* CFO says organic capex to fall to $24-25 bln in 2015-2017
* Group sticks to oil and gas output of 2.6 mln boepd in2015
* CFO says asset sale to be closer to $20 bln by 2014
By Andrew Callus and Michel Rose
LONDON/PARIS, Sept 23 (Reuters) - Total will starta "soft landing" next year to scale back heavy capital spendingwhile keeping long-term output targets and generating greatercash flow, the French oil major said, raising investor hopes ofhigher dividends.
Taking advantage of strong oil prices, now around $109 abarrel, Total has made the highest investments in itshistory over the past three years, drilling in areas that arehard and costly to explore.
"We've been through the past years developing a strategybased on relaunching an important investment programme. Weconsidered that Total was lacking reserves and production,"Chief Executive Christophe de Margerie said on Monday.
He told the group's annual investor day conference in Londonthat this had been reducing Total's free cash flow beforedivestments and added that the company needed to return to acapital spending policy more in line with its size.
"I call it a soft landing," De Margerie said.
The group's organic capital expenditure between 2015 and2017 will fall to $24-$25 billion per year, down from around $28billion in 2013, chief financial officer Patrick de LaChevardiere said.
Societe Generale analysts said in a note that Total'supstream capital spending of $23 billion in 2013 (and totalspending of $28 billion) represented an all-time high for thegroup and compared with exploration and production expenses of$4.7 billion 10 years ago, and $13 billion spent in 2008.
One reason behind the capital spending cut was a decision topull out of the long-delayed Voyageur Upgrader oil sandsprojects in Canada, CFO de La Chevardiere added.
Investors were eager to know how the higher net cash flowavailable, which its CFO said would stand at about $15 billionby 2017, would translate into dividends.
The group did not elaborate on where the dividend couldstand, saying the group would stick to a policy of "competitivereturns to shareholders".
Its policy has been to distribute half of its net adjustedprofits to shareholders, which would suggest higher dividendswill be possible as capital spending tapers down.
"In the long-term strategy of Total there is this wish tokeep our free cash at a sufficient level, to keep this strategyof competitive dividend for shareholders. At the same time wedon't intend to have a negative gearing just to have free cash,we still need to invest," De Margerie said.
Shares in the group, Europe's No. 2 integrated oil and gascompany by market value after Royal Dutch Shell, wereup 1.2 percent by 1015 GMT, outperforming a slight decline inthe European oil & gas sector.
PRODUCTION GROWTH
The group also confirmed an oil and gas production target of2.6 million barrels of oil equivalent per day (boepd) in 2015,and a potential for 3 million boepd in output in 2017.
Output slid by 2 percent to 2.3 million boepd last year, asTotal struggled with a gas leak at the Elgin field in the NorthSea, but the group posted its first quarterly rise in productionin three years earlier this year.
Total is counting on projects such as the giant Kashagan gasfield in Kazakhstan, which started production earlier thismonth, to meet its production target.
The Ekofisk South project in Norway and Laggan-Tormore offthe coast of the Shetland Islands in the North Sea, are also setto start producing next year.
In parallel, its exploration programme continues, with morethan 15-high-potential wells planned by the end of 2014, inplaces such as the Gulf of Mexico, Iraq, Brazil and Angola, thegroup said.
Its CFO said the group, which has a 2012-2014 asset saletarget of $15-20 billion, would be "closer to 20 billion than to15."
