* Sees 2013 production in line with 2012
* Q2 results affected by Saipem, outages in Libya, Nigeria
* Eni sees significant improvement in H2
* Shares higher, outperform sector
By Stephen Jewkes
MILAN, Aug 1 (Reuters) - Italian oil major Eni cutits annual production target on Thursday and joined rival Shell in highlighting outages in Nigeria as a drag on secondquarter profit.
The world's No. 7 oil company by volume which was previouslytargeting output growth this year, said it now expected oil andgas production to be in line with 2012.
The company has also had supply disruptions in Libya and its43 percent-owned oil services arm Saipem has issuedtwo profit warnings.
Eni is the biggest foreign operator in Libya wheredisruption has led to a slump in Libyan oil exports of 70percent. But Eni said outages were a problem in Nigeria, wheretheft is a festering problem.
"Performance (in Q2) was affected by force majeure events inNigeria, particularly significant, and in Libya," Eni said.
A surge in oil thefts in Nigeria hit second-quarter profitsat Royal Dutch Shell on Thursday as it took a £700million hit.
Sources told Reuters on Wednesday that Shell would sell moreoil blocks in Nigeria in its latest divestment from Africa'sbiggest oil exporter.
The blocks are in joint ventures which include Eni. Enideclined to comment when asked if it could sell its share in thecase Shell sold. In previous deals, Eni has sold its shares.
"The disruptions in Libya and Nigeria were flagged as toowas Saipem. These results are probably a nadir for Eni and2014-2015 delivery prospects look good," Santander analyst JasonKenney said.
At 0835 GMT Eni shares were up 1.8 percent, outperformingthe European oil and gas index.
Net profit in the second quarter fell 55 percent to 580million euros ($770.15 million), below a Reuters analyst pollforecast of 683 million euros.
"We expect a significant improvement in our second-halfresults," Eni CEO Paolo Scaroni said, noting he was pleased withthe company's six production start-ups so far this year.
THINKING BIG
Eni, which has shifted focus to upstream development byselling non-core assets, has made a series of major discoveriesin recent years including a blockbuster gas discovery inMozambique which is expected to come on line in 2019.
But some analysts have questioned Eni's ability to deliversuch large-scale projects on budget and time, especially afterexperience in Kazakhstan where Kashagan, the world's largest oildevelopment, has been hit by huge cost overruns and delays.
Eni said on Thursday it expected production start-up atKashagan "in the coming weeks".
The state-controlled oil major, which produced 1.648 millionbarrels of oil equivalent per day in the second quarter, hasplans to bring 450,000 boe/d of new production on stream in2013-2014 from 15 projects.
Earlier on Thursday Eni, the biggest foreign oil and gasplayer in Africa, announced a major new discovery in Congo.
But flagging gas sales continue to weigh on profitability.
Eni, Russia's biggest gas client, lowered its gas salesforecast for the year on Thursday, saying they would be lowerthan in 2012. In first-quarter results it said it saw sales inline with last year's.
Eni is now renegotiating most of its long-term take-or-paygas contracts which have fixed prices that are above spot marketprices.
