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* Spending on new fields seen peaking
* Costs driving worry over capacity to pay dividend
* Analysts grumble about lagging stock prices
By Andrew Callus and Anna Driver
LONDON/HOUSTON, Oct 31 (Reuters) - Oil industry shareholdersconcerned about poor returns and costly projects urgedexecutives from Big Oil this week to return cash to shareholders- and at least one of the world's top five petroleum companiesfully acquiesced.
As they posted third-quarter results, the leading oilcompanies vowed to control spending and to put cash in thepockets of investors through asset sales, share buybacks ordividends while analysts grumbled about lagging stock prices.
BP Plc, the smallest of the group of five, was themost aggressive. It raised its dividend, cut back capitalspending plans, and ramped up its asset sales target to $10billion over the next two years from between $4 billion and $6billion previously - cash that will also go back toshareholders.
Its shares have risen 6.8 percent since Monday's close.
"At the moment the market likes oil companies that cut backon expenditure and pay out big dividends," said MalcolmGraham-Wood, analyst and adviser at VSA Capital.
The other companies - Exxon Mobil Corp, Chevron Corp, Royal Dutch Shell Plc and Total SA -acknowledged spending heavily to prevent output from falling butstopped short of major changes.
Exxon indicated its capital expenditures may subside nextyear after planned spending of $41 billion this year. It said ithas returned $5.8 billion to shareholders in the third quarterthrough dividends and share repurchases, but did not raise itsdividend.
The top five have all badly underperformed the global MSCIWorld index this year, which is up 20.6 percentfor the year to date, even with share buybacks already underway.
The weakest performers are Exxon, whose shares have managedjust a 2.6 percent rise, and Shell, down 5.8 percent.
Doug Leggate of Bank of America Merrill Lynch said onExxon's results call that its "share price has frankly beenpretty awful."
David Rosenthal, Exxon's vice president of investorrelations, responded by saying, "we are executing on the thingsthat we can control."
Spurred on by historically high oil prices in the past fewyears, integrated oil companies have increased exploration workin areas once deemed too risky.
France's Total, which embarked on a so-called high-risk,high-reward exploration strategy to find massive fields in areassuch as the southern African seas, conceded last month it wouldstart what CEO Christophe de Margerie called a "soft landing" incapital expenditure.
Total said it would pay a quarterly dividend of 0.59 europer share, unchanged from the previous quarter.
Asked why the group did not raise its dividend this quarterlike BP, Total said: "It's not because there are expectationsthat we have to dance to the market's tune."
WAVE OF ACTIVISM IN INDUSTRY
Thomson Reuters data shows there have been pushes forshakeups at 15 different energy companies in the first 10 monthsof this year - on pace for the industry's highest number ofactivist situations in the past decade.
Targeted companies have included Chesapeake Energy Corp, Hess Corp and Transocean Ltd.
Members of Big Oil have not been hit by the wave ofshareholder activism that has struck the energy industry thisyear, but executives are aware of the pressure.
Shell's finance director, Simon Henry, warned about therisks of short-term thinking that is gripping the industry -even though Shell is itself buying back $5 billion worth ofstock this year and paying out $11 billion in dividends afterraising its payout at the end of 2012.
"Those who are cutting capex are being very highly rewarded... 10-15 years ago the entire industry cut capex, obsessed byreturns and with the market egging them on, but cuttinginvestment is one of the reasons we've got a $110 oil price," hetold reporters after third-quarter results.
Shell, which also said capex would peak this year, was amongthe cutters last time around as the industry retrenched 10-15years ago, sacking engineers and pulling back from investmentsto an extent that made it hard to respond to an upturn.
The company ended that period with a damaging reservesdowngrade in 2004 from which it took years to recover.
"What you're seeing is more of an olive branch being putforward by names like BP and Total than Shell in recentquarters," said Nomura analyst Theepan Jothilingam, "but oneneeds to be careful about being positioned for the long term interms of the right balance between investing for the future andcash return today."
Reduced spending by the top companies could be bad news forthe service firms that provide rigs and help engineer newprojects, although French services group Technip onThursday brushed aside those concerns.
"I think this discipline will be applied to investments (inthe downstream), and that it remains still very positive forinvestments in exploration and production," said Chief ExecutiveThierry Pilenko.
The third-quarter results themselves were a mixed bag, withBP and Total beating analysts'expectations, Shell missing, and Exxon landingin line. Weak refining margins - well flagged bythe industry - reduced profit across the board compared with ayear earlier. Chevron's results are due out on Friday.
