By Andrew Callus and Anna Driver LONDON/HOUSTON, Aug 1 Some of the western world's top oil companies abandoned output targets and missed profit forecasts on Thursday as they promised to clamp down on rising costs that hurt quarterly results. Costs for workers and materials are climbing as the industry scrambles to bring new wells and pipelines into operation. Companies owning refineries, from smaller independents to majors that have operations in all aspects of the oil business, also had profits squeezed by price shocks, maintenance work, and the rising cost of ethanol credits they often buy to comply with cleaner-fuel rules in the United States. In contrast, smaller U.S. producers, which tend to have more of their operations inside the United States and relatively more exposure to shale deposits, reported surging output. "It's a difficult time for the big integrateds. They are not seeing production growth, refining margins are deteriorating, and costs are going up. That's not a good combination," said Brian Youngberg, an oil analyst with Edward Jones in St Louis. Among a slew of quarterly results on Thursday, Royal Dutch Shell and Exxon Mobil disappointed Wall Street. The pair are two of the top three investor-controlled oil companies in the world. . The third, Chevron, is due to report results on Friday. Shell did what several of its peers did some time ago - abandon a promise to increase production growth so that it can meet its financial targets for cash flow growth and spending. The earnings reports followed a profit miss from industry No. 4, BP, on Tuesday. Only Total, Europe's No. 3 behind Shell and BP, impressed investors with its first quarterly rise in production in three years. Exxon, the world's largest publicly traded oil company reported a profit of $6.9 billion, down 57 percent from $15.9 billion a year earlier. Its oil and natural gas production fell 1.9 percent. The company is working to put new projects online to replace declining fields. SHALE OUTPUT LIFTS SMALLER PRODUCERS Among smaller U.S. firms, ConocoPhillips reported a better-than-expected profit and raised its full-year production forecast. It said output from the Eagle Ford shale field in Texas almost doubled in the second quarter to 121,000 barrels of oil equivalent per day. Conoco's combined oil and gas production in the Eagle Ford shale field, the Bakken shale field in North Dakota, and Permian Basin in Texas rose 47 percent. ConocoPhillips' net income fell 10 percent to $2.05 billion. Year-earlier earnings included $500 million from downstream operations before the company spun off Phillips 66 in May 2012. Apache Corp reported a higher quarterly profit, in line with Wall Street expectations. It sold its Gulf of Mexico shelf assets last month to focus on onshore production. It said its North American onshore liquids production rose 42 percent to 175,000 barrels per day in the latest quarter. "We expect Apache to have an improved asset mix that will drive more predictable production growth and strong returns," Chief Executive Steve Farris said in a statement. Chesapeake Energy Corp's new chief executive, Doug Lawler, said the company was reviewing its partnerships and assets as the second-largest U.S. natural gas provider tries to simplify its structure and improve financial discipline. The company, which experienced a severe liquidity crunch in 2012 after spending heavily for years to acquire drilling acreage, reported a better-than-expected quarterly profit as it produced more crude oil than Wall Street targeted. Its shares rose 7 percent to the highest level in more than a year. REFINERS HOPE FOR WIDER MARGINS Among refiners, Marathon Petroleum Corp and its peers are betting on new pipelines and higher volumes to win back margins that have shrunk as discounts on U.S. crude relative to the more expensive European benchmark have narrowed. That has erased a cost advantage that U.S. refiners had enjoyed for nearly three years. The spreads could widen again as extra pipeline capacity comes on stream to move Texas crude to the Gulf Coast. Higher U.S. oil output will also offset crude draws from the U.S. crude futures hub at Cushing, Oklahoma. U.S. refiners are also being hurt by the rising cost of ethanol credits, or Renewable Identification Numbers (RINs), which they are required to purchase in order to meet blending targets set by the U.S. Environmental Protection Agency.