Mexico to give $4.2bn in aid to oil firm Pemex

Mexico City - Mexico's government on Wednesday announced plans to provide $4.2bn in liquidity to struggling state-run energy firm Pemex, which has posted huge losses amid crumbling production and oil prices.

The finance ministry said Pemex will receive a capital injection of $1.5bn and a credit facility of $2.7bn to cover pension costs this year.

The announcement follows the company's decision in February to cut $5.5bn from its budget, in large part by delaying costly projects.

"Pemex has historically been a fundamental institution for the Mexican economy and the nation's public finances," the finance ministry said in a statement.

"However, the unfavorable economic conditions that the hydrocarbon sector is going through at the international level and the depletion of various (oil) fields have weakened Pemex's financial situation," it said.