The illegal refineries were shoddy facilities where operators were distilling crude oil to sell on the black market.
Timothy Antigha, a spokesman for Nigerian security forces, told the Platts news agency that soldiers destroyed 500 illegal refineries in the oil-rich Niger Delta.
"The operators, we believe, were those that break into the vast network of pipelines in the Niger Delta to steal crude oil which they refine, and sometimes they damage wellheads in the process," he was quoted as saying.
Platts notes that thieves have cost Nigeria an average of around 100,000 barrels of crude oil per day.
Financial analysts, meanwhile, said that Nigeria is benefiting from the rising price of crude oil.
Oil prices are at two-year highs in part because of the civil war raging in Libya, Africa's top oil producer. Officials at the Nigerian Financial Derivatives Co. told Nigerian newspaper Next that tensions in the Middle East were a "blessing" for Nigeria.
Oil production in Nigeria is up since January, they said, and the region is relatively stable.