Stop risky overseas acquisitions

China's two State-owned oil giants, China National Petroleum and China National Offshore Oil Corporation, recently made public their profits for the first half of this year.

CNPC made a net profit of only 531 million yuan ($79.6 million), a decline of 98 percent year-on-year, while CNOOC suffered a loss of 7.74 billion yuan; its first half-year loss since 2001.

Undoubtedly, plunging oil prices in recent years are one of the main reasons behind the two oil companies' poor performance. But CNOOC's losses are also related to its bolder and ill-considered overseas acquisitions. Although it did not mention it in its half-year report, all insiders know that CNOOC's acquisition of Nexen remains a major reason behind its fiscal deficit. When CNOOC announced its acquisition of the leading Canadian energy producer for $15.1 billion in 2013, it was the largest overseas acquisition by a Chinese company, and there were concerns that the deal would not be profitable.