The government said security forces were working to restore order in Palma, which is adjacent to gas projects worth $60 billion led by companies including Total, after it came under a three-pronged attack on Wednesday.
“Almost the entire town was destroyed. Many people are dead,” a worker at the LNG gas project site said in a phone call with the news agency.
“As locals fled to the bush, workers from LNG companies, including foreigners, took refuge in hotel Amarula where they are waiting to be rescued,” the worker told AFP, asking not to be named.
“But until nightfall, many people remained on the premises while militants tried to advance towards the hotel,” he said.
The attack, in a province that has since 2017 been targeted by Islamist insurgents with links to Islamic State, began hours after the French oil major said it would resume work on the project after halting it for security reasons.
The assault was the first significant one on Palma, which hosts several international companies looking to cash in on one of the biggest gas finds in a decade.
Total had suspended activities at the site in January due to safety issues, and requested that the government create a 25-kilometer (15-mile) "special security area" around it as a condition for returning. Palma falls within that zone.
The government said it had no information about casualties or damage as communications to the town have been cut.
Helicopters contracted by the government provided air support as small groups of people fled by road, according to the security source who was involved in the operation to secure Palma.
Total had no immediate comment regarding the impact of the attack on its operations.