Lagos - Nigeria is ready to deploy troops to the Niger delta in a showdown with militants who have wreaked havoc on the nation's key oil infrastructure since the start of the year, the army says.
But local leaders have warned against the use of force on the grounds it would hurt civilians.
Special forces are due this weekend to begin training for a possible operation against the Niger Delta Avengers (NDA), which if carried out would be the first in the oil-rich region since 2009.
"The aim of the exercise is to practise our special forces and other units of the Nigerian Army in amphibious and internal security operations in riverine environments," read an army statement.
The army has warned it could launch operations in the creeks and swamps of the Delta region if the NDA continued to refuse to enter into dialogue with the government.
In the latest of a string of attacks against oil installations, the NDA says it was behind the Sunday sabotage of a gas pipeline owned by the state-run oil company in the southern Akwa Ibom state.
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Since February, the group has also targeted infrastructure owned by oil majors Shell, Chevron, Exxon and Eni, whom it blames for widespread poverty and underdevelopment.
NDA's actions have significantly reduced oil production at a time Nigeria is struggling with low global crude prices which have hammered government revenues, weakening the naira and pushing up inflation to near 11-year highs.
Army spokesman Sani Usman said the special forces would also "check criminal activities like kidnapping, militancy and piracy... in support of the civil authority."
Usman urged Nigerians not to panic if they noticed unusual movement of large number of troops, heavy weapons and military equipment in the area.
Nigeria has not conducted major military operations in the south since 2009, when an amnesty ended a year-long crackdown against the armed Movement for the Emancipation of the Niger Delta (MEND).
MEND's activities had slashed Nigeria's oil output by two thirds.
The Avengers on Friday accused the government of planning to acquire drones to fight them, adding that President Muhammadu Buhari was not sincere with his peace offer.
"Mr. President, you can purchase all the drones in Europe and United States. It won't stop the Niger Delta Avengers from bringing the country's economy to zero," the NDA said in a statement.
"The worse you can do is to kill poor innocent people which the military is good at, but know the Nigerian economy will suffer," it said.
Governor Seriake Dickson of the southern oil-rich state of Bayelsa, an epicentre of the violence, visited Buhari this week and cautioned against the use of force, saying it would hurt civilians more.
Early this year, the government sent some troops into Gbaramatu community in Delta state, in search of fugitive former rebel leader Government "Tompolo" Ekpemupolo, a government contractor who is wanted for graft.
Local residents accused the troops of a range of abuses, including rape as well as looting and destroying their homes.
Ekpemupolo has denied allegations of being behind the NDA.
He was once a high-ranking member of MEND, an armed group that attacked oil and gas facilities in the 2000s.
MEND has denounced renewed violence in the region, advised against military action and appealed to the Avengers to give peace a chance.