Iraq Isis Shia volunteers
Shia volunteers, who have joined the Iraqi army to fight against the predominantly Sunni militants from the radical Islamic State of Iraq and the Levant Reuters

The bosses of oil refineries located to the south of Baghdad have been told to recruit and organise units of volunteer fighters to protect the facilities from encroaching Isis militants.

According to a report by the International Oil Daily, senior southern Iraqi oil executives were ordered to form units of volunteers to protect oil instillations against a possible attack from advancing Sunni insurgents.

The vast majority of Iraq's functioning oil infrastructure is located south of the capital Baghdad, which has so far been unaffected by the fighting in the north of the country.

Isis, which has led a coalition of Sunni militants on a bloody campaign across northern Iraq, has vowed to take the capital Baghdad. The Sunni coalition took Iraq's second city of Mosul after the Iraqi army and security forces fled.

Tikrit soon followed suit and the group has continued its advance southwards towards the capital. Reports emerged that the group had made gains after heavy fighting in Baquba, capital of Diyala province, on Wednesday.

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Further north, Sunni militants were involved in fighting with the Iraqi army at the country's largest oil refinery in the town of Baiji.

Early reports suggested the militants had seized control of most of the facility, but the Iraqi army rejected these reports and said 40 insurgents had been killed at the refinery.

The Baiji refinery processes up to 300,000 barrels of oil per day and supplies Iraq's domestic needs, including the capital Baghdad.

Foreign workers were evacuated from the plant on Tuesday, while operations were shut down as security forces braced for an attack.

Meanwhile, Iraq's Prime Minister Nouri al-Maliki has addressed the nation in a televised speech, calling on volunteers to take up arms to halt the militants' surge.

"The country has suffered a setback, but not every setback is a defeat. It has allowed Iraq to recover national unity," he said on Wednesday. "The Iraqi people will not be defeated."

Southern Iraq's oil production has continued at normal levels throughout the crisis, with exports consistently around 2.8 million barrels per day.