Iraqi forces and Sunni militants clashed in an all-out battle on Wednesday as each struggled to gain control of the nation's largest oil refinery.

Reports varied late Wednesday with Iraq's government claiming to have pushed back the extremist forces while eyewitnesses at the oil refinery claimed that the militants had taken over close to 75 percent of the area.

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"The militants have managed to break into the refinery. Now they are in control of the production units, administration building and four watch towers. This is 75 percent of the refinery," an official speaking from inside the refinery told Reuters on Wednesday.

Iraqi officials denied reports that the refinery, located some 155 miles north of the capital of Baghdad, had been overrun.

Militants from the notorious ISIS targeted the area with mortars and machine guns, and after hours of fighting, two fuel-storage tanks were reported to be on fire. Iraqi forces responded by targeting the militant fighters with helicopter gunships.

Iraq's chief military spokesman, Lt. Gen. Qassim al-Moussawi, claimed that 40 ISIS fighters were killed during the overnight battle, but independent sources have yet to confirm this number.

As a result of the attack, the Beiji refinery was shut down and workers were transported away from the conflict via helicopter.

The refinery accounts for over a quarter of Iraq's filtering capacity, and oil refined at Beiji goes primarily towards domestic consumption such as gasoline, cooking oil and fuel for power stations.

A militant takeover, or even just a lengthy attack at the refinery could lead to long gasoline lines and electricity shortages in a nation already worn with conflict.

Prime Minister Nouri al-Maliki attempted to rally the distraught nation in a televised address on Wednesday, and tried to lend an optimistic tone to the outcome of the attack. He also hoped to garner support for his supposed counteroffensive which he claims will take control out of ISIS' hands and place it back in the government's.

TagsISIS, armed conflict, Islamic Extremist Groups, Oil Refinery