Libyan PM seeks to reassert authority as oil production is hit

By Feras Bosalum and Ahmed Elumami BENGHAZI Libya (Reuters) - Libya's acting prime minister sought to reassert authority over his turbulent country by naming a new cabinet on Wednesday, but some lawmakers threatened to veto his choices and a rival assembly continued to hold sway in the capital. In a sign of the government's inability to control the vast desert nation, which has been rocked by anarchy, Libya's biggest oilfield stopped working after rockets fired by an armed group hit a refinery storage tank. Abdullah al-Thinni's administration has failed to control militia, and Islamists who backed the rebellion to oust strongman Muammar Gaddafi in 2011 have kept their weapons, staking claims on territory, oil and other resources. Western powers and Libya's neighbours fear the North African country is heading for civil war, with an armed group from the western city of Misrata seizing the capital Tripoli in August and forcing the elected parliament to move to the far east. Lawmakers said Thinni asked parliament to approve a new 16-strong cabinet, including prominent human rights activist Farida Allaghi as foreign minister -- his first new government since he was re-appointed as acting premier earlier this month. The names were not announced publicly. But parliamentarians told Reuters that Thinni had decided to appoint himself defence minister as well as prime minister, and that the list included some figures from the previous government. "There is a big possibility that the House of Representatives is going to reject the new government ... as it still includes ministers from the former government," Benghazi lawmaker Issam Al-Uraibi told Reuters. Parliament spokesman Faraj Hashim said lawmakers, working out of Tobruk near the Egyptian border because of the Tripoli violence, were unhappy about Thinni also serving as defence minister and might ask him to submit a new list. Thinni, a former career soldier, has been acting prime minister since March. He stood down after the June elections and the new parliament reappointed him at the start of this month. The Misrata group has set up its own parliament and government, which are not internationally recognised. OIL SLUMP In a major blow to the government, the El Sharara oil field was closed after a rocket hit a storage tank at the Zawiya refinery, which it supplies, an oil ministry official said. It was the first time that fighting between armed groups had hit Libya's oil industry since heavy clashes broke out in the capital Tripoli in July. The field closure will bring down Libya's production to around 670,000 barrels a day based on a production of 870,000 bpd reported by state-run National Oil Corp (NOC) on Sunday. "There is no production at El Sharara anymore," Ibrahim El-Awami, head of the inspection and measurement department at the oil ministry said. The Zawiya refinery was still working but will have to shut once stocks were used up, he said. The 120,000 bpd-refinery supplies western Libya and Tripoli with fuel. The Misrata alliance has been trying in recent weeks to take an area west of Tripoli held by the rival Warshefana group. There was no let up in fighting and Mohamed al-Kilani, a hardline militia leader in the Misrata alliance, was killed, residents and state news agency LANA said. Western powers and Arab countries called at a conference in Madrid for an immediate ceasefire. "There is a humanitarian drama unfolding which needs to be urgently addressed," said the conference's final communique. (Additional reporting by Ulf Laessing and Sarah White; Writing by Ulf Laessing; Editing by Andrew Heavens and Crispian Balmer)