* Seven of 10 majors to have reported Q3 results registeredlosses
* Shell posts $7.4 bln loss after heavy write-offs
* Italian major Eni reports $1 bln loss
* Sector challenged by lower-for-longer oil price outlook (New throughout, adds Conoco, Marathon Oil results, comments)
By Ron Bousso, Karolin Schaps and Anna Driver
LONDON/HOUSTON, Oct 29 (Reuters) - The oil sector isslipping into the red after years of fat profits as the steepslump in oil prices shows little sign of ending, with thisquarter shaping up to be the worst since the downturn started.
The world's top oil companies have struggled to cope withthe halving of oil prices since June 2014. They have cutspending repeatedly, made thousands of job cuts and scrappedprojects.
The lower-for-longer outlook for oil prices took itsheaviest toll yet in the third quarter as oil companies againreported a dramatic drop in income. Some saw results swing intothe loss column, and the industry had billions of dollars inimpairment charges.
"This downcycle poses significant challenges," Jeff Sheets,ConocoPhillips' chief financial officer, told investorson a conference call after the company posted a loss.
With 10 of the top 20 European and North American oil andgas producers having reported third-quarter results, seven haveposted losses.
These include Royal Dutch Shell, Italy's Eni and in North America Occidental Petroleum Corp,Anadarko Petroleum Corp, Hess Corp, Suncor and ConocoPhillips.
Shell posted a third-quarter loss of $7.4 billion onThursday, hit by a massive $8.2 billion charge after halting itsexploration in Alaska's Arctic sea and a costly oil sandsproject in Canada.
DOWNWARD REVISION
About half of Shell's charges reflected a downward revisionof the long-term oil and gas price outlook, Chief Executive Benvan Beurden said. Net profit excluding identified itemscollapsed to $1.8 billion from $5.85 billion a year ago.
Eni posted a net loss of $1 billion and France's Total had a sharp drop in profit, though its results werestronger than expected.
ConocoPhillips, the largest U.S. independent oil and gascompany, reported a quarterly loss of $1.1 billion and loweredits 2015 spending target 7 percent.
Smaller companies also showed signs of pain. Marathon OilCorp slashed its quarterly dividend 76 percent topreserve cash as it tries to weather the slump.
"The sector is rapidly moving into the red," Jefferies oiland gas equities analyst Jason Gammel said.
"It is slowly going to claw its way back into the blackthrough cost-reduction efforts, but that will take time. It willdepend on price movements, but it will take time to get allthese cost savings through the system."
Even after cost efficiencies and spending cuts, European oilcompanies on average will require an oil price of around $78 abarrel in 2016 to cover spending and dividend payments,according to Jefferies estimates before the latest results.
Analysts polled by Reuters expect Brent crude toaverage a much lower $58.60 a barrel in 2016.
Shell, which Jefferies says has the lowest cashflowbreakeven point at around $66 a barrel, said it would axe 1,000additional jobs after the 6,500 job cuts announced earlier thisyear.
MORE DEBT
Companies are also tapping the debt market, benefiting froma relatively low debt ratio that will allow them to coverspending and dividend payments that, except for Eni, haveremained unchanged.
Britain's BP increased its debt ratio to 20 percentfrom 15 percent a year ago after agreeing in July to pay $20billion in fines relating to the 2010 Gulf of Mexico oil spill.
Europe's majors have reduced 2015 spending programmes about15 percent to near $107 billion, and more cuts are seen nextyear.
On Tuesday Norway's Statoil posted worse thanexpected third-quarter core earnings and said it would slashcapital expenditure further.
Results have been bolstered somewhat by gains in refiningand trading segments, as lower prices lifted global fuel demand,though this boost is expected to fade with the seasonal winterdrop in demand.
BP, like Total, posted a sharp fall in profits but beatanalyst expectations, citing efficiencies, higher oil productionand strong refining results.
Shell and Eni shares were down 1.4 percent and 1.8 percentrespectively at 1422 GMT, with Total up by 0.4 percent. TheEuropean oil and gas index was largely flat.
In New York, shares of ConocoPhillips rose nearly 1 percent,or 44 cents, to $53.78 in midday trading. Chevron Corp and Exxon Mobil Corp will report on Friday.
(Additional reporting by Gwladys Fouche in Oslo and StephenJewkes in Milan; Editing by Terry Wade and David Gregorio)
