Nigerian government will probably now be pressured by the big oil companies to negotiate with the rebels as fighting disrupted oil production in the area. However some Nigerian residents are afraid violent rebels will receive more benefits from the oil and take away their share.
From this analysis of the cease fire from the Guardian, reporter Michelle Faul profiles the rebel group and their issues.
The Movement for the Emancipation of the Niger Delta has been attacking oil installations, kidnapping petroleum company employees and fighting government troops since January 2006 in what it calls a protest against the unrelenting poverty of people in the Niger Delta. Nigeria's military has fighting a losing battle against opponents using guerrilla tactics in an intricate network of lagoons, creeks, estuaries and mangrove swamps stretching across a million square miles â home to several minority groups and some of Africa's largest oil deposits.
The poverty there has been deepened by more than 50 years of oil production: soil once used for crops is sticky from crude oil leaks, rivers that used to provide fish are slick with oil and the air is acrid with fumes from decades of gas flaring.
The Movement for the Emancipation of the Niger Delta called the cease-fire Wednesday saying the government had met one of its demands by releasing ailing rebel leader Henry Okah. It said it wants to negotiate with the government, is busy identifying envoys and hopes the 60-day cease-fire will create "an enabling environment" for negotiations.
President Umar Yar'Adua's special adviser on the southern Delta region, where all Nigeria's oil is produced, responded that the president was "sincere and committed, and is truly poised to turn the Niger Delta into a bastion of peace and development."
But the rebel group has called cease-fires before, the government has made similar promises and all has come to naught. In January, the group called off a four-month cease-fire alleging that the government had broken it, though the government denied that.
The most pressing issue, one the government can address most speedily, is the 13 percent share of national oil revenue allocated to the delta under Nigeria's federal system. Various groups in the region have been demanding an increase that would bring that share up to anywhere from 25 percent to 100 percent of revenue.
But Yar'Adua's government, like its predecessor, is showing little enthusiasm and faces political resistance from other parts of the country that automatically must accept less revenue if more goes to the delta. The economy of Nigeria, Africa's most populous nation of 140 million, is almost totally dependent on oil.