Libya's state-run National Oil Corporation has declared itself inoperable at 11 oil fields after a series of attacks by rebels purportedly linked to the Islamic State of Iraq and the Levant (ISIL) group, and threatened to close all oil fields and ports if the country’s security situation does not improve.
The force majeure - a legal step shielding the company from liability if it cannot fulfil contracts for reasons beyond its control - was announced on Wednesday shortly after gunmen attacked the Dahra oil field near Libya's central coast.
The attack on the oil field prompted a counterattack by government forces that included air strikes, said Mashallah al-Zewi, oil minister of the country's Tripoli-based government.
Libya's legislators are split between the UN-recognised government in the eastern city of Tobruk and rival, legally installed government in the capital, Tripoli.
The political turmoil fuelled rival militias and allowed fighters claiming association with ISIL to gain control of the cities of Sirte and Darna.
The fighters on Wednesday swept down from Sirte to attack Dahra, trading fire with guards and blowing up residential and administrative buildings before retreating, said Zewi.
"They surrounded the site from three different directions, and when guards ran out of ammunition, they stormed the place, looted everything and then bombed the buildings, leaving them in ruins," he said.
He added that all employees and workers, including foreigners, were safely evacuated and that there was heavy damage to the equipment in the oilfield.
The attack comes one day before negotiations between the country's rival governments are set to resume in Morocco. The talks are expected to focus on a path towards a national unity government and security arrangements to pave the way for a ceasefire.
Oil production dropped dramatically in Libya after the country's 2011 civil war that toppled the former ruler Muammar Gaddafi.
Since then, Libya has been awash with weapons used by various factions.
In January, ISIL-linked fighters carried out a deadly attack on a luxury hotel in Tripoli. The following month, they released a video showing the beheadings of 21 Egyptian Coptic Christians - which led the Egyptian military to launch air strikes on Darna.
Source: Al Jazeera and agencies