Forces loyal to Muammar Qaddafi have killed at least 15 guards and injured two others in an guerilla raid on an oil facility outside the coastal town of Ras Lanuf, fighters of Libya's National Transitional Council (NTC) have said.
Citing NTC fighters present at the scene, reporters say a column of vehicles carrying armed Qaddafi loyalists drove up to the refinery's checkpoint on Monday morning.
Ras Lanuf is located approximately 600km east of the capital, Tripoli.
The attack comes as contentious forces for the interim rebel government in Tripoli fight a chaotic street-to-street battle against unexpected resistance ten times what they had estimated in Bani Walid - and outside the stronghold of Sirte - as commanders report a loss of discipline in the ranks.
Anti-Qaddafi fighters had reached the gates of Bani Walid, located 150km southeast of Tripoli, on Sunday but encountered fierce resistance from Qaddafi loyalists who ignored a NTC deadline to surrender.
The NTC has said that it will not declare Libya "liberated" until it has taken control of towns still in the hands of Qaddafi loyalists.
Meanwhile, Mahmoud Jibril, Libya's de facto prime minister, has said that oil production in some oil fields have been normalized following months of unrest.
The announcement was made on Sunday as Jibril vowed to form a new government within 10 days, carrying representation from all parts of the country - including areas that are not yet under the new establishment’s control.
Libya faces serious challenges, especially on the security and stabilization front, but some oil fields have already resumed production, he said, emphasizing that salaries of government workers will be paid on time.
"The salaries of the month of July will be paid in the eastern part of Libya, following which the month of August will be paid along with a bonus," he said.
"The liberated parts of Libya will also receive salaries with bonuses.
"The liquidity issue has been taken care of since we received the first installment (from the UK) of Libyan currency, which was previously frozen, an installment of over a billion dinars. There will be a second installment of 700 million dinars coming."
But supporters of the toppled Qaddafi regime continue to fight for the elusive strongman who has vowed to turn Libya into "hell" rather than surrender it to the rebels who are struggling to meet shortages of food, electricity, money, and water on a daily basis. Qaddafi loyalists still maintain control of the critical water pipeline that feeds Tripoli.
Reopening Libya's oil fields and refineries was seen as a quick fix for the rebel councils dramatic liquidity problems, but observers say it may signal Qaddafi's promised insurgency against the fledgling rebel government has begun.
The attack also underscores concerns voiced in Western capitals that the fugitive Qaddafi may be able to use his billions in pilfered funds and arms stockpiles to destabilize Libya before it can get back on its feet. On Sunday it was reported Qaddafi son Saadi had crossed into Niger to purchase arms and hire mercenaries.
Last week it was reported a convoy of some 200-250 armored vehicles headed by one of Qaddafi's top generals had also passed into Niger en route to Burkina Faso, which has offered Qaddafi asylum. A military uprising due to poor pay in Burkina Faso earlier this year makes it a ripe recruiting ground for mercenary soldiers - even if Qaddafi declines to go into exile there.