* Q4 operating profit at 444 mln euros misses estimates
* Libyan output now returned to 70 pct of pre-war levels
* Business shifting to more lucrative E&P from refining
* 2013 dividend to be raised to 1.25 euros from 1.20
* Shares drop 3 percent (Adds details on Libya, Rosebank, refinery outages, shares)
By Georgina Prodhan
VIENNA, Feb 19 Austrian oil and gas group OMV said on Wednesday its fourth-quarter operating profit more than halved as production and sales in Libya dropped to almost nothing due to repeated disruption from oil-field protests and port blockades.
Production is now running at about 70 percent of pre-civil war levels, OMV said, and reaffirmed its 2014 group production target range of 320,000 to 340,000 barrels of oil equivalent per day (boe/d).
Libya accounted for about 10 percent of OMV's production before the 2011 uprising that toppled Muammar Gaddafi.
OMV said it lost one-third of its production in Libya last year, it produced almost nothing there in the fourth quarter and the security situation remained very hard to predict.
Shares in OMV fell 3 percent to 32.74 euros by 1337 GMT, lagging a weaker European oil and gas index.
Profits were also hit by refining margins close to record lows due to sluggish economic recovery and persistent overcapacity on European markets, and gas prices squeezed by regulatory reforms.
Quarterly operating profit - earnings before interest and tax adjusted for special items and inventory holding gains or losses (clean CCS EBIT) - fell 54 percent to 444 million euros ($611 million).
According to Thomson Reuters data, analysts had expected 461 million euros on average.
At its Exploration and Production (E&P) unit, operating profit - which accounts for more than half of OMV's total - fell 63 percent to 257 million euros, mainly due to lower sales from Libya and a New Zealand field shutting for refurbishment.
SHIFT TO E&P FROM REFINING
OMV is selling low-margin retail and refinery assets to finance heavy investments in more profitable E&P, which will account for about 3 billion of its planned 3.9 billion euros in capital expenditure this year.
The head of the E&P division, Jaap Huijskes, said a final investment decision on one of the company's major projects, the Rosebank North Sea field it is developing jointly with Chevron , would now be pushed back from this year to 2015.
He said OMV and Chevron were working intensively on reducing the project's costs, estimated by OMV last year at $10 billion, after Chevron said in November the development of the project was not economically attractive.
OMV proposed raising its 2013 dividend to 1.25 euros per share from 1.20 euros and said operating cash flow and planned divestments would support future dividends as well as capital spending plans.
The company said it was well placed after buying 2.65 billion euros' worth of assets from Norway's Statoil last year to balance risks in North Africa, and an interim deal to reduce the prices it pays Gazprom for gas.
OMV has historically agreed long-term gas-supply contracts with Gazprom that were indexed to rising oil prices while spot market gas prices have fallen. The two parties are working on a final agreement to take effect from April.
In its Refining and Marketing division, OMV's operating profit fell 37 percent to 92 million euros. Refining margins would remain under pressure this year, OMV said, and economic volatility in Turkey was challenging the profitability of its Petrol Ofisi Turkish filling stations and lubricants unit.
OMV added that it planned a 40-day shutdown of its Burghausen refinery in the fourth quarter of 2014 for a regular inspection, a 30-day shutdown of its Petrobrazi refinery in the second quarter for modernisation, and a 15-day shutdown of its Schwechat refinery in the second quarter for cleaning.
In Gas and Power, OMV raised its operating profit by 35 percent to 80 million euros thanks to the interim Gazprom deal, which was backdated to last April, as well as a similar long-term gas-supply contract renegotiation with Statoil.
OMV said it would continue negotiations with Gazprom to try to achieve full market-based pricing for the contracts. ($1 = 0.7272 euros) (Editing by Michael Shields and Louise Ireland)