(Adds quotes and colour) By Austin Ekeinde PORT HARCOURT, Nigeria, June 16 (Reuters) - Militants released 10 Indian hostages in Nigeria's oil-producing delta as thousands welcomed the return of a rebel leader to the region's capital on Saturday. The release of the Indians after more than two weeks in captivity is the latest sign of easing tensions in the Niger Delta, a vast wetlands region where militant attacks and kidnappings have crippled Africa's largest oil industry. The Indians, including at least three senior executives of Indonesian petrochemical company Indorama and some family members, were abducted by gunmen from their residence on June 1. "The Indorama hostages were released last night by the militants. Right now they are with their employer. They are 10 in all and in high spirits," said army spokesman Sagir Musa. A security official with an oil company in the region said the captors freed them in response to Thursday's release on bail of former militia leader Mujahid Dokubo-Asari, who arrived back in Port Harcourt on Saturday. Asari, who led the rebel Niger Delta People's Volunteer Force until his imprisonment on treason charges in 2005, was greeted by thousands of cheering supporters at the air force base in Port Harcourt, the delta's largest city. Wearing charms and fetish white bandanas, young men shot into the air and motorcycle riders blocked several streets. "He is our man so I'm very happy to see him back," said Michael Zor'ol, a motorcycle taxi rider. Asari told the crowd he was opposed to hostage-taking. "We are fighting for justice and equity so we cannot do injustice to other people," he said. In an interview with Reuters on Friday, Asari said he wanted to unite splintered rebel groups around his radical agenda for independence for Nigeria's oil heartland. He also said he was not opposed to action that disrupted oil production. Militant attacks have shut about 600,000 barrels per day, or one quarter of Nigeria's total capacity. POVERTY Activists in the delta hope Asari's release will open the way for talks between the newly inaugurated government of President Umaru Yar'Adua and delta militants over long-standing grievances of poverty and neglect. Most delta residents live in poverty, without access to electricity, clean water and decent schools, despite the billions of dollars of oil extracted from their ancestral land every year. Tensions have eased since Yar'Adua's inauguration on May 29, and militant groups have released about 30 hostages. More than 200 foreign workers have been kidnapped in the past 18 months, but almost all have been released after the payment of ransom. Asari told Reuters the lawlessness could take up to a year to bring under control if talks went well with the government. Two Indians working for a rubber company were abducted in Delta state on Friday. A spokesman for the military said troops had arrested three members of the gang involved and hoped to track down the hostages soon. The military had previously reported the victims also included two Lebanese, but army spokesman Omale Ochagwuba said this later turned out to be incorrect. (Additional reporting by Tom Ashby in Lagos)
