* Q4 net loss 8.46 bln euros after impairments
* Q4 production rises 14 pct, 2016 output steady
* Zohr discovery to displace other projects
* Confirms 0.8 euro dividend for 2015 (Recasts lead, adds CEO comments, analyst, shares)
By Stephen Jewkes
MILAN, Feb 26 (Reuters) - Italian oil producer Eni said it will cut investments by 20 percent this year andfast-track lower-cost projects after impairments due to weak oilprices resulted in a heavy fourth-quarter loss.
Eni posted a net loss in the quarter of 8.46 billion euros($9.4 bln) on Friday after writing down 4.4 billion euros onupstream assets and booking charges on its stake in oil servicecompany Saipem and chemical unit Versalis.
On a standalone basis, the state-controlled company which isEurope's fourth-largest oil major by market capitalisation, saidits adjusted net loss was 0.2 billion euros for the quarter.
Production in the fourth quarter, however, jumped 14 percentto 1.88 million barrels per day, the highest level recorded byEni in the past five years.
The company, which increased its reserves by 48 percent inthe fourth quarter, expects production this year to be in linewith 2015, boosted by start-ups in Norway's Goliat field and thegiant Kashagan field in the Caspian Sea.
"They've done great with the drill bit, finding big volumereserves at the right time and are well placed for 2016-2017,"said Santander oil analyst Jason Kenney.
Eni's plans to slash capital spending helped send its sharesup 5.7 percent by 1540 GMT, outperforming a higher European oiland gas index.
Weaker oil prices driven by a global supply glut haveundermined revenues across the industry and prompted drasticcuts to investment as it sought to maintain dividends.
The world's largest oil company, ExxonMobil, thismonth posted its smallest quarterly profit in over a decade, while BP's 2015 loss was its biggest ever.
Since taking the helm in 2014, Eni CEO Claudio Descalzi hasrefocused the company on finding more oil and gas with apreference for projects that are lower cost and faster tomarket.
Earlier this month the group completed the sale of part ofits stake in Saipem to allow it to get around 6.7 billion eurosof gross debt off its balance sheet and help fund growth.
"This (2015) has been a crucial year... we now have a leanerand less leveraged company, positioned to overcome a longerdownturn," Descalzi told analysts in a conference call.
Last year Eni added 1.4 billion barrels of new resources,compared to a target of 0.5 billion, at a cost of just $0.7 perbarrel.
That was mainly due to its giant Zohr discovery, the largestnatural gas discovery ever made in Egypt and the MediterraneanSea, which is due to start up at the end of 2017.
"Zohr is entering and replacing other long-term projects,"Descalzi said. The group was delaying work in Iraq andVenezuela, and non-operated operations in Indonesia and Norway,he said.
Eni said earlier on Friday that it had drilled a new well inEgypt's Nile Delta which should soon be tied in to nearbyinfrastructure. ($1 = 0.9039 euros) (Reporting by Stephen Jewkes; Editing by Alexander Smith andSusan Fenton)
BP (BP.)
