The attack on the Baiji refinery, in Salaheddin province north of Baghdad, struck at around 4:30 am (0130 GMT) on Saturday when gunmen stormed the installation, killed the engineers and planted bombs at the refining unit.
"Armed men entered the refinery and shot dead two of the engineers," said Abdul Qader al-Saab, the facility's deputy chief.
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"Then they detonated bombs at one unit, the Al-Shamal unit, of the refinery, which represents 25 percent of the refinery's production. In the morning, we came to put out the fire, which erupted as a result of the bombs."
He added that the unit was badly damaged and the entire refinery had been closed.
Iraq currently has three major refineries - Baiji in the north, Basra in the south, and Dora in south Baghdad.
They have a combined capacity to handle 550,000 barrels per day of crude, producing refined products including 12 million litres (3.2 million gallons) of petrol, 15 million litres of diesel, nine million litres of heating oil and large volumes of fuel oil for power stations.
Baiji on its own has overall capacity of 290,000 barrels but was operating at 70 percent capacity before the attack.
The combined effects of years of UN sanctions against the regime of now executed dictator Saddam Hussein, and the US-led invasion of 2003 and its violent aftermath have meant that they are in serious need of refurbishment.
