UPDATE 2-Nigerian president offers amnesty to militants

* Amnesty offer for 60 days until Oct. 4

* Authorities hope 20,000 militants could take part

* Main militant group wants demilitarisation of Niger Delta

(Adds quotes, detail throughout)

By Felix Onuah

ABUJA, June 25 (Reuters) - Nigerian President Umaru Yar'Adua on Thursday offered amnesty to gunmen in the Niger Delta who lay down their weapons by Oct. 4, a bid to end unrest which has cost Africa's top oil exporter billions of dollars in lost revenue.

Pipeline bombings, attacks on oil and gas installations and the kidnapping of industry workers over the past three years have prevented Nigeria from pumping much above two thirds of its installed capacity of 3 million barrels per day of oil.

The supply disruption has repeatedly helped push world energy prices higher and cost Africa's most populous nation, which relies on crude oil for 90 percent of its foreign earnings, tens of millions of dollars a day.

"The offer of amnesty is predicated on the willingness and readiness of the militants to give up all illegal arms in their possession (and) completely renounce militancy in all its ramifications unconditionally," Yar'Adua said.

He said the offer would be open for a period of 60 days until Oct. 4. The authorities have said they hope as many as 20,000 militants could take part in the programme.

But the unrest in the delta, one of the world's largest wetlands, is not a straightforward political struggle and sceptics question whether amnesty alone will be enough to halt opportunistic attacks, crude oil theft and kidnapping.

The main militant group, the Movement for the Emancipation of the Niger Delta (MEND), sabotaged a Royal Dutch Shell (RDSa.L) oil pipeline on Thursday, the latest act in a month-old campaign which has shut in at least 133,000 bpd. [ID:nL466226]

The attack helped push oil to near $71 a barrel. [nSP191786]

MEND, which says it is fighting for a fairer distribution of the delta's oil wealth, said on Wednesday it would wait to see the details of the amnesty offer before responding, but has repeatedly sounded a note of caution and complained that it has not been involved in negotiations.

"While it is true that some of us will succumb to the temptation of money as Judas did, there are a majority that will remain steadfast to integrity, honour and a commitment to the people who cannot fight for themselves," it said on Wednesday.

CRIMINAL PROFIT

MEND's latest campaign of sabotage against the oil industry came in response to the biggest military offensive for at least a decade last month against armed gangs in Delta state, one of the three main oil-producing states in the region.

The offensive targeted Government Tompolo, leader of an armed faction who the security forces say has grown rich from "bunkering", the theft of industrial quantities of crude carried on barges to oil tankers off the coast and then absorbed into the international market.

Many security experts say that violence in the delta will not end until that revenue stream -- as well as the profits from ransoms paid for the release of hundreds of oil workers kidnapped since early 2006 -- can be switched off.

MEND and other activists have called for a demilitarisation of the region to be part of any amnesty deal, while the militant group has also said that its suspected leader, Henry Okah, on trial for gun-running and treason, should be released.

The amnesty proclamation stated the pardon would be extended to all those "presently being prosecuted for offences associated with militant activities" but did not mention Okah by name.

"We believe and are hopeful that he is among those covered," one of Okah's lawyers, Wilson Ajuwa, told Reuters by telephone.

"We believe that the president wants to resolve this matter, which is affecting the national and international economy, once and for all," he said.

One faction leader, Ateke Tom, has already indicated he would consider taking part in an amnesty. [ID:nLG850456] (Writing by Nick Tattersall and Randy Fabi; Editing by Louise Ireland)