CARACAS – State-owned oil giant Petroleos de Venezuela (PDVSA) said on Tuesday it would cut output under the main sales contracts as part of a strategy to meet the production quota set by the Organization of Petroleum Exporting Countries (OPEC) to reduce the supply of oil on the world market.
“Without violating its international contractual obligations, as of Jan. 1, 2017, PDVSA and its subsidiary companies will implement a reduction in the volumes of the principal crude sales contracts, all in accordance with the existing terms and conditions of current contracts,” the state-owned oil company said in a statement.
Venezuela is committed to complying with the production decisions made by OPEC and working for the “stability of the global petroleum industry,” PDVSA said.
Under the terms of the agreement reached on Nov. 30 by OPEC and non-OPEC oil producers, petroleum producers will cut output to 32.5 million barrels per day (bpd) as of Jan. 1.
The agreement calls for Venezuela to cut oil production by 95,000 bpd.
The South American country is one of the world’s largest oil producers, exporting about 2.5 million bpd, with most of its crude going to the United States and China.
The price of the basket of Venezuelan crude has plunged in the past two years, wiping out nearly 70 percent of the country’s revenues.