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TRIPOLI (Reuters) - A deadly attack on the U.S. consulate in Benghazi could further delay the already-slow return of expatriate workers to Libya, threatening the OPEC producer's future plans to boost output.
After last year's war that ousted Muammar Gaddafi, the North African country has surprised analysts by bringing its oil production close to pre-revolution levels faster than expected.
But expatriate oil workers are concerned about precarious security with a government struggling to impose its authority on a myriad of armed groups who refuse to lay down their weapons.
Last week's assault on the U.S. consulate and a safe house in the eastern city, in which the U.S. ambassador and three other Americans were killed, has heightened fears.
Many foreign oil firms operating in Africa's third biggest oil producer have since beefed up security measures in cities bristling with weapons and have restricted staff movements to the bare minimum.
An official at Libya's state-owned National Oil Corporation said a few senior U.S. oil executives had left the country "for a temporary time" and would be returning shortly.
"In general, of course it will have an impact on the security issue in Libya in all sectors, not only in oil," Deputy Oil Minister Omar Shakmak told Reuters. "It is important for any management to make sure their staff are safe and secure."
Outbursts of violence have deterred foreign firms from bringing back all their expatriates.
"It won't stop production but maybe those who were looking at exploration may be re-assessing as there is an increased security risk," a Western security contractor said.
"Staff could be cut down to essential levels and any plans of bringing families back will be further put on hold."
Libya, with Africa's largest oil reserves, needs foreign investment and expertise to increase oil and gas production. Oil fields have separate, secure residential compounds and thousands of former rebel fighters guard installations.
The country is aiming to be producing 2 million barrels per day by end-2015 but delays in returning foreigners workers - specifically those working for oil services firms out in the desert fields - could derail reaching the production target.
"It's certainly going to postpone efforts to increase production and could undermine efforts to maintain production at current levels," Geoff Porter of North Africa Risk Consulting said.
The 17th biggest oil producing nation, Libya has Africa's biggest crude oil reserves and 85 percent of its output is normally exported to Europe.
Most of Libya's oil fields are located in and around the Sirte Basin, which contains about 80 percent of proven reserves.
Major oil companies operating in Libya include Italy's ENI, Germany's Wintershall, France's Total, Spain's Repsol and U.S. firms Marathon and ConocoPhillips.
Insecurity and disruptions have already posed a challenge to Libya's oil recovery. In July, political protesters shut down three major oil exporting terminals for 48 hours.
The stoppages at El-Sider, Ras Lanuf and Brega shut half of Libya's oil exporting capacity and production was also cut by 300,000 barrels per day as a result of blockages. Output has since recovered to around pre-war levels of 1.6 million bpd.
There has been a spate of attacks on Western missions and organizations in Benghazi, cradle of the Libyan revolt as well as capital of Libya's eastern region where most of the country's oil is produced.
Foreign oil companies have their headquarters in Tripoli which is seen as safer.
"Our highest priority is safety. For this reason, we will continue to monitor and assess the situation in Libya carefully," a spokesman for Germany's Wintershall, the oil and gas arm of chemicals group BASF, said in a written statement shortly after last week's attack, adding:
"Our employees in Libya are very concerned by the attacks."
Officials have long spoken of plans to train thousands of former rebel fighters guarding Libya's oil infrastructure under an umbrella oil protection force. However progress has been slow as central authorities remain weak and fighters hold sway.
Shakmak said late U.S. ambassador Christopher Stevens had been involved in discussions about security in the oil sector. A Libyan oil source has said he had been due to meet officials at Libya's Arabian Gulf Oil Company the day after the attack.
"He had a lot of positive ideas," Shakmak said.
For U.S. international oil companies in Libya, Stevens' death means they have lost a key interlocutor.
Porter said: "It's going to be a while before the U.S. appoints a new ambassador. And then he/she will have to get up to speed. This is going to slow down U.S. IOCs."
"In addition, IOCs have been shaken by the U.S. intel failure. If the (government) didn't get the intel right, how are the security teams at IOCs supposed to know what's going on? They're all recalibrating their assessments right now."
Officials hope a new government, currently in the making after the election of Mustafa Abu Shagour last week as prime minister, will lead to concrete action to improve security.
"We need strong decision-making, better security," one Libyan oil worker said. "We all want to feel safe."
New details have emerged this week on security arrangements at the Benghazi consulate where there was no military personnel.
There were five civilian American security officers at the consulate, congressional aides said on condition of anonymity.
The State Department said it contracted with a private security firm, U.K.-based Blue Mountain Group, to hire Libyan nationals to carry out security measures at the consulate, such as operate metal detectors and sweep cars for explosives.
Representative C.A. "Dutch" Ruppersberger, the senior Democrat on the House Intelligence Committee, said areas like Benghazi were similar to "the Wild West years ago" where it is not unusual to see people driving around with weapons.
"Something was planned, it's just when it was planned. Was it days before, or was it as a result of the protest and an extremist radical group like al Qaeda taking advantage of it?" Ruppersberger said in an interview.
Additional reporting by Ali Shuaib in Tripoli and Vera Eckert in Frankfurt