Mexico sees smaller oil windfall in 2007

MEXICO CITY, Oct 31 (Reuters) - Mexico expects a much smaller budget windfall from foreign oil sales this year, due to lower production levels and disruption to exports from bad weather, a Finance Ministry official said on Wednesday.

Mexico has booked billions of dollars in oil revenue surpluses in recent years as it sold crude above the price forecast in the national budget.

By the end of September, oil revenues were at 608 billion pesos ($55.6 billion), slightly below the 2007 budget forecast.

"Up to now, it's very small (the windfall)," the Finance Ministry's chief economist Miguel Messmacher told a news conference.

"The weather problems that have caused Pemex to have lower production and affected exports will limit the possibility of seeing additional revenues," he said.

By September of last year, the ministry was already sitting on an oil surplus of 54 billion pesos ($5.06 billion), as Mexican oil sold for an average of $53.04 per barrel, well above the $36.50/barrel estimate in Mexico's 2006 budget.

Mexican oil has sold at an average of $56.37 per barrel so far this year versus $49 set in the 2007 federal budget.

Mexico is the world's No. 9 oil exporter and a top-three supplier to the United States.

State-owned oil monopoly Pemex reported a 5.9 percent year-on-year drop in oil output in the third quarter, due largely to declining yields at its Cantarell oil field, and exports have been hit this year by a series of storms in the Gulf of Mexico.

Past oil revenue windfalls have been split between federal infrastructure projects and state-level budgets.