• Major Chinese oil companies have cut down on overseas spending amid the continuing drop in oil prices.

Major Chinese oil companies have cut down on overseas spending amid the continuing drop in oil prices. (Photo : Getty Images)

As global oil prices continue to slide down, Chinese fuel companies have started cutting down on overseas investments to prevent losses.

State-owned China National Offshore Oil Corporation was the latest among the country's major oil companies to announce cutbacks in production targets amid the continuing drop in oil prices in the international market. CNOOC has projected a production of 470 million to 485 million barrels of oil equivalent (boe) for this year.

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The new projection is down by 4.7 to 7.7 percent from 509 million boe projected for 2015. This is also lower than the 500 million boe that analysts from both Barclay and Sanford Bernstein predicted.

The corporation also revealed the target for 2017 at 494 million boe. Meanwhile, the target for 2018 is expected to fare better at 502 million boe.

CNOOC is also cutting down on projected capital expenditure, the South China Morning Post reported. The company has allotted around 60 billion yuan (around $9.1 billion) of capital for projects, which is lower than the 70 billion to 80 billion yuan ($11 billion to $12 billion) announced for last year.

According to CNOOC chief energy researcher Chen Weidong, the current trend of decreasing oil prices is affecting their operations. Chen said that the high cost of processing oil set against the current lower price means that they end up netting considerable losses.

The company had invested in several oil sands drilling projects in Canada, which Chen said cost more than conventional oil drilling ventures because of the more complicated process.

Analysts said that the effects brought about by the current oil price slump are likely to continue for another year. The continuing drop in prices is attributed to the current oversupply in the market. This has been exacerbated by the imminent removal of export sanctions against Iran, which has the world's fourth largest known oil reserves, The Week reported.

Iran is expected to increase production to around 1 million barrels within six months after the lifting of sanctions.

International benchmark Brent crude dropped to below $28 a barrel on Monday before settling to $30 a barrel.