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The CNPC employee was reported by news wires to have been hijacked while working at the Halfaya oilfield but was later released by his captors and was undergoing medical checks in hospital.

The Chinese state-owned company was reported to have taken precautionary measures by evacuating some of its staff working at the Al-Ahdab field, located 180 kilometres south-east of Baghdad, as the jihadist militants with the Islamic State in Iraq and the Levant (Isis) tried to advance on the capital after taking over several cities in northern Iraq.

There are hundreds of employees with Chinese oil companies working in Iraq, led by CNPC that also holds a stake in the giant Rumaila oilfield – located 50 kilometres west of Basra in southern Iraq – as well as Halfaya and Al-Ahdab.

Compatriots Sinopec and China National Offshore Oil Corporation, which are also operating in Iraq, have yet to evacuate their staff as their operations are in the southern part of the country, company officials confirmed.

The Iraqi government issued a statement in early June warning that employees of oil and gas companies operating in Iraq could be the target of attacks by insurgents, some of whom could be pretending to be police.

Iraqi troops were reported on Tuesday to be involved in heavy clashes with Isis militants in and around the city of Baquba, about 60 kilometres north of Baghdad, after some outlying districts were briefly captured by the rebels before being retaken by the military and allied Shia militia.

The militants overran the northern cities of Mosul and Tikrit in a rapid advance last week, and seized Tal-Afar on Monday.

Meanwhile, the country’s biggest oil refinery at Baiji was reported to have been shut down overnight and its foreign staff evacuated after being surrounded by militants.

Refinery officials were reported as saying by Reuters that local staff remain in place and the military was still in control of the facility.

"Due to the recent attacks of militants by mortars, the refinery administration decided to evacuate foreign workers for their safety and also to completely shut down production units to avoid extensive damage that could result," a chief engineer at the refinery said on condition of anonymity.

However, there were unconfirmed reports that some of the jihadists had entered part of the refinery site.

London-based research firm Energy Aspects said about 90% of Iraq’s oil production and exports is concentrated in the south of the country and so far remains unaffected by the violence.

However, it stated in a report “the rate of activity in the south is likely to slow as some foreign workers are evacuated”.