Villagers flee Nigerian oil delta, troops move in

WARRI, Nigeria, Jan 25 (Reuters) - Villagers fled Nigeria's lawless delta on Wednesday amid fears of military reprisals after a wave of attacks on foreign oil companies by ethnic Ijaw militia.

The army deployed more troops to key installations and oil companies tightened security around their offices a day after heavily armed men stormed the headquarters of Italian oil firm Agip, killing eight policemen and one civilian, and robbed a bank on the premises.

"There are soldiers everywhere and I don't want my three girls in the firing line," said Return Powei, from the remote village of Ogbotobo. "Our youths run into the forest when they hear the soldiers are coming. Everyone is moving out of Ogbotobo."

It was not clear if the attack on Agip, a unit of Italy's ENI , was the work of the Movement for the Emancipation of the Niger Delta, whose five-week campaign of sabotage and kidnapping has helped push world oil prices to four-month highs.

The movement pledged on Wednesday to make Royal Dutch Shell suffer unless it pays $1.5 billion to delta villages in compensation for decades of oil pollution.

The government has so far shown restraint in dealing with the militants. It has set up a committee to negotiate the release of four foreign oil workers kidnapped on Jan. 11 -- an American, Briton, Bulgarian and Honduran -- but it appears to be making little progress.

MILITARY REVENGE?

At the riverside in the delta city of Warri, villagers arrived in boats packed with household possessions, fearful of possible military attacks to avenge the killing of a dozen soldiers in a raid on a Shell oil platform on Jan. 15.

Shell has already withdrawn 500 staff and cut its output by 221,000 barrels a day. Hundreds of contractors have also fled the area as the military deploy extra troops to platforms across the vast region of mangrove swamps and tidal creeks.

Oil unions have threatened to pull out completely from the delta, which produces almost all Nigeria's 2.4 million barrels a day, if security deteriorates further.

"There is palpable fear in the air that another Odi is in the making," said ThisDay newspaper on Wednesday, referring to a 1999 raid when rights groups say troops killed hundreds in the delta village of Odi to avenge the killing of 12 policemen.

The militants said in an email to Reuters on Tuesday they had not started talks for the release of the four hostages who were taken from an offshore oilfield operated by Shell.

"The hostages are in good health ... and are going nowhere for as long as our demands are not met," said the group, seeking the release of two Ijaw leaders and $1.5 billion from Shell to compensate villages for decades of oil pollution.

"Shell will suffer more damages and losses than it can hope to pay as compensation," said the email. "Any foreigner who decides to remain in the Niger Delta will have himself only to blame." Nigerian secret agents have arrested three men they say are closely linked to the kidnappers, but the militants distanced themselves from the detainees, saying they were profiteers looking for a share of any ransom.

"We gather these people were arrested for being unable to provide the hostages after they were paid," the email said. "The hostages were not being held for money."

The captives will be freed only in return for the release of militia chief Mujahid Dukubo-Asari and former Bayelsa state governor Diepreye Alamieyeseigha, who was impeached for money laundering last month, the group said.