The owner of a hijacked Malaysian oil tanker has agreed to pay a RM380,000-ransom for the release of three Indonesian crew kidnapped by armed pirates in the Malacca Strait, a report said today.

The New Straits Times said the ship owner was negotiating with the pirates, believed to be Indonesians, on conditions for the release of the captain and two crew of the MT Penrider.

"The owner has assured the hijackers the ransom will be paid as long as the crew members are released. The hijackers have also given an assurance that the men are safe," the paper quoted an unnamed source as saying.