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By Tife Owolabi
PORT HARCOURT, Nigeria, Feb 14 (Reuters) - Nigeria needs tooffer work to people who make a living from illegally refiningoil in the Niger Delta in order to achieve peace there, theAfrican oil-producing nation's Vice President Yemi Osinbajo saidon Tuesday.
The government has been holding talks with militants to endattacks on oil pipelines which cut the country's output by700,000 barrels a day for several months last year.
But a military crackdown on thousands of illegal refineriesin the southern swamps, which process crude oil stolen from oilmajors and state oil firm NNPC, has raised tensions again.
Illicit refineries process stolen crude in makeshift,blackened structures of pipes and metal tanks hidden inoil-soaked clearings deep in the Niger Delta's thick bush land.
"Our approach to that is that we must engage them (illegalrefiners) by establishing modular refineries so that they canparticipate in legal refineries," Osinbajo said during a visitto Rivers state, part of the Delta region.
"We have recognised that young men must be properlyengaged," he said, without giving details.
He also said the government would make more provisions foran amnesty scheme for former militants who laid down arms in2009 in exchange for cash stipends and job training.
Illegal refining is one of the few businesses flourishing inan otherwise desolate region, as petrol is scarce in Nigeria dueto the country's derelict state refineries.
Authorities had originally cut the budget for cash paymentsto militants to end corruption but later resumed payments tostop surging pipeline attacks crippling vital oil revenues.
"We have make more provisions for amnesty and provisions forsocial intervention," Osinbajo told residents of Port Harcourt,the region's major city. He has been visiting the Niger Deltasince last month to calm tensions.
The militants and residents who sympathise with them saythey want a greater share of Nigeria's oil wealth to go to theimpoverished region.
Crude sales make up about 70 percent of government revenueand the attacks have deepened an economic crisis brought on bylow global oil prices.
Nigeria last put its crude output at between 1.7 million bpdand 1.8 million bpd, down from the 2.2 million bpd at the startof 2016. (Writing by Ulf Laessing; Editing by Jason Neely and AlexanderSmith)