Output at state-owned Petroleos Mexicanos -- Pemex -- has dropped to its lowest level since 1942. "Deep changes," Calderon said, are needed to finance Mexico's budget.

Calderon's comments in his state of the nation speech came on the heels of this week's announcement by oil giants BP and Brazil's state-controlled Petrobras of a massive oil discovery of up to 3 billion barrels in the Gulf of Mexico.

The discovery, said Energy Minister Georgina Kessel, is a "signal" to Mexico "that we can do much more progressive stuff."

"While Brazil has been increasing its production, our production has been falling," Kessel, who is also chairwoman of Pemex, told Bloomberg Thursday.

Mexico could follow the model of Petrobras, she said, as the country looks at "all" potential changes to its oil industry.

The Brazilian government allows Petrobras to partner with foreign companies for domestic and international exploration, as well as to sell concessions to operate oil blocks in Brazilian waters.

Pemex was formed in 1938 when Mexico expropriated the assets of American and British oil companies. Now it is the only company with permission from the government to explore, produce, refine and sell oil and its derivatives.

That stance softened somewhat last year when Mexico's Congress approved oil industry changes allowing Pemex to hire private and foreign companies for oil exploration and production, freeing up spending for further exploration.

"Mexico needs to find the means to access the technology and funds needed to make the most of our Gulf of Mexico resources," Kessel said. She hinted that joint ventures could be a possibility for the country's oil industry, depending on talks with congressmen.

Kessel has said that Pemex needs at least $30 billion in funding to "properly" finance exploration, Bloomberg reports.

The company may hold about 30 billion barrels of oil equivalent in deep waters. That's enough to supply the United States for about four years.

This year Pemex plans to spend a record $19.5 billion on exploration and production projects under waters beneath 1,641 feet as well as its onshore Chicontepec field, which stretches across Mexico's Puebla and Veracruz states, Bloomberg reports.

Kessel said Mexico is "evaluating" the $11.1 billion Chicontepec project after production failed to meet targets.

Chicontepec is expected to produce 60,000 barrels a day by the end of this year instead of the 72,000 barrels a day earlier forecasted.

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