(Updates with woman injured, adds details)

MAKHACHKALA, Russia, March 27 (Reuters) - Fire broke out at an oil depot in Russia's Caspian Sea region of Dagestan on Thursday, leaving a large part of its capital covered by thick smoke.

A female worker from the oil depot was taken to hospital with burns covering her entire body, Russian media said.

Residents reported hearing a powerful explosion before the fire engulfed parts of the oil depot near the Caspian Sea, but there was no information on the cause of the blast.

A freelance journalist working for Reuters saw thick plumes of black smoke covering almost half of Makhachkala.

Dagestan's Emergencies Minister Murtazali Gadzhiyev told Russia's Vesti-24 channel that firefighters were preparing to tackle the fire with foam to try to douse flames on a reservoir of some 10,000 tonnes of oil.

"We managed to open the taps ... and now this oil is being pumped out," Gadzhiyev said. "We are trying to keep the fire away from other reservoirs."

Dagestan and next-door Ingushetia, part of the volatile, multi-ethnic North Caucasus region, have become more unstable than neighbouring Chechnya, where Moscow has fought two wars against pro-independence rebels since 1994.

Skirmishes with federal troops, mine explosions and kidnappings have become commonplace in impoverished Dagestan, with the authorities blaming instability on Islamic rebels, including those flushed out of Chechnya by pro-Moscow troops. (Reporting by Dmitry Solovyov; Editing by Mark Trevelyan)

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