Oct. 20 (Bloomberg) -- Petroleos Mexicanos, the state-owned oil company, said monthly crude output fell to the lowest since November 1995 on decreased demand from U.S. refiners and as its largest field declined.

Production fell to 2.722 million barrels a day in September, a decline of 14 percent from a year ago, Mexico City- based Pemex, as the company is known, said today on its Web site. Pemex extracted 2.555 million barrels a day in November 1995.

Pemex shut wells that produced about 250,000 barrels of oil a day on Sept. 23 after U.S. refiners struggled to restart because of Hurricane Ike. The company resumed full output on Oct. 9. Output at Cantarell, the third-largest field in the world, fell 36 percent to 940,020 barrels a day, the third consecutive month below 1 million barrels.

Declining output is costing more than 275 billion pesos ($21.2 billion) in sales this year and threatening Mexico's budget, as 40 percent of the government's revenue comes from Pemex royalties.

Exports fell 37 percent to 1.06 million barrels a day. Pemex closed its export terminals for a prolonged period in September because of storms, damage to ship channels and repairs. Exports to the U.S. fell to 845,000 barrels a day, the lowest since October 1995. Pemex sells about 80 percent of its oil to the U.S.

Gas Output Rises

Mexico's crude exports sold for $92.56 a barrel in September, 37 percent more than a year earlier. Oil sales abroad totaled $2.9 billion in September, 13 percent less than a year earlier and the smallest revenue from foreign sales since April of last year.

Mexico is the third-largest supplier of crude to the U.S. Canada and Saudi Arabia are the first- and second-largest suppliers.

Natural gas output in September reached 7.02 billion cubic feet a day, a gain of 15 percent from a year ago, matching a record attained in June.

Pemex extracted 65 percent of its oil from Cantarell in March 2005, its peak. Cantarell now accounts for 35 percent of Pemex's total output.

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

Last Updated: October 20, 2008 15:32 EDT