Oct. 25 (Bloomberg) -- The armed group that led attacks on Nigerian oil production for more than three years said it started an “indefinite cease fire” and talks to end the conflict.

The cease fire, which went into effect at midnight this morning, followed an Oct. 19 meeting between President Umaru Yar’Adua and Henry Okah, leader of the Movement for the Emancipation of the Niger Delta. Okah later conveyed the government’s readiness to talk with group’s negotiators, MEND spokesman Jomo Gbomo said today in an e-mailed statement.

The militant group, which surfaced in January 2006 and orchestrated attacks blamed for reducing Nigeria’s oil output by more than 20 percent a year, called off a three-month cease fire on Oct. 16. MEND said the government’s offer in August to give rebels amnesty didn’t address their demands for redistribution of oil wealth to residents of the Niger River delta, which accounts for almost all of Nigeria’s oil and gas.

“The end of violence opens a space to finding a permanent solution to the problems in the Niger Delta that were there well before the discovery of oil -- environmental degradation, poverty, transparency, governance,” said Antony Goldman, an independent consultant who met with some attendees of the meeting last week during a visit to Nigeria.

Olusegun Adeniyi, spokesman for President Yar’Adua, couldn’t immediately be reached for comment on his mobile phone.

Nigeria has reserves of about 36 billion barrels of oil and 187 trillion cubic feet of gas, more than any country in Africa. It is the fifth-biggest crude supplier to the U.S.

Western Partners

Five Western oil companies, Royal Dutch Shell Plc, Exxon Mobil Corp., Chevron Corp., Total SA and Eni SpA, run joint ventures with the government and currently pump about 1.7 million barrels a day.

Precious Okolobo, Nigeria spokesman for Shell, which shut most onshore operations due to the violence, couldn’t immediately be reached on his mobile phone for comment. Neither could Fred Ohwahwa, a spokesman for Total, and Yemi Fakayejo of Exxon Mobil. Scott Walker, Chevron’s spokesman in Houston, didn’t immediately respond to an e-mail seeking comment.

MEND said its latest cease fire was to “encourage the process of dialogue between the government and the team MEND has selected to negotiate its demands for a lasting peace,” Gbomo said in the e-mail.

Among negotiators nominated by MEND on Sept. 29 are the writer Wole Soyinka, winner of the 1986 Nobel literature prize, and two retired top military officers, Mike Akhigbe and Luke Aprezi. The environmentalist Sabella Abidde was also named.

Freed by the Government

Okah was freed by the Nigerian government in July after about two years in detention, where he faced a trial for treason and gun-running. He was arrested in Angola on suspicion of arms trafficking in September 2007 and deported to Nigeria.

While MEND rejected the amnesty offer in general, it encouraged militants who were already known to the government to accept it on an individual basis. The group said it would then replace those commanders with new fighters to resume attacks on the oil industry.

Nigeria is considering giving communities in the delta region 10 percent stakes in energy projects in an attempt to appease rebels pressing for more local control of oil wealth, Petroleum Minister Rilwanu Lukman said last week.

“What made the difference is the government’s offer of 10 percent of the oil fields to the community,” Goldman said.

Observers are still skeptical about a marked improvement in Nigeria’s investment climate, he said. That requires “solving the deeper problems of the people,” Goldman said.

To contact the reporters on this story: Dulue Mbachu in Lagos at dmbachu@bloomberg.net.

Last Updated: October 25, 2009 12:54 EDT