Sept. 22 (Bloomberg) -- Petroleos Mexicanos, Mexico's state- owned oil company, may report that crude output fell for the 25th consecutive month in August, adding pressure on Congress to take up delayed legislation aimed at increasing production.

Pemex probably extracted less than 2.842 million barrels a day, the amount the company produced in August 2007, said David Shields, an independent energy analyst and publisher of Energia magazine. The problem for Mexico is exacerbated by a more than 25 percent decline in oil prices since peaks reached in July.

``That may create an urgency to approve the reform,'' Shields said in a telephone interview from Mexico City. ``Human beings act more rationally when they see they are in trouble.''

Congress has yet to vote on a bill President Felipe Calderon submitted in April that would give Pemex more power to hire private and foreign companies to explore, produce, refine and transport crude, freeing Pemex to devote more resources to finding oil. The vote was delayed after opposition lawmakers shut down Congress to protest the plan earlier this year, saying it would transfer wealth to foreign companies and elite businessmen.

Mexico, the third-largest supplier of crude to the U.S., relies on oil for 40 percent of its federal budget. Falling production has cost the country more than 275 billion pesos ($25.8 billion) in revenue this year, Energy Minister Georgina Kessel said last week.

Output at the Cantarell offshore field, the third-largest oil deposit in the world, fell 36 percent in July, its fastest rate in 12 years, as it lost pressure, making it more difficult and expensive to extract crude. Cantarell, which once accounted for 60 percent of Pemex output, now makes up 35 percent.

Pemex will report August output today.

Stocks, Bonds, Peso

Mexico's benchmark Bolsa index rose 0.4 percent last week to 25,701.03, snapping a streak of four weekly declines. Grupo Financiero Banorte, Mexico's largest publicly traded lender, climbed 5.4 percent after a U.S. government plan to improve the creditworthiness of banks boosted confidence in global financial institutions.

Yields on the government's benchmark 10 percent bond due in 2024 rose 4 basis points, or 0.04 percentage point, to 8.54 percent. The bond's price fell 0.38 centavo to 112.71 centavos per peso, according to Banco Santander SA.

The peso weakened to the lowest since late March last week, falling 0.6 percent to 10.6585 per dollar. The peso touched 10.8537, the lowest in almost eight months, on Sept. 18 as concern the global financial crisis would spread reduced demand for emerging market assets.

The following is a list of events in Mexico next week:

Event Date Forecast Pemex Output Report Sept. 22 --- Aggregate Supply and Demand for 2Q Sept. 22 +4.3% Retail Sales for July Sept. 23 +1.8% Bi-Weekly Inflation Sept. 24 +0.58% Trade Balance for August Sept. 24 -$1 billion

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

Last Updated: September 22, 2008 01:00 EDT