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* BP announces more spending cuts, asset sales in comingyears
* Restructuring charges to rise by another $1 bln by end2016
* Shares rise after profits beat expectations (Updates with Dudley interview)
By Ron Bousso and Karolin Schaps
LONDON, Oct 27 (Reuters) - BP announced a third roundof spending cuts and more asset sales over the coming years onTuesday to tackle an extended period of low oil prices and helppay for its $54 billion U.S. oil spill settlement.
The British oil and gas company, which has already soldnearly $50 billion in assets since the deadly 2010 Gulf ofMexico spill, said it expected an additional $3-5 billion ofdivestments in 2016.
Oil companies have been aggressively cutting spending andoperating costs over the past year to deal with a sharp drop incashflow due to lower oil prices. The cuts have resulted inthousands of job losses and the scrapping of many new projects.
For the first time since 2010, BP was able to reportquarterly results knowing how large its oil spill liabilitiesare, removing a huge element of uncertainty.
"Now finally, BP can be more of a normal oil company and dowhat oil and gas companies do and I'm very excited about that,"Chief Executive Bob Dudley told Reuters in a telephoneinterview.
BP said that its capital spending, known as capex, for thisyear would now come in at close to $19 billion, down from aprevious estimate of under $20 billion, and capex would fall to$17-19 billion a year through to 2017. This is the third timethe company has reduced its 2015 capex target from an originalgoal of $24-$26 billion.
BP shares traded 1.1 percent higher at 1202 GMT after thebetter-than-expected third-quarter results, outperforming theEuropean oil and gas sector which was down 1.65 percent.
"Bob Dudley is saying...that BP can adapt to this toughperiod and rebalance cashflows to cover capex and dividends. Webelieve him. Today's results provide ample evidence of clearprogress on this path," said analysts at Bernstein who rate BPshares as 'outperform'.
Benchmark Brent oil prices averaged $50 a barrel in thethird quarter, down from $61.9 a barrel in the previous quarterand $101.9 a barrel a year earlier, according to BP.
The company also plans to increase restructuring costs byanother $1 billion by the end of 2016 to $2.5 billion.
It has aggressively reduced operating costs by $3 billionfor the first nine months of 2015, from a year earlier, and saidannual costs in 2017 would be $6 billion lower than in 2014.
BP's debt ratio rose to 20 percent from 15 percent a yearago, in large part to pay $20 billion in fines to resolve nearlyall claims from the Gulf of Mexico oil spill five years ago,which marked the largest corporate settlement of its kind inU.S. history.
The company maintained its dividend at 10 cents. It said itexpects to balance its cashflow by 2017 based on an oil price of$60 a barrel.
STRONG PRODUCTION
The oil producer reported better-than-expected third-quarterunderlying replacement cost profit, the company's definition ofnet income, of $1.8 billion, compared with analysts' consensusof $1.2 billion.
The results were supported once again by a big yearly gainin profits from the refining and trading division, known asdownstream, which rose to $2.3 billion in the third quarter from$1.5 billion a year ago.
Despite the steep drop in oil prices, BP ramped up oil andgas production in the third quarter by 4.4 percent from a yearearlier, producing 2.242 million barrels of oil equivalent aday. It said it expected production to rise again in the fourthquarter after seasonal maintenance ends.
The results were affected by a $756 million charge fornon-operating items. (Editing by Susan Fenton and Adrian Croft)
