Standard & Poor's (S&P) revised the outlook of Mexico's state-owned oil company Pemex to 'negative,' the global rating agency announced in a statement on Monday.

"We consider that the government's financial support, in order to restore credit fundamentals, falls well short of the company's multi-annual capital investment needs," the statement said.

"This negative outlook on Pemex mirrors that on the sovereign [Mexico] and reflects our view that the close relationship between the company and the sovereign will remain unchanged over the next couple of years," it added.

S&P revised Mexico's outlook to 'negative' on Friday, but affirmed the country's foreign currency rating at 'BBB+' and local currency rating at 'A-'.

The downward revision decision resulted from lower growth potential for the Mexican economy, the agency said, adding "a recent shift in government policy to reduce private-sector involvement in the energy sector ... could contribute to higher contingent liabilities for Mexico and lower its GDP growth prospects."

The rating agency said it estimates that Mexico's economy will expand by 1.8 percent in 2019, after it posted a growth rate of 2 percent in 2018.

S&P stressed that Pemex's core businesses are underperforming, and the Mexican government's plan to restore Pemex's credit fundamentals looks limited to address the firm's long-term business and financial risks.

It noted that Pemex faces a record-low production volume of only 1.62 million barrels per day as of January 2019, while Mexico's refining system is running at less than 40 percent of installed capacity.

"This data points to the weak condition of Pemex's asset base, which according to our estimates could need multi-annual capital investments of at least $20 billion per year to prevent further deterioration," S&P said.

By Ovunc Kutlu

Anadolu Agency

energy@aa.com.tr