Nigeria's military on Saturday said it had arrested the leader of a gang responsible for a series of attacks on oil installations in the Niger Delta region.

Seifa Gbereke, known locally as "General Cairo," is also suspected of stealing crude from pipelines, a widening practice that costs Africa's largest producer roughly $5 billion a year, according to some estimates.

"We've been on the trail of General Cairo for five months," Lieutenant Colonel Oyeama Nwachukwu, spokesman for the military's regional Joint Task Force (JTF), told AFP.

"It is a very significant development, considering the fact that he's been terrorising the entire Delta region," he added, referring to the Thursday arrest.

Gbereke, said to be 25, is accused of orchestrating bomb attacks on pipelines and wells in the three Nigerian states with the largest crude deposits: Bayelsa, Delta and Rivers.

He and his seven associates are also thought to have stolen a considerable amount of oil to fund their criminal operations, according to the military spokesman.

Oil theft has been a growing problem in Nigeria, and Shell chief executive Peter Voser said in April that there have been estimates that 150,000 barrels of oil and condensate is stolen in the country each day.

Nigeria, the world's eight largest oil producer, has been producing between 2.0 and 2.4 million barrels per day in recent months. The sector generates 90 percent of the country's foreign exchange earnings.