Venezuela (OILPRICE) - one of the staunchest supporters and promoters of OPEC’s oil production cuts - has said it would start reducing supply
by 95,000 bpd beginning January 1, complying with its commitment to the total cartel cuts.
OPEC’s much-hyped deal aimed at reducing global oversupply and ‘stabilizing’ oil prices stipulates that Venezuela cut its output to 1.971 million bpd from 2.067 million bpd. As part of the agreement, OPEC members and 11 non-OPEC producers pledged to cut production by almost 1.8 million bpd, of which 1.2 million bpd would come from OPEC and 558,000 bpd - from non-cartel producers, including Russia with a 300,000-bpd promised gradual cut in the first half this year.
Venezuela’s state-held company PDVSA, which made the announcement of the cuts by instruction from the oil ministry, said that it and its subsidiaries would begin to “implement a reduction of the volumes of the main crude oil sales contracts without prejudice to PDVSA’s international contractual commitments and in accordance with the terms and conditions of current contracts”.
PDVSA barely escaped bankruptcy two months ago and if OPEC’s cuts manage to lift oil prices, they would give a lifeline to the struggling oil company and Venezuela’s oil revenues, which are almost all of its foreign currency revenues.