shell <RDSa.L> has started work to restore 170,000 barrels per day (bpd) of crude oil production in Nigeria after a protest at a major pipeline hub, a spokesman said on Thursday. The six-day protest in the Ogoni area of the Niger Delta had raised the tally of oil supply cut by violence to about 900,000 bpd, or one third of total capacity in Nigeria, the world's eighth largest exporter. It also pushed up world oil prices.

"We have regained access to the site," said a Shell spokesman.

Abductions of oil workers and attacks on the industry are frequent in the impoverished delta in southern Nigeria. Twelve foreigners are still being held hostage there after a Belarussian woman was released on Wednesday night.

U.S. major Chevron <CVX.N> said only about 7,000 bpd of its Escravos oil production was still closed on Thursday after a community invasion at its Abiteye facility on May 7. A spokesman said 70,000 bpd had been disrupted by that dispute, higher than its original estimate of 42,000 bpd.

A Shell source said the Anglo-Dutch company had already reopened one of the valves at the pipeline complex in Ogoni, and would test the system before fully restoring oil flows. Villagers from K-Dere community had staged the protest to demand a stake in the oil flowing through their land, but vacated the site on Wednesday after their elders promised to settle the issue in talks with Shell over the next few days.

Shell halted oil production in the Ogoni area 14 years ago after popular protests which were a precursor to today's violent insurgency across the vast wetlands region.

Rebels fighting for local control over oil wealth have stepped up attacks to press their demands, but the line between militancy and crime are blurred and frequent kidnappings are mostly motivated by money.

Kidnappers released the Belarussian woman who worked as an oil industry contractor on Wednesday. She was abducted on May 5 in Port Harcourt, the delta's main city, police said.

"She was released last night. She is in very fine condition," Felix Ogbaudu, police commissioner of Rivers state where Port Harcourt is located, said on Thursday.

But a security expert working for an oil company said the woman had a bullet wound on her knee and was having X-ray tests.

She is a senior manager with the Nigerian unit of British services company Compass Group <CPG.L> and also holds a Nigerian passport. (Additional reporting by Tom Ashby in Lagos and Estelle Shirbon in Abuja)

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