Jan.1 marks the start of the pact by the Organization of the Petroleum Exporting Countries and several non-OPEC producers to lower production by almost 1.8 million bpd. 

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"Without prejudicing its international contractual obligations, from Jan. 1 2017, (state oil company) PDVSA and/or its subsidiaries will implement a reduction in the volumes of its main crude sale contracts, all in conformity with existing terms and conditions," the Energy Ministry said.

                                   Venezuela, a price hawk within OPEC and one of the nations worst affected by a fall in crude revenue since mid-2014, currently produces just over 2.4 million barrels of crude and condensates per day, according to ministry data.

Oil Minister Eulogio Del Pino said the output deal should lead to a re-balancing of inventories, after which he forecast Brent crude would settle at a price range of around $60-$70 a barrel and Venezuela's crude basket between $45-$55 a barrel. 

Oil prices jumped 1.7 % on Tuesday, continuing a year-end rally with support from expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday. Brent rose 94 cents, or 1.7 %, to $56.10 a barrel.