(Adds details on costs target, production)
MADRID, Nov 3 (Reuters) - Repsol on Thursday reported a higher-than-expected third-quarter profit and raised its 2016 cost-savings target by 300 million euros to 1.4 billion euros ($1.56 billion).
Europe's fifth biggest oil company, like many of its rivals, has had to cut spending to adapt to the slump in oil prices, which are down by half since June 2014. Royal Dutch Shell and BP, for example, had to rely on cost cuts to beat earnings expectations this week.
The Spanish company said lower spending on exploration helped to cushion a fall in production revenues. It reported a 28 million euro loss in its upstream operations versus a 395 million euro loss a year earlier.
Repsol said it had almost reached its previous costs savings target of 1.1 billion for 2016 by the third quarter.
The group said it had ramped up production at its Latin American fields Cardin IV in Venezuela and Sapinhoa in Brazil, offsetting maintenance stoppages at sites in Trinidad and Tobago, Vietnam and Malaysia.
In its downstream operations, which includes refining, earnings fell 42 percent in the July to September period from a year earlier.
Repsol's net current-cost-of-supplies profit - which oil and gas companies use to adjust for fluctuations in expenses - was 307 million euros in the period, up 93 percent from a year earlier and above the 296 million euros expected by analysts in a Reuters poll.
The company had reported its first annual loss for 2015 and cut its dividend, partly to protect its credit rating. It has also been shedding assets as well as cutting costs to help to shrink its large debt pile, which has been under scrutiny from credit ratings agencies.
Net debt fell to just under 10 billion euros at the end of September from 11.7 billion euros three months earlier after it sold a 10 percent stake in Gas Natural.
At 0832 GMT, Repsol shares were down 1.2 percent, leading losses on the Ibex, off 0.1 percent, and after JP Morgan downgraded its stance on the stock to "underweight" from "neutral."
$1 = 0.8997 euros Reporting by Jose Elias Rodriguez and Sarah White, Editing by Paul Day and Jane Merriman