CARACAS, Venezuela: Venezuela announced plans Friday to slash salaries and spending at its state oil company in a bid to save cash for refinery upgrades and other projects as oil income falls.

Oil Minister Rafael Ramirez said Petroleos de Venezuela SA will cut "excess" costs by $11 billion, about a tenth of last year's estimated spending, freezing wages for its 75,000 employees and reducing salaries for all top officials, including himself, by 20 percent.

He gave no other details on what areas of spending would be affected.

A company statement said the spending cuts will allow PDVSA to pursue $14 billion in investments in maintenance, upgrades, natural gas and other projects this year, even as world oil prices remain low.

"We're not going to hold back on our investment plan," Ramirez said.

"If we want to keep our company functioning and expanding, we have to work hard at administering our resources."

After years of financing many of President Hugo Chavez's broad social programs, PDVSA may finally be putting oil and gas developments above other financial obligations as falling oil prices slash income, said Caracas-based economist Pavel Gomez.

Venezuela relies on oil for 93 percent of exports, but world crude prices have tumbled 65 percent since their July peak.

The spending cuts are "probably a signal to generate credibility" among international investors at a time that the company may be pushed to issue new bonds, Gomez added.

After nationalizing four of Venezuela's biggest heavy crude projects, PDVSA last year invited foreign private companies to bid for minority stakes in seven exploration areas in the same Orinoco region.

Though nineteen companies, including Chevron Corp., Total SA, and Royal Dutch Shell Plc spent $2 million each for technical information about those deposits, none have publicly announced bids yet.

PDVSA spent $81.4 billion on maintenance, exploration, administration and other costs in the first nine months of last year, the latest period for which figures are available. Soaring oil prices, which peaked in July, gave PDVSA net income of $12.1 billion for that period. - AP

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