Defense officials said they would negotiate a protection agreement with the militants groups, This Day newspaper reported Wednesday.

"We will engage them to police oil pipelines, but they must first form themselves into limited liability companies for us to discuss with them," Nigerian Defense Minister Yayale Ahmed told federal lawmakers this week.

The initiative, said Yayale, would not only help curtail attacks on oil installations in the oil-rich delta carried out by armed groups, including rival militants, but would prevent foreign oil companies from illegally "bunkering," or tapping into, rival oil reserves.

"This will check the activities of even oil companies who cleverly engage in oil bunkering. We must fight criminality wherever it exists," the minister said.

The country's top defense official noted that the decision to reach out to the militants was part of President Umaru Yar'Adua's effort to combat violence and lawless in the delta.