Nigeria has lost a quarter of its daily oil production due to attacks on pipelines and terminals and the kidnapping of key staff. Many Nigerians fear an escalation of violence in the oil-rich territory as Africa's most populous country heads for elections in 2011.
The main militant group in the region, the Movement for the Emancipation of the Niger Delta said it may resume attacks on security forces if its bases are attacked or the military engages in "punitive invasion" of delta communities involved in recent clashes with the military.
At least 15 people have been killed in clashes between gunmen and security forces in the past three days. Analysts said the security outlook remains extremely volatile and could get worse before elections in 2011.
A presidential committee investigating the Niger Delta said last week that Nigeria lost about $24 billion to oil theft and sabotage in the first nine months of 2008. The group said about 1,000 people were killed and 300 taken captive in the same period.
Chairman of the presidential panel, Ledum Mitee, said a disarmament program should begin in the Niger Delta now to stem the likelihood of uncontrolled violence.
"We are getting close to elections and the more we can get out the guns from people and deal with real issues, instead of just patronage, the better for us," he said.
President Umaru Yar'Adua made the Niger Delta, with its oil and gas riches, one of his top priorities when he came to office nearly two years ago. But the region remains as violent and poverty-stricken as when he arrived.
The government is working out a plan under which militants could be granted amnesty if they disarm.
Defense Minister Shettima Mustapha said the government is committed to resolving the crisis.
"Ultimately, it is our intention to get to the bottom of these things so that the problem of the Niger Delta is solved once and for all," Mustapha said.
The Niger Delta conflict has simmered for more than a decade. Government crackdowns or offers of peace talks have had little effect on the rebellion.