* Algerian and Azerbaijan parties go ahead

* Angola and Chevron cancelled events

* Spending continues even as home budgets are slashed

By Simon Falush

LONDON, Feb 4 (Reuters) - Azerbaijan and Algeria have been battered by a slump in oil prices, but their national energy companies will still lay on lavish hospitality next week in London when the industry gathers for its annual string of parties and networking events.

Both countries' state oil companies will be hosting parties at this year's International Petroleum (IP) Week event in London's upscale Mayfair and Knightsbridge districts. As far as the industry is concerned, they cannot afford not to.

While there are set to be harsh spending cuts at home, there is a perception that companies need to keep spending to ensure customer loyalty.

Algeria's Sonatrach's event at the luxury Mandarin Oriental overlooking Hyde Park is an exclusive, invitation-only affair.

The hotel, where a night in a standard double room will set guests back by nearly $800, was where Britain's Queen Elizabeth and her sister learned to dance, according to Britain's Daily Telegraph.

"International meetings are a good opportunity to share thoughts and talk about challenges, especially now as the energy sector is facing problems linked to investment and the oil price drop," said a Sonatrach official, who declined to be named.

The opulence may be jarring for many in Algeria, where the oil price drop led to a 2015 trade deficit of $13.71 billion after a $4.31 billion surplus in 2014.

Oil prices have dropped 70 percent over the last 18 months, and are hovering in sight of 13-year lows .

Azerbaijan's Socar tends to be more inclusive, this year welcoming a wide range of people with links to the oil industry at the upscale Marriott Grosvenor House hotel on Park Lane.

This comes as the Azeri state holds talks with the International Monetary Fund about possible financial aid, its credit rating is cut to junk, and the government expects inflation to hit double digits after the oil price slide.



SPEND MONEY TO MAKE MONEY

It's also business as usual for the trading houses responsible for much of the multi-billion daily trade in physical oil cargoes.

Glencore, whose share price has plunged due to worries about its debt burden, is hosting its annual bash at the Dorchester. For its oil trading division, and for other trading houses and refiners, there is something to celebrate.

While it has been stung by tumbling metal prices, Glencore's oil trading division has fared well, as it has been able to make healthy returns on the sharp moves in prices. The company did not respond to requests for comment.

Refiners, which have enjoyed strong margins as processed fuel prices fell more slowly than crude prices, will also be splashing out on expensive wining and dining at luxury venues.

Not everyone shares the view that laying on a party is money well spent, however.

Angolan oil company Sonangol, which was not available for comment, has cancelled its annual event, a far cry from previous years when its IP Week party has tended to be one of the most extravagant, often held at the Natural History Museum. Guests enjoyed a meal, an open bar and dancing into the small hours. Hired performers showed invitees the Kizomba, an Angolan version of the samba.

Some of those invited even brought their families to the events, with children racing through groups of oil traders among the museum's collection of dinosaur skeletons and other prehistoric flora and fauna.

Chevron has also decided not to hold its annual traders' lunch after reporting its first quarterly loss in more than 13 years on Friday.

"We engage with our traders in a variety of formal and informal settings throughout the year," Chevron spokeswoman Sally Jones said.

"This year we have chosen to pursue other options which are relationship-driven rather than event-driven, due to sensitivities surrounding the current cost environment." ($1 = 0.6869 pounds)

(Additional reporting by Libby George, Amanda Cooper and Dmitry Zhdannikov in London, and Hamid Ould Ahmed in Algiers; editing by Jan Harvey) ((amanda.cooper@thomsonreuters.com; +442075423424; Reuters Messaging: amanda.cooper.thomsonreuters.com@reuters.net))

Keywords: OIL IPWEEK/