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* BP reports Q2 profit of $2.8 bln, beating expectations
* Strong oil and gas production growth offset weaker prices
* BP has no plan to take its own tankers through Hormuz
* BP shares up 3.1% to 543.5 pence, top gainers in FTSE 100(Adds detail on Strait of Hormuz, updates share price)
By Ron Bousso
LONDON, July 30 (Reuters) - A strong rise in oil and gasproduction helped BP offset weaker crude prices andrefining profit to again beat profit expectations on Tuesday,boosting its shares.
BP's second quarter contrasts with Total andNorway's Equinor, which posted sharp earnings drops,and builds on a steady recovery after deep cost cuts since the2014 downturn, project start-ups and last year's $10.5 billionpurchase of BHP's U.S. shale assets.
"At the midpoint of our five-year plan, BP is right ontarget," Chief Executive Bob Dudley said in a statement.
By 0953 GMT, BP shares were up 3.1% to 543.5 pence, the topgainers in the FTSE 100 index.
Although BP's dividend remained unchanged at 10.25 cents pershare, its Chief Financial Officer Brian Gilvary said thecompany would consider raising it towards the end of the year asproceeds from asset sales come through and debt is reduced.
BP's results beat expectations for 10 quarters in a row,analysts at Bernstein said.
"Strong volume growth from accretive barrels and seamlessexecution remains underappreciated," said Bernstein, which hasan "outperform" recommendation on the stock.
Underlying replacement cost profit, the company's definitionof net income, reached $2.8 billion in the second quarter,exceeding a company-provided forecast of $2.46 billion.
The second-quarter profit was up from $2.4 billion in theprevious quarter, while BP's operating cash flow recovered to$6.8 billion in the quarter from $5.3 billion in the previousquarter as a result of a one-off working capital release.
HIGHER PRODUCTION
Second-quarter production rose to 3.8 million barrels of oilequivalent per day, 4% higher than a year earlier.
BP said it expects third-quarter 2019 reported production tobe lower than second-quarter, reflecting maintenance activitiesas well as the impact of Hurricane Barry on operations in theGulf of Mexico.
Benchmark Brent crude oil prices in the second quarteraveraged around $69 a barrel, up from $63 the previous quarterbut down from $74 a barrel a year earlier, BP said.
In the refining and marketing segment, known as downstream,profits dropped due to lower sales and refinery throughput asplants underwent maintenance ahead of a major change in marinefuel standards in 2020.
Global growth in oil demand slowed in the first half of theyear to around 1 million barrels per day but has slightlyrecovered in the second half, CFO Gilvary told Reuters.
Despite the higher profit, BP's debts rose in the first halfof the year to $46.5 billion from $38.7 billion the previousyear, mostly as a result of the BHP acquisition.
Gearing, the ratio between debt and BP's market value, roseto 31% compared with 27.5%.
Shell reports results on Thursday, while ExxonMobil and Chevron are scheduled for Friday.
STRAIT OF HORMUZ
BP has not taken any of its oil tankers through the Straitof Hormuz since a July 10 attempt by Iran to seize one of itsvessels, Gilvary said.
Gilvary added that the company had no plans to take any ofits tankers through the world's most important waterway for oilshipments, but was moving oil out of the region using charteredtankers.
Tensions spiked between Iran and Britain this month whenIranian commandos seized a British-flagged tanker.
(Additional reporting by Noor Zainab Hussain in Bengaluru,Josephine Mason in LondonEditing by Saumyadeb Chakrabarty, Dale Hudson and AlexanderSmith)
