Lagos: Nigeria was on Tuesday warned that violence could resume in the oil-producing south, exacerbating pressure on already stretched resources by Boko Haram in the north,and reduced crude revenues.
The International Crisis Group said the root causes of the insurgency in the strategic Niger Delta remained "largely unaddressed" and action was required to maintain the fragile peace.
"Violence in the Niger Delta may soon increase unless the Nigerian government acts quickly and decisively to address long-simmering grievances," it said in a new report.
Central to the uncertainty in the region is the government`s $500 million-a-year amnesty programme for former militants who attacked oil and gas industry infrastructure in the creeks in the 2000s.
At the peak of the trouble in 2009, some 1,000 people were killed every year, while the targeting of pipelines and facilities, including kidnappings of expatriate workers, saw crude production halved.
The programme, which provides monthly stipends and training to tens of thousands of former rebels, has been running for six years and ends in December but there have been calls for it to continue.
There were repeated warnings before presidential elections in March about a resumption of violence if Muhammadu Buhari defeated Goodluck Jonathan, who hails from oil-producing Bayelsa state.
With Buhari now in power, the ICG recommended that he "needs to act firmly but carefully to wind down the amnesty programme gradually" alongside new development and environmental schemes.
Building a "durable peace" should be a government priority, the group said.
Chronic poverty and "catastrophic" oil pollution in the Delta region both fuelled the insurgency and problems remain with poor infrastructure and equitable oil revenue-sharing.
The ICG assessed that government agencies set up to develop the south had "floundered" while efforts to manage oil spills had been "largely ineffective", it added.
"The conditions that sparked the insurgency could easily trigger a new phase of violent conflict," said the report, "Curbing Violence in Nigeria (III): Revisiting the Niger Delta".
Buhari, who has made tackling the rot in the oil sector a priority, has withdrawn pipeline protection contracts from former militants and ethnic Yoruba militia.
The threat to vested interests, local political tensions and the perception of a plot by northern Muslim Buhari to rob the largely Christian south of oil revenue could trigger unrest.
"With many guns in unauthorised hands, politically motivated assassinations and kidnappings for ransom, already common, could increase," the ICG said.
It added: "A resurgence of violence and increased oil-related crime in the Delta could seriously undermine national security and economic stability, which is already weighed down by the Boko Haram insurgency and dwindling oil revenues."