"There may be more deaths because we saw several burnt bicycles around the fire. The villagers say they are still searching for missing persons," he said.

A Shell spokesman said the fire on the pipeline carrying crude from the onshore wells in Umudike district of Imo state to the Bonny Export terminal, started early Monday morning and raged for hours.

"We cannot say yet what the cause of the fire is because the villagers have not allowed us to go in and carry out preliminary investigation," he said. "We do not want to say it is sabotage."

"The fire has not affected production in any way. It was put out by Monday afternoon," the Shell spokesman added.

Police said in addition to the three dead, more than 17 others were injured.

Police said they were investigating whether the pipeline burst was because of erosion over time or whether villagers vandalised it to claim compensation.

Shell is Nigeria's largest producer, accounting for more than half of the OPEC member's production. It has suffered repeated disruptions to its operations from local communities who accuse the oil major of environmental degradation.