Venezuela's President Hugo Chavez poses with Jamaica's Prime Minister Portia Simpson Miller after signing an agreement in Montego Bay, on August 14, to increase oil and fuel supplies to Jamaica by 12 per cent and create a joint venture under the world's No. 5 oil exporter's PetroCaribe initiative. - file

OPEC member Venezuela made a second cut in oil production this month, trimming a further 50,000 barrels per day (bpd) from its output on Sunday, in addition to a cut of the same size made on October 1, a senior official said on Wednesday.

Venezuela, a traditional price hawk in the Organisation of the Petroleum Exporting Countries, has been in the vanguard of a producers' push to stem a fall in world oil prices, which have dived more than 20 per cent in the past few months.

Dependent on venezuela

Jamaica's energy and energy-pushed sectors are heavily dependent on Venezuela, which provides the country with 21,000 bpd under the PetroCaribe agreement on concessionary terms allowing long-term payment for the crude at one per cent interest.

Luis Vierma, a vice-president of state oil company PDVSA, told Reuters in a telephone interview of the second cut on the eve of an OPEC meeting, where delegates are expected to hammer out details of a cartel cut of one million bpd aimed at steadying prices.

"This is now official," he said. "The cut is 100,000 barrels."

The move by Venezuela, which says its production is about 3.3 million bpd, could pressure other OPEC nations to make further cuts.

Sincor, jointly owned by Venezuela and French major Total SA and Norway's Statoil, has been told to participate in the cut, said a company official, who asked not to be named.

The official did not say if the joint venture had complied with the PDVSA order to trim 1.6 per cent, or 2,720 bpd, of its production in its crude upgrading operation in the Orinoco belt.

Although Vierma said PDVSA had begun its second cut, he added the company was still evaluating how best to balance out the cut between Venezuela's oil fields.

"It is a case now of deciding where to make the cuts so that it has the least impact on our budget," said Vierma, who is PDVSA's vice-president for exploration and production.

Representatives of the other three joint ventures in the Orinoco belt did not comment when asked if they were involved in reducing output. These other joint ventures involve ConocoPhillips, Chevron, ExxonMobil and BP Plc.

Particularly sensitive

Venezuela is particularly sensitive to a drop in prices because President Hugo Chavez is running for re-election on a platform of using strong oil income to fund education and health programmes for the majority poor.

The average price of the Venezuelan basket of crude and products fell below US$50 a barrel last week, compared with typical weekly averages above US$60 as recently as in August.

Venezuela says a fair price is US$50 a barrel for its basket of generally more sludgy products and US$55 a barrel for the OPEC basket overall.

The OPEC basket has been just below US$55 a barrel this week.

On world markets Wednesday, oil hovered below US$59 a barrel.