Restoration of production to pre-war levels just four months after Col Muammar Gaddafi was killed in the desert has been hailed by the Western backers of the new government.
However recent developments have provoked warnings that mismanagement could force the industry into long-term decline.
Arabian Gulf Oil Co, the country's largest producer with a near monopoly over the eastern oilfields, spent last week in a battle of wills with Tripoli's transitional government.
Its management threatened to shut down crude production unless armed protesters who were blockading its Benghazi offices were persuaded to leave. The 50 gun-toting men at its gates have been barring employees from entering the facility for two weeks.
The company produces 375,000 barrels of crude a day of the 1.4m pumped nationwide. A stoppage would derail attempts to raise its output to 425,000 barrels a day in mid-May.
In its final throes the cash-strapped regime was unable to provide petrol to the pumps, rendering the roads and highways of the capital deserted.
The activity compensates for failures elsewhere – few government departments are functioning normally and militias have not been disarmed or disbanded.
"If this is not dealt with, then the consequences would be grave. It is unbelievable that a company as big as AGOCO remain hostage to a group of people," said Abdul Jalil Mayuf, a spokesman. "The government should either deal with them by force or find a solution."
Foreign experts on Libya's oil industry believe only a minority of expatriate personnel have returned to the country, mostly to staff headquarters in relatively safe Tripoli. Most cite security concerns for not returning personnel to the oilfields. The logistics of even visiting the desert camps in the Sirte or Murzug basins involves negotiations with multiple militia commanders to secure safe passage.
Until a national government is installed most companies are likely to defer large scale deployments for new projects.
"I don't think we'll see much momentum until the election fallout is known," said Henry Smith, a regional analyst at Control-Risks, the business risk consultants. "Security issues are still pronounced and the fragility of the current situation is significant. A lot of what we see is maintaining the existing infrastructure but no plans to expand until there is more clarity."
With former revolutionaries demanding jobs in the country's main industry, a scheme to absorb fighters into an oilfield's protection force is exposing damaging turf wars.
"We have been promised jobs as part of the protection force but so far the government has not approved the contracts," said Abdulhameed Aboragega, a member of the Zintan Miltia, one of the most prominent bands of anti-Gaddafi fighters. "There is a lot of resentment among our brigade members who thought they were going to be rewarded with jobs."
A Repsol joint venture was last month stormed by fighters seeking payment for six months work guarding its premises during the uprising.
A report from Barclay's warned that output was poised to stagnate as the scope for "temporary fixes" is exhausted.
Feedback from the first oil industry investment conference held in Tripoli since the war last week was "mixed" with participants reporting that officials could not provide assurances for new investors.
The arrival of the coffin containing the body of Shukri Ghanem, Gaddafi's former oil minister, at Tripoli airport on Thursday underlined the potential for the ghosts of regime to stalk the industry.
An audit leaked to Global Witness, the anti-corruption campaigners, found "murky" practices including discounting and sweetheart deals had cost the taxpayer millions.
"Murky dealings within Libya's National Oil Company, and the systematic mismanagement of the country's oil wealth have effectively denied millions of dollars to the people of Libya," said Giulio Carini, a campaigner at Global Witness. "The case for reform of the country's oil sector could not be stronger or more urgent."
Mr Ghanem, who was Libya's Opec delegate, oil minister and prime minister, was the oil industry's most powerful figure for decades under Gaddafi. He was found floating face down in the Danube but police have found no suggestion of foul-play.
The unexplained death of such a powerful figure gives already an unsettled sector reason to hold back while Libya's new rulers grapple with its prized asset.