The workers are employed by Perth-based mining and engineering company Macmahon Holdings. The gunmen also shot dead one of the mining company's drivers during the attack in the Akpabuyo district near Calabar, Cross River State capital.
Australian Prime Minister Malcolm Turnbull said they are working with Nigerian authorities to free their citizens.
"We don't know at this stage the identity of the kidnappers and families in Australia are notified of course," said. "It is a very serious kidnapping, a very serious criminal assault, one person was killed and seven people have been kidnapped."In a conflicting report, the state Commissioner of Police, Mr Jimoh Ozi-Ibeh, said three expatriates and two Nigerians were kidnapped and that men of the police were on the trail of the gunmen, according to Daily Trust.
The New Zealander is a permanent resident of Australia. Foreign Minister Julie Bishop said the Government was working hard with Nigerian authorities to secure the release of the Australians.However, Ms Bishop said she would not provide further details given the sensitive nature of the case.
An eyewitness reportedly said the men were bundled onto a waiting boat. Nigerian police commissioner Jimoh Ozi-Obeh said the police were working with the Nigerian Navy to ensure all victims were released unharmed.
An escort vehicle carrying local police was unable to prevent the abduction. The commissioner said no ransom demand had been received. The convoy is believed to have been attacked by about 30 militants.
"It is more likely to be a criminal gang that have taken these people to elicit some sort of ransom from the company," ABC Africa correspondent Martin Cuddihy said.He said kidnapping was not uncommon in this region.
Macmahon, which was contracted to cement company LafargeHolcim in the state, said it was working with a crisis management organisation to secure the release of its workers.
A spokesman for Macmahon in Perth said he had been told not to comment for fear of jeopardising the safety of the kidnapped workers. LafargeHolcim spokeswoman Viola Graham-Douglas said the company was informed of the incident by Macmahon, which was "working with the security agencies to resolve the situation".
Communications director of Lafarge Africa, the parent company of UNICEM, Viola Graham-Douglas, said there was security incident.
Public affairs director Ayi Ita also said that there was shooting but that the expatriates were not their direct staff but those of Macmahon, an international contracting firm working for them.
"We cannot ascertain the number and names of those involved but they are staff of Macmahon Ltd," Ita said.A witness who pleaded not to be named, described the gunmen as Bakassi militants who had been terrorising the Calabar creeks. He said that on getting to the scene of the shooting, the driver wanted to save the workers by trying to escape, but that the militants gunned him down and took away the expatriates, Daily Trust reports.
Macmahon has an $US18 million ($24 million) per year contract with the United Cement Company of Nigeria Ltd (UniCem) for quarrying operations at UniCem's cement manufacturing plant at Mfamosing, near Calabar.
UniCem is a joint venture between Franco-Swiss conglomerate LafargeHolcim and Flour Mills of Nigeria, according to the Australian firm's website.