* Eastern LNA has been unable to defend ground positions
* Battle risks strengthening hardliners on both sides
* Output from key oil ports threatened
(Adds updated oil production figure)
By Aidan Lewis and Ayman al-Warfalli
TUNIS/BENGHAZI, Libya, March 10 Early in the
morning, small groups of armed pick-up trucks raced across the
desert towards some of Libya's biggest oil export terminals.
A previous attempt by the Benghazi Defence Brigades (BDB) to
capture the ports had failed. But the attack last Friday caught
the eastern-based Libyan National Army (LNA) by surprise.
The LNA's withdrawal from the ports of Es Sider and Ras
Lanuf has dented its claims to military superiority, dimming the
prospects for its leader, Khalifa Haftar, to expand his power.
It also opens up a new front between factions battling on
and off for power in Libya since 2014, throwing efforts to unite
the country and rebuild oil production into deep uncertainty.
The North African state is exempt from a recent OPEC deal to
limit global supply, and had more than doubled its output in
recent months to about 700,000 barrels per day (bpd).
The LNA says it is mobilising for a counter attack,
personally overseen by Haftar, against the BDB, the most recent
armed faction to contest ports that should account for more than
half of the OPEC member's exports.
The BDB says it is seeking a route to Benghazi, from where
many of its members had fled in the face of LNA advances against
Islamists and other opponents over the past two years.
It says it is fighting for families trapped or displaced by
the LNA's military campaign, and to save Libya from a return to
dictatorship and protect the revolution that toppled Muammar
Gaddafi in 2011.
"Our main goal is to retake our city, we reject injustice
and military rule," BDB commander Mustafa al-Sharksi told
reporters. "When we rallied against Gaddafi, we wanted freedom,
we wanted to build legitimate institutions, and leaders who
would rule the country as those in the developed world do."
Haftar, a former Gaddafi ally who casts himself as the man
to save Libya from the chaos of militia rule, received a big
boost in September when he took over Es Sider and Ras Lanuf, as
well as Brega and Zueitina, two other terminals on the a strip
of coast southwest of Benghazi known as the Oil Crescent.
Peeling away tribal support, Haftar ousted Ibrahim Jathran,
a commander of Libya's Petroleum Facilities Guard (PFG) who had
become unpopular for demanding money to end a port blockade.
The National Oil Corporation (NOC) in Tripoli was quickly
invited to reopen the ports, and Libya's production more than
doubled to 600,000 bpd.
The BDB has also said it will allow the NOC to operate
freely, inviting in a PFG head appointed by the U.N.-backed
Government of National Accord (GNA) in Tripoli.
Because Es Sider and Ras Lanuf were badly damaged in
previous fighting and are operating at far lower levels than
Zueitina and Brega, the initial impact on production has been
limited. Total output stood at about 620,000 bpd on Thursday,
NOC Chairman Mustafa Sanalla told Reuters.
But the BDB advance has put oil back at the centre of
conflict and ambitious NOC plans to revive production may be
stalled. The NOC had said it hoped to push output to more than 1
million bpd within months, on the way to pre-conflict output of
1.6 million bpd.
It will now require "pretty adroit footwork" by the NOC to
sustain such a message, said John Hamilton, a director of Cross
Border Information and an expert on Libyan energy.
"What this demonstrates is that Haftar is not able to
provide security for the terminals," he said. "How can any ship
owners or insurers or oil companies be confident of sending
vessels to lift crude, even if Haftar regains them?"
After taking the ports seven months ago, the LNA repelled
several attempted counter-attacks with air strikes, and carried
out what it said were preemptive strikes against BDB
mobilisation in the central desert region of Jufra.
Guards loyal to the LNA said the ports were well secured,
and safe for foreign workers to return.
But when the BDB advanced again last Friday, LNA defences
were quickly breached. LNA ground forces retreated towards
Brega, about 115 km (70 miles) east of Ras Lanuf, and lost more
than 30 men, according to medical sources.
There have been daily LNA strikes since, but their impact is
Sharksi said the BDB had air defence weaponry, claiming LNA
pilots "are scared so they fly at high altitudes".
Fawzi Boukatef, a rebel leader in Benghazi in 2011 who is in
contact with the BDB, said tribal support for Haftar, uncertain
in parts of the east, had eroded in the Oil Crescent, and that
mercenaries from southern Libya and sub-Saharan Africa who had
been operating for the LNA had been bought off.
"Some were paid to leave the area and some were paid to
fight on the other side," he told Reuters.
The BDB, dismissed as al Qaeda-linked militants by the LNA,
in fact have a wide support base, said Anas El Gomati, head of
the Sadeq Institute, a Libyan think tank. They are motivated by
the desire to get thousands of displaced families back to
Benghazi, help those caught in a long siege in the district of
Ganfouda, and by recent LNA air strikes in the desert.
"The attacks in Jufra certainly galvanized support for the
BDB and created a rallying call against Haftar," he said.
Some BDB support comes from Misrata, the western port city
that has been a source of military opposition to Haftar and
where many displaced families from Benghazi have been living.
Though moderates in Misrata supported a U.N.-backed
Government of National Accord (GNA) in Tripoli and have even
been open to a deal with Haftar, fighting in the Oil Crescent
risks strengthening hardliners on both sides, analysts say.
Haftar has shunned efforts to revive the U.N. peace process,
while accusing elements within the GNA of supporting the BDB. A
group of nearly 40 pro-Haftar members of Libya's eastern
parliament voted this week to drop support from the GNA's
leadership and withdraw from U.N.-mediated dialogue.
"From where we're sitting today, a deal looks highly
unlikely," said Gomati.
(Writing by Aidan Lewis; Editing by Mark Potter)