* BP shares slide 8 pct after results miss forecasts
* BP reports 2015 loss of $6.5 bln, to cut 3,000 more jobs
* 2016 spending seen at lower end of $17-19 bln range (Updates throughout)
By Karolin Schaps and Ron Bousso
LONDON, Feb 2 (Reuters) - BP slumped to its biggestannual loss last year and announced thousands more job cuts onTuesday, showing that even one of the nimblest oil producers isstruggling in the worst market downturn in over a decade.
The British oil and gas company, which is still grapplingwith about $55 billion of costs from the oil spill in the Gulfof Mexico in 2010, said it would cut 7,000 jobs by the end of2017, or nearly 9 percent of its workforce.
BP said it lost $6.5 billion in 2015 and its fourth-quarterunderlying replacement cost profit, which is the company'sdefinition of net income, came in at $196 million, well belowanalyst expectations of $730 million.
BP shares fell as much as 8.5 percent and were 8.1 percentlower at 1136 GMT, the worst performer on the pan-EuropeanFTSEurofirst 300 index and on track for their biggestone-day fall since June 2010.
The company's 2015 loss shows that even its "shrink to grow"strategy adopted after the Macondo rig explosion in 2010, hailedas the best preparation for a weak oil market, was unable tobuffer the impact of the lowest oil prices since 2003.
"Should low oil prices prevail, they're a quarter or twoaway from having to cut the dividend, or divest some moreassets," said Jack Allardyce, analyst at Cenkos Securities.
Dividends are considered sacrosanct among most major oilcompanies but BP's weak results and outlook are likely to putpressure on a company that has had to increase borrowing. BPmaintained its 2015 dividend at 10 cents per share.
BP's results are the latest to show the extent large oilcompanies are struggling following a 70 percent slide in oilprices since the middle of 2014 that has forced them to cut tensof thousands of jobs and slash spending.
BP's 2015 annual loss was bigger than the overall loss of$4.9 billion it reported in 2010, even though it took a $17.2billion hit in the second quarter of that year after theexplosion in the Gulf of Mexico.
BP declined to comment when asked if the company's 2015 losswas the biggest on record.
Chevron, the second biggest U.S. producer behindExxon Mobil, reported its first quarterly loss last weekin more than 13 years. Royal Dutch Shell is expected toreport a near halving of profits.
BP's poor results came a day after credit ratings agencyStandard and Poor's placed the company on the path towards acredit downgrade and lowered Shell's rating.
BP took a bigger-than-expected hit at its upstream oil andgas production business and booked charges of $2.6 billion inthe fourth quarter because of low oil prices, including onfields in the Gulf of Mexico, the U.S. Utica shale acreage inOhio and Libya.
Analysts at Bernstein said warmer than expected weather in2015 probably meant that BP took a hit from some of its oil andgas hedging positions.
Benchmark Brent oil prices averaged $43 a barrel in thefourth quarter of 2015, down from $76 a year earlier. The poormarket backdrop is set to persist with Brent averaging about $33per barrel in 2016 so far.
COST CUTS
BP said if the current downturn persists for longer thananticipated, it would be able to reduce its costs further toallow its balance sheet to break even below $60 a barrel.
"Should current conditions persist for longer thananticipated, we expect that all the actions we are taking willcapture more deflation," Chief Financial Officer Brian Gilvarysaid in a statement.
The oil and gas sector is set to slash spending to itslowest in six years in 2016 to $522 billion, following a 22percent fall to $595 billion in 2015, according to analysts.
It would be the first time since 1986 that the industry hascut spending for two consecutive years.
BP said its capital spending came to $18.7 billion in 2015,down from a planned $24-$26 billion, and it expected 2016spending to be at the lower end of a $17-19 billion range.
BP reduced operating costs by $3.5 billion last year andsaid it expected savings to reach $7 billion by 2017.
It plans to cut 3,000 jobs in its downstream division by theend of 2017, on top of 4,000 cuts in its oil and gas productionbusiness announced last year.
"We are continuing to move rapidly to adapt and rebalance BPfor the changing environment," Chief Executive Bob Dudley saidin a statement.
Despite lower revenue from oil production, BP's output rose5.4 percent to 2.26 million barrels of oil equivalent per day.
Its refining and trading operations, benefiting from cheapfuel prices, once again offset losses in oil and gas production,although BP indicated that supply and trading weakened over thefourth quarter compared to a year earlier.
Like many of its peers, BP has tapped the debt market toplug the gap in income to cover spending and dividend payouts.BP said it intends to maintain its debt at current levels. Itsdebt-to-equity ratio stood at 21.6 percent at the end of 2015. (Editing by Jason Neely and David Clarke)
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