BAGHDAD - Iraqi oil crews have resumed operations at a 20,000 barrel-per-day refinery in the north of the country after repairing severe damage caused by Islamic State, which took over the area in 2014, the oil ministry said in a statement on Thursday.

The newly repaired Siniya refinery is near Iraq's largest oil refinery of Baiji, which is still shut after suffering extensive damage in the war against Islamic State.

Iraqi engineers succeeded in "rehabilitating in record time the Siniya refinery, which was destroyed by Daesh gangs," the statement said, referring to Islamic State by an Arabic acronym.

As OPEC's second-largest oil producer after Saudi Arabia, Iraq's refining capacity was curtailed when Islamic State overran the Baiji refinery, north of Baghdad, in 2014.

Iraqi forces recaptured it in 2015 but it sustained heavy damage in the fighting. The country now relies on the Doura refinery in Baghdad and the Shuaiba in Basra.

Siniya will be supplied with around 20,000 barrels per day of crude from the Kirkuk oilfields and its output of oil products will be used to meet domestic needs in nearby areas and to feed power stations, refinery officials told Reuters.

(Reporting by Ahmed Rasheed, editing by David Evans) ((ahmed.rasheed@thomsonreuters.com; +964-7901-947-131; Reuters Messaging: ahmed.rasheed.thomsonreuters.com@thomsonreuters.net))