The Iraqi army has dislodged Islamic State from the Qayyara oil producing region located south of their de facto capital Mosul.
The Qayyara region produces heavy sour crude and has a small refinery to process some of the oil.
Iraqi forces last month captured the Qayyara airbase which it plans to use as a hub to support forces advancing on Mosul, 60 km (38 miles) further north.
Prime Minister Abadi hopes to defeat the group this year by capturing Mosul, the largest city under its control in both Iraq and Syria.