HK shares drop 2.9 pct on U.S. recession worries

* Hang Seng Bank extends slide on debt exposure concerns

* Energy stocks beaten on oil price drop

* China Resource Logic jumps on expansion plans

* Hang Seng index falls 5.4 percent for week

(Updates to close)

By Parvathy Ullatil

HONG KONG, Oct 3 (Reuters) - Hong Kong shares fell 2.9 percent on Friday as lower oil prices hammered energy stocks while local lender Hang Seng Bank (0011.HK) extended its slide as investors fretted over its exposure to failed U.S. lender Washington Mutual WMPUQ.PK.

Shares in Hang Seng Bank sank 5.9 percent, adding to Thursday's nearly 9 percent fall.

But China Resources Logic (1193.HK) dodged the downdraft to soar 30 percent after it told Reuters it would buy 22 urban gas projects from its parent and seek to invest in an industry rival after it acquires China Resources Gas this month. [ID:nHKG361645]

The benchmark Hang Seng Index .HSI ended down 528.71 points at 17,682.40, taking losses for the week to 5.4 percent.

Mainboard turnover fell to HK$53.3 billion ($6.9 billion) from HK$69.7 billion on Thursday.

Investors stayed on the sidelines ahead of the U.S. House of Representatives vote on a revised $700 billion financial bailout package, which lawmakers had rejected on Monday.

Worries persisted that the rescue package would not do enough to prevent a recession in the world's largest economy after data showed that jobless claims rose to a seven-year high and factory orders declined to their lowest rate in two years.

"With the latest global financial market turmoil adding a negative shock to an already fragile environment, we believe there is no doubt that the Hong Kong economy will face increasing difficulties in coming quarters," said Qian Wang, analyst with JP Morgan.

"With the G3 economies expected to contract modestly and China's economy likely moderating to near-trend growth in coming quarters, we expect the Hong Kong economy to slide into a mild recession."

Energy and metal stocks tumbled on Friday after commodity prices fell overnight on fears the global economic slowdown will hurt demand.