* Security situation has deteriorated in Libya
* Few foreign companies or expatriate staff outside oil sector
* Briton and New Zealander shot in the head
By Ghaith Shennib
TRIPOLI, Jan 3 (Reuters) - A British man and a woman from New Zealand who both worked for an oilfield maintenance firm were killed execution-style with shots to the head as they picnicked on a lonely beach in western Libya, a Libyan security official said on Friday.
The two bodies were found on Thursday in the Mellitah area, some 100 km (60 miles) west of Tripoli, near a large oil and gas complex co-owned by Italy's ENI and a residential complex, security sources said.
Libya's security situation has deteriorated in recent months as the government struggles to rein in militias and tribesmen who helped to overthrow Muammar Gaddafi in 2011 and kept their guns.
Few foreign companies outside the oil sector still operate in Libya, and those that do rely heavily on local staff. Others have moved expatriates to gated compounds and restricted their movements, especially at night.
Giving the first details of the incident, the security official said the Briton, born in 1965, and the New Zealander, born in 1967, had been found lying face down on the beach with gunshot wounds to their heads.
"It doesn't look like a robbery because there was no break-in at their Toyota car parked nearby. It was left untouched until we came," said the official, declining to be named.
"We found the bullets," he said, adding that the two people appeared to have been picnicking on the shore.
Both the victims worked for Blue Energy, an oilfield maintenance firm, and had been driving to Mellitah in a Tripoli-registered car, the official said.
Britain's Foreign Office urged Libya to "continue to do all it can to bring to justice the perpetrators of this appalling crime, as it strives to build strong rule of law in Libya".
In a separate incident, authorities released two Americans detained by the army in the violent eastern city of Benghazi, the men's basketball club said.
The men, contracted to play for the Al-Hilal club, had been detained on the campus of Benghazi university and taken to the army's headquarters, Libyan security officials said on Thursday, without giving any details.
"They were released last night," said Salah al-Fetouri, president of the club.
He said the army, which mans checkpoints and patrols in the city, had been suspicious of the men because they were out at night in a campus normally closed to non-students.
"After their identity had been confirmed they were released," he said. One of the pair is of Cameroonian origin.
These days few foreigners live in Benghazi, a city in the oil-rich east where assassinations and car bombings are regular occurrences.