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The sabotage on Saturday came hours after the Movement for the Emancipation of the Niger Delta (MEND) ended a three-month old ceasefire and threatened to unleash "an all-out assault" on Africa's biggest oil and gas industry.

While MEND said the attack was the work of a militant group it backed, one security source, who declined to be identified, said the sabotage on Shell's pipeline, in Bayelsa state in the Niger Delta, might have been caarried out by oil thieves trying to tap into it.

"MEND was not directly responsible," the group said in an email to Reuters.

"It was certainly a response to our order to resume hostilities by one of the various freelance groups we endorse."

Shell said on Sunday the sabotage had caused some oil to spill into the delta's creeks and that it was in the process of recovering spilled crude.

It was not clear how much oil production had been shut down.

The joint military taskforce responsible for policing the Niger Delta said it was investigating the pipeline sabotage but declined to say how it would respond to MEND's threat.

"We are monitoring the situation and will issue a statement when appropriate," Lieutenant-Colonel Timothy Antigha said.

Attacks by militants and disgruntled community members on Nigeria's oil sector in the past few years have prevented the OPEC member from producing much above two-thirds of its capacity, costing it about $1 billion a month in lost revenues.

Nigeria's light crude is popular with U.S. and European refiners as it is easily processed into fuel products and previous oil attacks have helped lift global oil prices.

But several key MEND field commanders accepted a presidential offer of amnesty last year and it is unclear what operational capacity the group has left or who is in charge.

POLITICAL UNCERTAINTY

MEND's threat to resume hostilities could not have come at a worse time for Nigeria, further damaging the investment climate.

President Umaru Yar'Adua has been in hospital in Saudi Arabia for more than two months but has failed to formally transfer powers to Vice President Goodluck Jonathan, bringing the country to the brink of a constitutional crisis.

The Senate, former heads of state and ex-ministers, the Nigerian Bar Association and the opposition have all called on Yar'Adua to formally notify parliament of his absence and allow Jonathan to take over until his health is restored.

Shell said on Friday it was selling its stake in three Nigerian onshore oil licences.

It said it remained committed to Nigeria and the move was part of its "active management" of global interests, but analysts believe the decision will have been coloured by the country's political environment and continued insecurity.

The Anglo-Dutch company's onshore production in the Niger Delta represents some of its lowest-margin barrels and its chief executive Peter Voser said recently the firm no longer relied on Nigeria for its growth.

"We expect the company to further cut its exposure to the country but to keep its offshore projects, which are harder to attack," said one equities dealer.

Yar'Adua was the driving force behind the amnesty programme last year which saw thousands of gunmen hand over weapons. Community leaders had warned his prolonged absence was stalling the programme and forcing former rebels to re-think their participation.

MEND's announcement piles further pressure on Nigeria's leaders to resolve the impasse over who is in charge.

The Trans Ramos Pipeline has been vulnerable to militant attacks in the past.

MEND in June sabotaged the same pipeline which connects to the Tunu, Opukusu and Ugbotubu flow stations and feeds crude oil to the Shell-operated Forcados export terminal.