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| - The president of Mexico -- the lone holdout in an global deal to cut crude production -- said Friday he has reached a deal with President Donald Trump to reduce oil output. Mexico will cut production by 100,000 barrels per day (bpd), President Andres Manuel Lopez Obrador said, adding that it was Trump who reached out to him. "Trump communicated with us," he told a news conference. The announcement came hours after OPEC revealed that major oil producers around the world -- except Mexico -- had agreed to cut output by 10 percent in a bid to support falling prices. Oil prices have been wallowing near two-decade lows due to the coronavirus pandemic and a price war between key players Saudi Arabia and Russia. The agreement will see output between May and June cut by 10 million bpd and another eight million from July to December, but it depends on Mexico's consent to take effect. Under the Organization of the Petroleum Exporting Countries deal, Mexico would have had to cut its output by 400,000 bpd. But Mexico resisted, and wanted the reduction limited to 100,000. Lopez Obrador said on Friday that Trump agreed to cut US production by an extra 250,000 bpd "as compensation" for Mexico. "They asked us for a reduction like that of Saudi Arabia, like that of Russia, of around 23 percent of production," said Lopez Obrador. "We resisted to the end because it cost us a lot of effort to raise production." In February, Mexico's state oil company Pemex reported losses of 346 billion pesos ($18.3 billion) for 2019, a 92 percent increase on the previous year's deficit. Production has fallen by 50 percent since 2004 when it was 3.4 million bpd. Leftist Loprez Obrador, who came to power in late 2018, said Mexican oil production fell for 14 years due to the energy reform policies of the previous government that opened up the sector to private enterprise. "They estimated that the energy reform would attract foreign investment. They gave out contracts and estimated that we'd produce three million barrels a day but the truth is we have a production of 1.7 million barrels," said the president. The Lopez Obrador government has already invested $10 billion in Pemex in a bid to prop up the finances of a company considered a bulwark of national sovereignty. While the government hasn't canceled the privatization initiative of the previous administration, it has stopped issuing new exploration contracts. yug/dw-bc/ft
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