LAGOS, April 29 (Reuters) - Nigerian unions started talks with Exxon Mobil on Tuesday to end a six-day strike which has shut nearly all the U.S. major's 800,000 barrels a day (bpd) production and helped drive oil prices to record highs.

The government-mediated talks should have begun on Monday in the Nigerian capital Abuja but were held up as some union leaders missed their flight from the commercial capital Lagos, sources close to the discussions said.

The strike and attacks by Niger Delta rebels have slashed production in the world's eighth-largest oil exporter by more than half, driving prices to around $120 a barrel on Monday. Oil dropped back $3 a barrel on Tuesday as the dollar firmed and a strike ended at a British refinery, easing supply concerns.
"We hope to break the deadlock today," said union leader Lumumba Okugbawa, the deputy secretary-general of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).

Government-mediated negotiations to avert a strike last week failed. Exxon Mobil, the largest foreign oil producer in Nigeria, confirmed on Tuesday most of its production remained shut because of the strike over workers' collective contract.

"The talks are continuing this afternoon," Adeyemi Fakayejo, an Exxon public affairs adviser in Nigeria told Reuters. "The situation is still the same. It's still shut in."

Exxon on Monday said it had declared force majeure on its Nigerian shipments, meaning it could not fulfill contractural obligations to clients. Exxon produces in a joint venture with the Nigerian state and its equity share is around 427,000 bpd.

SURGE IN ATTACKS
The disruption came after a wave of attacks by the rebel Movement for the Emancipation of the Niger Delta, which says it wants President Umaru Yar'Adua's government to give a greater share of oil revenues to the impoverished and polluted Delta region, which produces most of Nigeria's oil.

Analysts say that the upsurge in attacks appears to be linked to an acrimonious re-run of the gubernatorial elections in oil-rich Bayelsa state and the trial of MEND factional leader Henry Okah, due to resume on May 2.

Royal Dutch Shell, the company hardest hit by the militants, said on Tuesday that attacks had forced it to shut in 164,000 bpd of production.
Shell was continuing repair work on Tuesday and attempting to clean up spilled oil from the Delta creeks, a spokesman said.

The cumulative oil production outage for Africa's most populous nation amounts to around 1.36 million bpd from its installed capacity of around 3 million bpd, temporarily making Angola sub-Saharan Africa's largest crude producer on around 1.9 million bpd.

Despite the disruption, high prices and tight international supply mean that oil companies and traders are unlikely to turn their backs on Nigeria, analysts said.

"The impact on the sector would be much worse if oil prices were lower. Right now, there are not many other places for people to turn," said Anthony Goldman, a London-based oil analyst. "There would have to be a sustained 50 percent drop in production for it to hurt government revenues."

"There is an issue about how the oil sector is managed in Nigeria though," Goldman said, pointing to lack of government investment, labour disputes and violence. Oil majors such as Shell and Exxon were reviewing their operations, he said, and could look to move more production offshore.

A recent Nigerian government report suggested the former British colony's production capacity could fall by one-third by 2015 unless there was more investment in joint-venture projects between the government and international oil companies.

Additional reporting by Peg Mackey, Santosh Menon and Ikuko Kao in London, Camillus Eboh in Abuja; editing by James Jukwey