"I think it is a little disingenuous to suggest that the huge budget for security in the Niger Delta is some way tied to importation of arms in one form or the other," said Nigerian Minister of State for Petroleum Odein Ajumogobia. "Everything we know about Mr. President's (Nigerian President Umaru Yar'Adua) approach to the Niger Delta detracts from that notion," he added.

In his budget proposal earlier this month, Yar'Adua said the government would allot one-third of the country's $20 billion budget for next year to security in the Niger Delta, a move that elicited praise from both supporters and opponents in the country's deeply divided National Assembly.

However, some still have questions about how serious the Yar'Adua administration is about curtailing the violence in the Niger Delta that is blamed for reducing the country's production capacity by an estimated 20 percent in recent years. Nigeria claims to be producing about 2 million barrels a day, down from 2.5 million bpd.

The recent shortfalls are blamed in part on the violence in the delta perpetuated by armed groups such as the Movement for the Emancipation of the Niger Delta and criminal gangs that attack oil installations and take both foreign and Nigerian workers hostage.

Leaders of MEND, which some contend is part of the delta's pervasive gang culture, have called for a more equitable distribution of the country's oil wealth. MEND, along with other lesser-known militant groups, have launched numerous attacks on both onshore and offshore oil installations in the delta and kidnapped more than 150 people in the last year.

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered some of the region's youth and incited them to take up arms.

One former leader of the delta's armed resistance, Mujahid Dokubo-Asari, contends MEND is not part of his own struggle, which until his release in July kept him in prison for 20 months.

"There is no MEND, or militants," Asari told United Press International in a recent interview. "They are merely armed gangs bent on violence and thievery, nothing more."

Be it politically minded militants or gunmen bent on thievery and profit, the violence in the delta and the drop in production could in fact play into Nigeria's economic favor, said Eurasia Group analyst Sebastian Spio-Garbrah.

Lower oil prices on the world market, he said, would force the Yar'Adua administration to make peace with the militants sooner rather than later in hopes of getting full production back online. Talks between the militant leaders and government officials have stalled in recent weeks resulting in an increase in attacks and kidnapping of oil workers.

"If oil prices begin to fall, then the government would be under pressure to reach a deal quickly with the militants," Spio-Garbrah told United Press International.

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