PetroChina, the country's dominant oil and gas producer which also owns refineries, has earmarked close to $16 billion for overseas investment this year as it aims to have half its production outside China within 8 years.

The state-controlled oil giant , whose overseas output accounted for less than a tenth of its total production in January-June, will spend more than 100 billion yuan on overseas exploration, acquisitions and joint ventures with international oil companies this year, Vice Chairman and President Zhou Jiping told reporters on Thursday.

"Overseas development is a significant strategy for PetroChina. We will continue to accelerate our overseas investment," he said.

The amount planned for overseas spending is around the same as what China's leading offshore oil producer CNOOC has agreed to pay for Canadian oil firm Nexen.

PetroChina has not made any major overseas acquisitions this year, but will be able to meet its target of having half its total output abroad in 5-8 years, Zhou said, adding the company is "actively" looking for acquisition opportunities in Central Asia, East Africa, Australia and Canada.

"Under the tough global macroeconomic environment, many companies are reorganizing their assets, which at the same time has brought many opportunities," Zhou said, without elaborating.

Some international oil companies such as ConocoPhillips have been divesting assets in a number of countries including Canada and Nigeria as part of that global asset reassessment, drawing interest from Asian buyers.

Chinese oil giants, which also include Sinopec Group, parent of Asia's largest refiner Sinopec Corp, have been among the most aggressive buyers as they look to secure reserves to meet demand from the world's second-largest economy.

Q2 profit slump

PetroChina posted a drop of more than a fifth in its second-quarter earnings, hit by refining and chemicals losses. Global crude oil prices also fell during the second quarter.

It warned that the outlook for global economic recovery would remain "sluggish and tortuous" for the rest of this year as the euro zone crisis spreads and growth slows in China and emerging economies.

April-June net profit fell to 22.83 billion yuan ($3.59 billion) from 29 billion yuan a year earlier, based on Reuters' calculations, and lagged an average forecast of 26.73 billion yuan by 8 analysts polled by Reuters.

The refining and chemicals division posted a loss of 28.9 billion yuan in the first half - most of that in the refining business - with the company blaming "prolonged weakness in demand and the government's macroeconomic regulation and control over (the) price of domestic refined products."

The refining and chemicals business posted a second-quarter loss of 18.5 billion yuan, compared with a 10.4 billion yuan loss in the first quarter and a 60 billion yuan loss for the whole of last year.

Chinese refiners can't fully pass on higher crude oil costs to consumers as Beijing controls oil product prices to curb inflation. China's slowing economic growth has also hurt demand for chemicals.

Operating profit at the upstream - exploration and production - business fell to 53.4 billion yuan in the second quarter, squeezed by lower crude prices and flat output.

On Tuesday, CNOOC said its first-half net profit fell by almost a fifth - twice as much as the market had expected - as operating costs ballooned and it lost some production to an oil spill late last year.

Operating profit at PetroChina's natural gas and pipelines division slumped around 85% to 1.64 billion yuan in the first half, with the company having sold imported gas at a loss due to government price controls.

The loss over the first half of the year was 19.6 billion yuan, Zhou said, adding Beijing would consider deepening a market-oriented reform of China's natural gas pricing policy, leading to higher domestic gas prices.

Crude oil and natural gas output rose 3.8% year-on-year to 667.9 million barrels of oil equivalent (boe) in January-June. Refining throughput slipped 0.3% year on year and output of ethylene, the basic building block for plastics, declined 3.2% year on year.

Sinopec is due to report interim results on Sunday.