The demotion came on Wednesday after Obiang linked the Feb. 17 attack to internal complices.
Obiang, who returned to his residence in the island capital Malabo on Feb. 20, promised a big reward for clues on internal complices of the assailants, indicating a possibility that someone had been paid for relaxing regard.
A group of gunmen on board speedboats launched the predawn raid inducing hours of shootout, causing casualties on both sides. Obiang happened to be elsewhere on the country's mainland at the time.
The government said after daylight it had repelled the assault in which at least one attacker was shot dead and several others got drowned when the Navy sank their boat. A number of the rest were arrested.
On the side of the government, casualties include one dead and several wounded.
The Gulf of Guinea Commission (GGC), which includes Equatorial Guinea, denounced the attack as a coup attempt, voicing solidarity with its member state.
The GGC, created in April 2007 and headquartered in Luanda, Angola, also includes Angola, Nigeria, Cameroon, Sao Tome and Principe, Gabon, the Republic of Congo and the Democratic Republic of Congo.
So far, nobody has claimed responsibility for the attack, although the government attributed the hostility to an armed group from around Nigeria's Niger Delta.
The mainstream Movement for the Emancipation of the Niger Delta(MEND) immediately denied any involvement.
MEND, a Nigerian rebel group which defines itself to fight for only local interests, is known for attacks in southern Nigeria.
But speculation is running high that the attackers are similar to foreign mercenaries who were caught trying to overthrow the president in 2004, when members of MEND were reportedly recruited in the coup attempt.
Equatorial Guinea, which is the third oil producer in sub-Saharan Africa, has suffered coups and other forms of instability for years since its independence from Spain in 1968. Dozens of foreign mercenaries could pose a serious threat to the tiny, oil-rich Gulf of Guinea country, which has a population of 1 million and an area of more than 28,000 square km.