A two-day strike by Nigerian oil workers that had threatened oil exports has been called off. Gilbert da Costa in Abuja reports the strike was suspended after the government accepted a key workers demand late Friday.

Oil union officials say the government has agreed to a reasonable pay increase and severance package relating to the privatization of Nigeria's largest oil refinery in Port Harcourt.

Peter Esele, head of the powerful blue-collar union, Petroleum and Natural Gas Senior Staff Association, says the unions are still in talks with the government over other issues.

"There was this issue of collective bargain for 2007, which was approved by the NNPC [Nigerian National Petroleum Corporation] board for the staff of NNPC," he said. "Only for us to hear about a week ago that NNPC is going revert to public [service] pay as civil servants and we felt that was unacceptable."

"The only option was for us to down tools. Then yesterday evening, the president finally approved it and so for approving that one, we said we can now come out of it [strike] and continue talks on other issues," he added.

The unions had faulted the government's privatization of state-owned refineries without considering the welfare of workers. The government rejects the accusation.

The strike had threatened oil exports from Africa's leading exporter and worsened fuel shortages across the West African nation in the build up to next week's change of government.

Oil unions will join other unionists in a separate protest planned for Monday and Tuesday against widespread rigging in last month's elections.

Ruling party candidate Umaru Yar'Adua won the disputed presidential ballot and is due to succeed President Olusegun Obasanjo at an inauguration ceremony in Abuja on Tuesday.

Elsewhere, in the unruly oil-rich Niger Delta, militants who kidnapped 10 oil workers on Friday released three of them later in the day.

Three U.S. citizens and four Britons are still being held. More than 100 foreign workers have been abducted in the region this year.