BASRA, Aug 19 (AFP) - Militiamen loyal to radical Shiite cleric Moqtada Sadr Thursday set fire to the offices and warehouses of Iraq`s South Oil Company here, a company official said.
"The Medhi militiamen set on fire our offices and warehouses in Basra," a company spokesman said on condition of anonymity.
"The British army is now surrounding the offices."
Earlier Thursday, a Sadr aide had threatened to attack southern oil infrastructure in response to the fighting in the holy city of Najaf.
"We will not leave a single coalition base untouched and we will attack oil wells if attacks on Najaf continue," Sheikh Ahmed Fartusi, who called himself the commander of the Mehdi Army in the southern city of Basra, told AFP.
Mehdi Army fighters prowled the streets of Basra, despite a heavy police presence, an AFP correspondent said.
"Residents of southern Iraq, mainly in Basra and Amara, have bombed several pipelines and are threatening to torch all the oil wells in the south," Sheikh Aws al-Khafagi, head of Sadr`s office in Nasiriyah, also told Al-Jazeera television.
Previous threats to oil infrastructure in southern Iraq have caused production to be halted and pipelines to be shut down, helping to send oil prices soaring.
Export of crude from southern oil terminals have been cut by half for more than a week now because of threats to infrastructure from the militia.
According to the government, the reduction in exports is costing Iraq some 80 million dollars a day.