* BHP lifts quarterly iron ore output 7 pct
* Says will mine 247 million/t in FY 2016
* Shaves $200 million off petroleum spending (Adds cost cuts, petroleum output)
By James Regan
SYDNEY, Oct 21 (Reuters) - BHP Billiton boosted September quarter iron ore production by 7 percent on Wednesday, while maintaining full-year guidance and shrugging off growing concerns of a mounting global supply glut.
The mining giant also trimmed its planned capital spending in oil and gas, finding a further $200 million in cost savings as it tightens its belt during a commodities downturn driven by softer demand in China.
"BHP Billiton remains on track to meet full-year production and cost guidance after a solid operational performance this quarter," Chief Executive Andrew Mackenzie said in the report, ahead of the company's annual meeting in London on Thursday.
At its projected iron ore production rate, BHP will retain its world number three ranking in output and exports of the steel-making commodity, which accounts for more than half its revenue and profits.
Iron ore prices are down sharply from a high of nearly $200 a tonne in 2011 to $52.10 .IO62-CNI=SI. as of Wednesday. The price is forecast to drop to $50 over the next two years, according to a recent Reuters poll
Iron ore miners have been on a drive to lower their iron ore production costs to close to $10-$15 a tonne to keep ahead of the deterioration in pricing.
BHP, which posted quarterly output of 61 million tonnes, plans production of 247 million tonnes in the year to June 30, 2016, up 6 percent on a year earlier, ranking it behind Vale and Rio Tinto .
Vale this week said it produced a record 88.2 million tonnes of iron ore in the September quarter, just ahead of Rio Tinto, and would also continue to increase output.
In copper, BHP said quarterly production fell 3 percent to 377,000 tonnes as a strong operating performance was offset by the mining of less rich ores at its majority-owned Escondida mine in Chile.
However, its guidance for the 2016 financial year remained unchanged at 1. 5 million tonnes.
The petroleum division's output fell by 4 percent to 64.5 million barrels of oil equivalent, although it still expects meet a target of 237 million barrels for the year.
In the United States, the company has cut the number of its onshore drilling rigs from 10 to seven and is deferring some development activity.
"With lower oil prices, BHP still wants to get the barrels out the door, but at the lowest cost possible," said Stock Resource mining analyst Mark Gordon.
Despite the output slip, analysts said the petroleum division's quarterly output was better than expected. (Editing by Richard Pullin)