Last week government and private officials expressed hope to receive some fresh ideas on how to end three years of attacks by armed militant groups and bandits on foreign petroleum installations and Nigerian soldiers.

However, the effort proved fruitless as violence increased over the last few days with a firefight between militants from the Movement for the Emancipation of the Niger Delta and Nigerian forces.

At least seven MEND gunmen were killed in the melee last week, according to local media reports.

More recently, a Shell security official was killed Monday when gunmen attacked an oil facility, wounding four others, according to local reports.

MEND warned that the recent violence was just a preview of its intended escalation of the conflict raging in the delta.

"Oil companies are warned to move out their workers within the next 24 hours because a hurricane is about to sweep through oil installations in the entire Niger Delta region," read a statement by the self-styled MEND spokesman known as Jomo Gbomo.

"This may be the beginning of a full-scale oil war."

Even the recently announced creation of the Niger Delta Ministry to tackle the ongoing concerns of widespread poverty in the region did little to placate MEND and other militant groups in the region angered with the country's handling of oil wealth.

Since the 1970s, Nigeria, until recently 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, forming militant groups such as MEND.

The increased violence has caused Nigerian oil output to decline by 650,000 barrels per day, the West African country's vice president noted last month.

The recent spike in clashes between militants and Nigerian soldiers and private security has cost the country about 115,000 barrels per day in output, said Nigerian energy officials.

All losses incurred by continuing attacks by armed militant groups on oil and gas installations in the Niger Delta are costing the country almost $68 million a day in lost revenue, said Vice President Goodluck Jonathan.

Jonathan also noted that Nigeria's oil output, once topping 2.5 million barrels a day, has dipped below 1.8 million bpd, dropping the country to second place among African oil producers behind upstart petroleum producer Angola.

Though a Niger Delta native, Jonathan has been an outspoken critic of Nigeria's lopsided dependence on the region for the vast majority of its national revenue, calling it an economic curse in recent months.

"The overdependence on oil has put an unpleasant bracket in our national economic freedom," Jonathan said before lawmakers earlier this year in an effort to encourage them to diversify Nigeria's export portfolio.

He attributed the persistent poverty in Nigeria to a culture of corruption within the petroleum sector, giving rise to militant groups such as MEND.

"The interpretation given by some observers is that present agitations were only but a reaction to the many decades of neglect," the vice president added.

About 95 percent of Nigeria's revenue is generated by oil and gas, resulting in billions of dollars in state funds every year, though much of the country remains impoverished and underdeveloped.

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