* Total's net adjusted profit beats forecast
* Raises full-year production target
* Sector earnings hit by prolonged low oil prices (Recasts, adds quote after analyst call, sector rivals)
By Bate Felix
PARIS, Oct 29 (Reuters) - French oil and gas company Total's reported better than expected third-quarter profit onThursday after high margins in its European refining businessand increased production softened the blow of prolonged low oilprices.
A lower-for-longer outlook for oil prices took its heaviesttoll yet as oil companies reported a dramatic drop in income inthe third quarter, with some even falling to a loss.
Total, however, appeared to fare better than its peers, eventhough net adjusted profit tumbled by 23 percent year on year to$2.756 billion.
Analysts had expected $2.391 billion in net adjusted profit,according to Thomson Reuters I/B/E/S estimates.
The French group, Europe's biggest refiner, benefited fromrecord-high refining margins in Europe, which helped itsdownstream division to post an 82 percent profit jump.
"In a context where the oil price has fallen by 50 percentin one year, Total was able to demonstrate its resilience bylimiting to 23 percent the decrease in its third-quarteradjusted net income," Chief Executive Patrick Pouyanne said in astatement.
The company also made an upward revision to its productiongrowth target to more than 9 percent this year, from 8 percentpreviously, after a 10 percent jump in output in a third quarterboosted by new projects.
Total said that it was on track to beat its target of $1.2billion in cost reductions this year, while organic investmentsafter nine months were $16.6 billion, in line with the objectiveof $23 billion to $24 billion for 2015.
Chief Financial Officer Patrick de La Chevardiere toldanalysts that the results were also aided by an effective taxrate of 27 percent for the third quarter.
"In the upstream business, there was a favourable taxadjustment in Nigeria for about $100 million in the quarter thatreduced the effective rate to 34 percent," he said.
Total said it would pay an interim dividend of 0.61 euro pershare in the quarter.
"Our initial view is that this is another robust set ofresults from Total, emphasising resilience across many of itsbusinesses," said investment bank Jefferies, which has a "hold"rating on Total.
Rival Shell posted a third-quarter loss of $7.4 billion onThursday, hit by a massive $8.2 billion charge after halting itscontroversial exploration in Alaska's Arctic sea and a costlyoil sands project in Canada.
Total's shares were up 0.17 percent by 1530 GMT, slightlyoutperforming the European sector index.
(Editing by Andrew Callus and David Goodman)
