The government's ongoing anti-corruption drive is having a diverse effect on outbound mergers and acquisitions activity, despite a growing number of opportunities brought about by dropping crude oil and commodities prices, according to a leading expert.

Jeremy South, global leader of mining M&As with Deloitte Touche Tohmatsu Ltd, said that China used to be a "very active buyer in the global energy M&A market", but since the government started to take serious action to fight corruption, "doing nothing has become the preferred strategy for some State-owned enterprises" in the sector.

South said the country's energy M&A market has slowed considerably over the past two years, as the national graft clampdown has picked up pace.

Last week the central government's anti-corruption watchdog said on its website that Wu Zhenfang, the former general manager of State-owned China National Offshore Oil Corp, the biggest offshore oil and gas producer, was being investigated for "serious disciplinary violations", meaning all three of the country's major energy companies have now fallen under the spotlight.

China National Petroleum Corp, the country's largest oil and gas producer, and Sinopec Group, Asia's biggest refiner, both have senior officials being investigated.

Like South, an insider close to CNPC told China Daily said that energy companies, especially State-owned ones, have now become extremely cautious over overseas deals, because of the complexities that can be involved and the possibility of being seen as falling foul of international M&A processes.

Han Xiaoping, chief information officer at China Energy Net Consulting Co, said the situation has become such that decisionmakers are cautious and that acquisitions have become more than just financial decisions.

He urged the authorities to introduce mechanisms that allow stricter supervision of overseas acquisitions, particularly by the country's oil companies.

According to the CNPC Economics and Technology Research Institute, the top three energy companies spent less than $3 billion in total on new overseas asset acquisitions in 2014, a 90 percent fall on the previous year.

In contrast, private energy companies have been accelerating their investments in foreign lands. The institute's data showed that Chinese private companies invested $2.2 billion in outbound M&A in the oil and gas sector last year, more than double the $1 billion invested in 2013.

"This year will be a better year for M&As because commodity prices are still low; but given the impact of the anti-corruption campaign, private companies will continue to be more active than the State-owned ones," said South.

Wang Kunxiao, president of Yantai Jereh Oilfield Services Group Co Ltd, a private oil company based in East China's Shandong province, said low crude prices have had a negative impact overall on the petroleum production chain, but emphasized that more foreign acquisition opportunities have surfaced as a result.

Wang said Yantai Jereh is currently researching potential oil and gas asset targets in countries including Iraq, Russia and Venezuela.

Companies dig for value in mining deals

With economic growth slowing and commodity prices sinking, Chinese resources companies are becoming more selective in outbound mergers and acquisitions, one expert said.

"If you think commodity prices will go up in the long term, this is the time to buy," said Jeremy South, a specialist in mining M&A at Deloitte Touche Tohmatsu Ltd.

During the past 18 months, falling commodity prices have pushed many small companies into "survival mode", according to a Deloitte report called Tracking the Trends 2015.

In 2007, global mining deals reached $103 billion, but in 2013 the figure was only $12 billion. In the first half of 2014, 117 transactions in the mining sector were announced, with the total value rising 56 percent year-on-year to $13.2 billion, Deloitte said.

"As the situation of junior companies becomes more dire, they may be forced to sell at any price at some point," it said. Given these conditions, Chinese companies will be more selective in the outbound M&A market, said South.

According to the report, Chinese investment has long fueled the resources sector, but it appears to be waning. "The failure of roughly 80 percent of China's overseas mining deals has seen the country pull back on resource investments in countries throughout Africa, South America and the Middle East," said the report.

"In the future, Chinese buyers will only be interested in assets that China needs like copper and gold," said South. And unlike the many small deals of the past, Chinese companies will focus on big-ticket transactions, he said.

In April 2014, a Chinese consortium purchased a Peruvian copper mine from Glencore Xstrata for $5.85 billion. Globally, there are many sectors in the mining industry that have potential, including copper, zinc, lead, gold and coking coal, according to South.