New world of woes for China's trio of oil companies

China Petrochemical Corp, Asia's biggest refiner and Sinopec's parent, plans to "more strictly" control capital investment and refining costs, Fu said.

The Chinese companies are not alone. The global oil industry, including Halliburton Co and Schlumberger Ltd, has cut more than $40 billion in spending and fired 50,000 or more workers to cope with oil prices.

BP Plc, Statoil ASA and BG Group Plc have written down almost $20 billion in asset values.

Units of PetroChina's parent China National Petroleum Corp need to "tighten belts for hard days" in 2015 and "win the war on cost-cutting", General Manager Liao Yongyuan said on Jan 6.

Spending cuts may not be enough. PetroChina plans to shut unprofitable chemical projects and reduce crude output at its aging field in the northeastern city of Daqing. Sinopec is seeking to enter new areas such as clean energy generation, new materials research and 3-D printing for growth.

It has not helped that production costs for Chinese oil companies increased over the past few years as they pursued the development of smaller, marginal fields to boost volume, according to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co.

PetroChina and Sinopec's production cost is probably about $50 per barrel, and CNOOC's is $45 per barrel, according to Beveridge's estimates. That means at a crude price of $50 a barrel they will not turn a profit.

The impact of crude prices has taken a toll on the shares of the Chinese oil companies. CNOOC shares fell 22 percent in the past six months, while Sinopec's declined 18 percent and those of PetroChina fell 16 percent.

But these are very large companies and the hand of the government cannot be underestimated, said Kai Hu, vice-president at Moody's Investors Service Inc, which rated all three Aa3, the second-highest investment grade, in a Feb 3 report.

"The stability in the companies' credit quality stems from the high likelihood of extraordinary support from the Chinese government," Hu said. "The oil companies' business diversity, strong liquidity cushions, likelihood of more conservative capital spending and the infusions of private capital and mixed ownership reform will also moderate the impact of the significantly lower exploration and production profits."