CARACAS – Venezuela’s government is cutting spending to “adjust the economy’s engines” and deal with the effects of the global economic crisis, the oil-rich nation’s energy minister said.

There was “excessive spending” in recent years, when oil prices were high, Energy Minister Rafael Ramirez said.

“We have to adjust to a situation that does not allow for waste, spending that is not a priority,” Ramirez said, referring to state-owned oil giant Petroleos de Venezuela SA, or PDVSA, which he heads.

Government officials are monitoring the international situation to be able to “work under (different) potential scenarios” and make decisions “without pressure,” the energy minister said.

“It’s clear that we can’t have the same level of spending as last year,” he acknowledged.

Ramirez said, however, that thanks to savings achieved when oil prices were high, the level of investment and development plans for 2009-2013, totaling $125 billion, could be maintained.

The “cushion” of resources is so solid that “we can withstand and keep ourselves going in any situation,” and “we can work (even with) zero oil income,” the energy minister said.

Venezuela, among other reserves, has $57 billion in the Monetary Stabilization Fund, Ramirez said.

As it cuts spending, according to the energy minister, Caracas is also expecting a recovery in oil prices.

Venezuela is a founding member of the Organization of Petroleum Exporting Countries, or OPEC, and has reduced its production to meet the output cuts agreed to by the cartel’s members in a bid to pump up crude prices.

On Jan. 1, Venezuela slashed its production by 189,000 barrels per day (bpd) in compliance with the production quotas adopted by OPEC in Algeria last December.

That cut came on top of others already implemented by OPEC in September and October, pushing the total crude taken off the market to 364,000 bpd.

Following the production cuts, Venezuela’s daily output is 3.01 million bpd, PDVSA said.

So far this year, the average price of Venezuelan crude has been $36 per barrel, well below the $60 price projected in the government’s 2009 budget.

Venezuela is a leading petroleum exporter and one of the key suppliers of crude to the United States.

The Andean nation’s socialist president, Hugo Chavez, has used the oil bonanza of recent years to fund ambitious social-welfare programs.