Jan. 21 (Bloomberg) -- Petroleos Mexicanos, the state-owned oil company, said crude output fell 9.2 percent in 2008, the largest decline since World War II, as production at its biggest field dropped.

Production fell to 2.799 million barrels a day, from 3.083 million barrels a year earlier, Pemex, as the Mexico City-based company is known, said today in a statement. Pemex extracted 31 percent less crude last year from Cantarell, the world's third- largest deposit.

Pemex may have missed out on $20 billion of sales as plummeting production coincided with record crude oil prices last year, the Mexican Energy Ministry has said. Crude futures traded in New York have dropped more than $100 a barrel since touching a record $147.27 a barrel on July 11.

Sliding Pemex output risks reduced supply for the U.S., which gets more oil from Mexico than all countries except Canada and Saudi Arabia. Lower production also comes as Venezuelan President Hugo Chavez, who has threatened to end oil shipments to the U.S. and opposes U.S. influence in Latin America, holds a referendum that would end term limits on his presidency.

Mexico relies on Pemex for 40 percent of its budget. Falling sales may curb funding for a 570 billion-peso ($41 billion) a year infrastructure plan President Felipe Calderon is counting on to keep the country out of recession this year, Alejandro Schtulmann, head of research at Empra, a political-risk consulting firm in Mexico City, has said in an interview.

Refinery Risk

``Comparing production data from 1942, even if it is annual change in percent terms, with production in 2008 is frankly absurd,'' said Carlos Ramirez, spokesman for Pemex. ``From 1938 to 1979, Pemex was a small oil producer, and it wasn't until the early 80s, when production began at the giant field Cantarell, that Pemex became an important producer on a global scale.''

Pemex extracted 96,000 barrels a day in 1942, a 19 percent drop in output from a year earlier, according to data on the company's Web site.

Also at risk is a planned $10 billion refinery for Mexico. The country, which imports 40 percent of the gasoline consumed domestically, hasn't built one in more than 30 years. Pemex may begin looking for bids this year on the project.

Last year, Pemex extracted the least amount of oil since 1995, when it pumped 2.6 million barrels a day. Output at Cantarell fell to 1.010 million barrels a day in 2008, down from 1.471 million in 2007, Pemex said in today's report.

Cantarell Output

Declining pressure at Cantarell reduced output in the past five years. Pemex said output at Cantarell fell to 811,000 barrels a day in December, 36 percent less than a year earlier.

It was the sixth straight month Pemex extracted less than 1 million barrels a day from Cantarell. Pemex pumped a total 2.717 million barrels a day in December.

Cantarell accounted for 30 percent of the oil Pemex pumped in December, the lowest since October 1995 and less than half of the 65 percent at its peak in December 2003.

``Petroleos Mexicanos is aware of the challenge that the drop in Cantarell represents, and as result is developing projects with important potential,'' Ramirez said.

Cantarell, discovered in 1976, was the biggest oil find in the Americas until last year, when Brazil's Petroleo Brasileiro discovered the Tupi field. Pemex has estimated Cantarell had 17 billion barrels of crude oil equivalent in reserves when it was found, more than double Tupi's 8 billion barrels.

Crude exports fell 11 percent in December to 1.328 million barrels a day. Pemex sold its mix of export crude at $33.15 a barrel in December, 58 percent less than a year earlier.

Pemex made a record $43.3 billion in sales from exports last year, 14 percent more than in 2007. The company had annual revenue of $104 billion in 2007.

Pemex extracted a record 7.4 billion cubic feet of natural gas in December, 13 percent less than a year earlier.

To contact the reporter on this story: Andres R. Martinez in Mexico City at amartinez28@bloomberg.net;

Last Updated: January 21, 2009 23:52 EST