You need Source vampirism skill.
It's another source skill like Spirit Vision. If you don't have it, find a source master (Im assuming you just did Sahiela stuff), she is one, so she should give you another slot for source. Once you open up the second slot, do the ritual again to get the 2nd skill that lets you kill/absorb spirits". Then in the dialogue choice, it'll give you an option against the guy. (it gives you the option against every spirit, or you can do it directly from the skill).
