LONDON (Reuters) - Norwegian oil company Statoil (>> Statoil ASA) vowed to protect dividend payments and said it was braced for a long period of depressed crude prices as it set out plans on Friday to slash costs and cut investment.

With oil prices falling by more than half since June, oil companies from BP (>> BP plc) to Chevron (>> Chevron Corporation) have been slashing costs, delaying or cancelling projects and reducing shareholder returns to save cash.

Statoil, which expanded from a North Sea producer to a global explorer during the past decade, will cut capital expenditure by a tenth this year, reducing exploration, spending on its U.S. shale prospects, and modification of mature fields.

But it is moving ahead with projects already sanctioned and will soon unveil plans for the Johan Sverdrup field, which could cost about $30 billion to fully develop, said Chief Executive Eldar Saetre, appointed to the job on Wednesday.

"We are able to handle volatility," Saetre said. "We will handle the low price environment ... but we must prepare for an extended period of low oil prices."

Statoil has taken a bigger hit from low oil prices than many other majors as it operates with some of the highest costs in the world, due to factors including pay rates for Norwegian workers and high safety standards. It also pays among the highest resource taxes in the world, last year put at over 71 percent.

But stable ownership under government control eases pressure for radical cuts and its 10 percent spending reduction for 2015 is about half of what other majors are taking, keeping much of Statoil’s growth prospects intact, analysts said.

Statoil said it aims to cut costs so its free cashflow can cover its dividend, set at a quarterly 1.8 crowns per share for the first three quarter of 2015, at an oil price of $100 per barrel by 2016 and $60 by 2018.

Analysts estimate the level stands at more than $110, even as oil prices languish below $60. So to cover the shortfall, Statoil may continue to sell assets after more than $10 billion of sales over the past five years.

It could also take on fresh borrowings, as its net debt to capital employed ratio was just 20 percent.

"Borrowing money is a natural part of the business," Saetre told Reuters. "We will manage this cycle at a net debt ratio below 30 percent, even in this below $60 environment."

Statoil said it would give up exploration in Angola and the Norwegian Arctic but will drill in Canada, Britain, Tanzania and Norway. It cut capital spending to $18 billion (12 billion pounds) this year from a planned $20 billion, reduced its production growth targets and took a net $2.4 billion of charges.

(Additional reporting by Terje Solsvik, Stine Jacobsen, Camilla Knudsen, Joachim Dagenborg and Ole Petter Skonnord; Editing by David Holmes)

By Balazs Koranyi

Stocks treated in this article : Chevron Corporation, Statoil ASA, BP plc