MEXICO CITY, Aug 16 Reuters The Mexican government is likely to continue supporting heavily indebted state oil firm Pemex with about 15 billion per year, Fitch ratings agency said in an a report on Wednesday, adding these will at least cover international bond debt amortizations.

However, should the government substantively increase its support for Pemex, this would have a negative credit effect on the sovereign, Fitch added.

Pemex, whose financial debt surged to 110.5 billion by the second quarter of the year the most of any state energy firm worldwide received more than 3 billion from the government last month to help it meet its obligations.

Mexico President Andres Manuel Lopez Obrador has vowed to revive Pemex, which he inherited with a towering debt, but concerns have been growing since he took office in late 2018.

Under Lopez Obrador39;s presidency, Pemex bonds were stripped of a coveted investment grade rating, and two out of the three major ratings agencies rank the bonds speculative grade, or junk.

Reporting by Adriana Barrera and Raul Cortes Fernandez and Valentine Hilaire; Editing by Sarah Morland

Source Reuters