* Eni in position to create surplus shareholder value
* Production hits all-time high in December
* Eni expects output to grow 3 pct this year
* Room for increasing shareholder returns - analyst (Recasts lead, adds CEO and CFO comments, analyst, shares)
MILAN, Feb 16 (Reuters) - Italian oil company Eni on Friday held out the promise of stronger returns for shareholders after its profits more than doubled in the fourth quarter and production hit a record high.
Like rivals in the oil industry, state-controlled Eni cut spending and costs after oil prices collapsed in 2014 and is now in a stronger position to reap the rewards of firmer oil prices and growing output.
Eni CEO Claudio Descalzi said the group saw excellent growth prospects for all of its businesses. "Should conditions be more favorable, (Eni) will be in a position to create a substantial surplus value for shareholders," he said.
After years of austerity, the world's biggest oil companies are all trying to woo investors with promises of growth and greater rewards.
Higher oil prices, production and cost savings allowed France's Total, for example, to raise dividends and announce plans to buy back shares.
Asked by analysts if there was room for fatter returns, Descalzi said the issue would be addressed in the company's business plan due out in March.
Mediobanca oil analyst Alessandro Pozzi said: "Cash flow is solid, breakeven is probably less than the $57 a barrel they gave so I think there's potentially room for better returns."
Eni said its adjusted net profit in the last three months of 2017 was 0.98 billion euros, well above an analyst consensus provided by the company of 0.57 billion euros.
Production at the company hit an all time high in December with 1.92 million barrels of oil equivalent per day and Eni said it expected output to rise 3 percent this year, lifted by its operations in Egypt, Angola, and Indonesia.
Production at its Zohr field in Egypt -- the biggest ever gas discovery in the Mediterranean -- began late last year and should add 70,000 boe/d for Eni this year, Descalzi said.
Eni is also looking this year to sell down its stakes in fields in Mexico and Indonesia, CFO Massimo Monduzzi said.
Eni, the world's most successful explorer in recent years after its super giant finds in Egypt and Mozambique, said it planned to spend 8 billion euros this year in line with 2017.
Eni shares were up 0.86 percent at 1620 GMT. (Reporting by Giulia Segreti and Stephen Jewkes; Editing by Edmund Blair and Jane Merriman)