* Q3 adjusted net profit up 13 pct, lags rival majors
* Oil and gas production off 1 pct on Libyan war
* Total says recent discoveries to fuel growth in coming years
* Investments at $13.5 bln at end-Sept, in line with FY goal
* Shares down 1 pct after one-month rally of 27 pct (Adds more details, comments, background, shares)
By Marie Maitre
PARIS, Oct 28 (Reuters) - French oil major Total posted higher quarterly earnings on Friday as stronger crude prices and improved profitability in its refining business helped make up for a fall in its worldwide oil and gas production.
Looking ahead, Total said it was optimistic despite a weaker economic environment as conditions for its core oil and gas business remained favourable and big oil and gas finds in Azerbaijan, French Guyana and Norway would fuel its growth.
"During the third quarter, our new bolder exploration strategy paid off with three major discoveries ... Over the coming quarters we will continue to pursue this strategy with an active and promising exploration programme," Chairman Christophe de Margerie said in a statement.
France's biggest company said third-quarter net income, excluding one-offs and unrealised gains or losses related to changes in the value of fuel inventories, was 2.8 billion euros ($4 billion).
In dollar terms, Total's underlying result was up 24 percent, lagging rivals Royal Dutch Shell (RDSa.L) and Exxon Mobil , which saw their third-quarter profits rise more than 40 percent.
The result also lagged a 48 percent jump in Brent crude to $113 a barrel in the quarter, explained by a one percent drop in the group's oil and gas production to 2.32 million barrels of oil equivalent per day (boepd) after disruptions in Libya.
Total said the production ramp-up at its Pazflor field in Angola's offshore, and a recovery in Libya should bolster fourth-quarter production, but this would be partly offset by maintenance works at gas facilities in Norway and Yemen.
Total shares were off 1.4 percent at 38.55 euros by 0740 GMT, weighed by a fall in Brent crude which pushed the European energy sector about 0.6 percent lower.
Traders said overall results were "bang in line" with market's expectations, and welcomed a 47 percent profit rise in Total's refining business.
The past half-decade has seen production fall at most big oil companies, with new field start-ups failing to match natural declines in portfolios.
Production disappointment has hit oil stocks, and Total has been punished by the market more harshly than its rivals -- falling 32 percent between March and September -- as it was seen as the major with the industry's best growth prospects.
But Total has rebounded 27 percent since a Sept 26 strategy update in which it raised its 2010-15 average output goal to 3 percent per year, instead of a previous target of 2 percent.
The rosier guidance is mainly due to a more aggressive exploration strategy.
Total has made over $10 billion of acquisitions in the past 18 months, expanding its geographical footprint beyond its historical heartland of Africa to Australia, Canada and Russia.
It also sharply increased investments, from $16 billion in 2010 to a projected $21 billion in 2011 and around $23 billion over the 2012-2014 period. On Friday, Total said investments, excluding acquisitions, reached $13.5 billion at the end of September, up from $11 billion at the same time last year. ($1 = 0.707 Euros) (Reporting By Marie Maitre; Editing by Astrid Wendlandt and Helen Massy-Beresford)