Proven reserves of Pemex shrank in 2013 as the company reported fewer reserve bookings, extensions and discoveries in both onshore and offshore developments in Mexico.
The state-led player said proven crude and liquids reserves dropped 3% from 11.4 billion barrels at year-end 2012 to 11.07 billion barrels at year-end 2013.
Gas reserves were off 3.5% in 2013, falling to 12,273 billion feet at year's end.
That made for a reserve-replacement ratio of 67.8% in 2013, what Pemex called a "significant decline" from the 2012 figure of 104.3%.
"The amount of crude oil, condensate and liquefiable hydrocarbon reserves added in 2013 was insufficient to offset the level of production in 2013," the company stated in a US regulatory filing.
In 2013 exploration activities added 101.8 million barrels of oil equivalent to reserves, but did not make up for lower levels of field development activity at the company's ATG project and less deep-water Gulf of Mexico exploration, Pemex said.
The reserves drop underscores Mexico's struggle with declining production at key fields and a hefty government tax take that hampers reinvestment in the sector.
Those were among the concerns that led the country's Congress last year to change its constitution and open the oil business to private competition for the first time in 75 years.
The shift is aimed at removing some of Pemex's tax and operations burden to allow for more development and production.
Pemex has been working to reverse the history of declines, however, and has budgeted its highest capital spend on exploration and production in five years for 2014.
The country's state-led energy company intends to devote a total of 286.7 million pesos ($22.3 billion) to total spending. Of that 230.8 billion pesos ($17.89 billion) are to be devoted to E&P, up 27% from the 2009 figure.
Constitutional changes passed last year, as well as secondary laws currently pending in the country's Congress, are expected to lighten Mexico's tax burden from federal coffers as well as open opportunities for partnerships.
The company has requested to keep most of its reserves in the process known as Round Zero, which will see energy regulators decide on which tracts Pemex can retain and which will be made available to outside bidders.
But Pemex acknowledged the road ahead for building reserves, particularly for shale and deep-water deposits, "will demand significant capital investments and will pose significant operational challenges".
"We cannot guarantee that we will have or will be able to obtain, in the time frame that we expect, sufficient resources necessary to exploit the reserves that the Mexican Government assigns to us as part of Round Zero, or that it may grant to us in the future," it said.