Venezuelan Energy and Oil Minister Rafael Ramirez vowed in an interview to slash production costs by 40 percent in hopes of making up for low oil prices that has put a hole in his country's budget. Cost-cutting would include re-negotiating deals with contractors that were reached when oil prices were at record-high 2008 levels, he said.
Venezuela, one of the world's top oil producers, has seen the price of its oil plunge from more than 130 dollars a barrel in mid-2008 to 36.8 dollars late last week. The government planned for oil at 60 dollars a barrel in its 2009 budget, officials said.
To make up for the dramatic downfall, Ramirez said in an interview with Radio Union late Monday that the state-owned oil concern Petroleos de Venezuela (PDVSA) would aim to cut production costs by 40 percent. Some of the savings, he said, will be obtained by re-negotiating oil service contracts.