The seven men, working for Canadian pipeline company ShawCor Ltd, were snatched in the oil-rich southern delta region by armed men demanding ransoms.

"Today the Australian has been released," a foreign ministry spokeswoman told the Australian Broadcasting Corp radio, adding that he was the only one freed so far.

"He was released and walked back to where his employment camp was down the river. He arrived tired but in very good spirits and uninjured," she said.

Diplomatic sources in Nigeria said they were hopeful that others, including a Briton, Colombians and Russians, would be released soon.

Ransom demand

The Australian spokeswoman said she did not know whether a ransom had been paid for the Australian's release, but sources in Nigeria familiar with the negotiations said a ransom of an estimated $72,000 had been demanded by the kidnappers.

There have been a string of kidnappings of oil workers recently in the Warri area, where impoverished fishing communities have increasingly turned to violence to settle their grievances.

Local communities accuse oil companies and governments of giving them little except pollution for the riches pumped out of their land.

Nigerian and foreign governments publicly deplore the payment of ransoms, but it has become standard practice for international companies operating in the volatile Niger delta, where most of the OPEC country's oil is produced.

The region has seen an escalation of violence since March, when Ijaw youths launched an armed rebellion against ethnic rivals, security forces and oil multinationals.

Local communities accuse oil companies and governments of giving them little except pollution for the riches pumped out of their land.

Nigeria - the world's seventh largest oil exporter - sent 3000 police, soldiers and marines into the area around Warri in September after ethnic clashes left almost 100 dead.