London (Platts)--9Mar2015/852 am EDT/1252 GMT

Libya's already crippled oil sector has been hit by a new wave of attacks by suspected Islamic State militants, with the latest incident seeing the al-Ghani field stormed by fighters late Friday, killing eight guards and sabotaging key field equipment.

The attack on al-Ghani, operated by Harouge Oil Operations, followed similar incidents in central Libya by IS fighters seemingly intent on destroying the country's oil infrastructure, rather than taking it under its own control.

"The group has sabotaged the al-Ghani field and caused considerable damage to the field," Libya's state-owned NOC said in a statement.

NOC and Canada's Suncor are partners in Harouge Oil Operations, which says al-Ghani has production capacity of around 70,000 b/d, though it was unclear whether the field was producing at the time of the attack.

As well as killing the eight guards, nine other workers based at the camp of Austrian oil services company VAOS were kidnapped.

"We are working tirelessly with the embassies, trusted partners and clients to have this situation positively resolved," VAOS said in an emailed statement.

The kidnapped group consisted of one Austrian, one Czech and seven non-EU nationals, it said.

Early last month, an armed IS group attacked the 40,000 b/d Mabruk oil field, operated by Mabruk Oil Operations, a joint venture of NOC and France's Total.

The field had already been suspended toward the end of last year after the closure of the Es Sider port that exports Mabruk output.

And in mid-February, militants attacked the pipeline linking the major Sarir field to the Marsa el-Hariga export terminal, forcing around 185,000 b/d of production to be shut in.

The field subsequently restarted after repairs were carried out to the pipeline.

CRISIS MEETING

Last week, NOC and oil operators in Libya held an emergency meeting in Tripoli on the emergence of IS fighters targeting oil infrastructure.

NOC chief Mustafa Sanalla chaired the meeting, which focused on making sure procedures were in place across the country for the timely evacuation of workers from oil fields while, at the same time, doing as much as possible to maintain the equipment at the fields.

"Procedures were also discussed for the declaration of force majeure at fields that have been attacked or those located in the immediate vicinity," NOC said.

The rise of IS -- which already controls large swathes of Iraq and Syria -- in Libya is symptomatic of how increasingly lawless the North African country has become as the Islamist-led self-declared government in Tripoli fights for power with the internationally recognized administration in exile in the east.

POWER STRUGGLE

The fight between the two governments has done nothing to resolve the issues faced by Libya's oil sector, still in a state of chaos with production running at around 300,000-350,000 b/d, less than a third of its output capacity.

Some exports continue, helped by cargoes being offered at the lowest values seen in years, but the country is thought to be running low on cash reserves.

A number of the main Libyan ports are shut or under force majeure because of fighting between government forces and rebel soldiers. These include the key eastern terminals of Es Sider and Ras Lanuf.

Last week, the air force of the Tripoli-based regime carried out attacks on Es Sider and Ras Lanuf, though only inflicting minor damage.

"Not only are competing political groups in Libya fighting for control of Libya's hydrocarbons sector, but there now appear to be jihadis bent on destroying it," Geoff Porter, analyst at North Africa Risk Consulting, said.

The lack of a functioning government has led to continued disruption of its oil sector, the country's economic mainstay.

It is estimated Libya is down to its last few billion dollars cash reserves, with its limited revenues from oil sales fast being depleted.

--Stuart Elliott, stuart.elliott@platts.com
--Edited by Dan Lalor, daniel.lalor@platts.com

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