Residents in the city of Port Harcourt said that Nigerian troops burnt down hundreds of slum dwellings, allegedly as reprisal after an Army sergeant was killed in Thursday's abduction of oil workers in the area. 
Residents told news agencies that troops poured petrol over slum houses located near a compound belonging to Saipem, a subsidiary of Italian oil company Eni, and set them alight. The fires have reportedly destroyed hundreds of homes and shops and hundreds of people are said to have fled from the area. On Friday, people returning to the area and onlookers were chased away by soldiers. 
Speaking to the Associated Press, Army Brigadier General Samuel Salihu denied that Nigerian troops were responsible for the arson. He said that militants active in the area had set the fires, wearing Army camouflage. 
On Thursday, oil workers were kidnapped from a bar near the slums by armed men who shot dead an Army soldier guarding the workers, and injured another soldier. Nigerian military sources said at least two foreign oil workers were missing, one of them, Italian. The Italian foreign ministry, though, said that three foreigners were missing. 
The oil-rich Niger Delta region has witnessed a spate of kidnappings recently. Nineteen people were held captive in eight separate abductions this month. All but three of them have been released since, some after the state government and the oil companies paid a ransom. 
The Movement for the Emancipation of the Niger Delta (MEND), a militant group which has taken hostages and attacked oil facilities, but says it does not kidnap for ransom, said in a statement that it the state government has encouraged such abductions by paying ransoms.
Last week, as part of a tougher line adopted by the Nigerian government, President Obasanjo sent in the Army, with orders to use "force for force" against militants in the region. Over 160 people were taken into custody in a two day crackdown, including over 100 from a nearby slum, but most have been released since then. 
The BBC's Alex Last reports that local leaders and oil companies are concerned that this new tough policy will increase tensions in the region.
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Nigerian troops allegedly burned down slums after soldier's killing