A leading Mexican politician says the State Petroleum Company Pemex is in crisis and urgently needs to undergo radical change and modernization. James Blears in Mexico City reports for VOA.

The call for change comes from Cuauhtemoc Cardenas, the founder of Mexico's left wing Party of Democratic Revolution, or PRD, which is the country's main political opposition party.

Pemex is Mexico's chief source of foreign revenue. Cardenas, speaking in an interview with VOA, said the government must develop a comprehensive national program to boost exploration and replenish reserves.

Mexico is marking the 69th anniversary of the nationalization of the nation's oil industry. President Felipe Calderon said Pemex will always belong "to all Mexicans."

Cardenas, who is an industrial engineer by training, says some of the country's oil revenues must be reinvested in the industry to boost production.

"We have to change the fiscal system which is applied to Pemex," he said. "And we would have to change I would say in general oil policies, so in the first place we could transform our exports, or part of our exports, in Mexico as petrochemicals and refined products."

Cardenas says an enormous amount of overdue work has to be done on Pemex's outdated equipment.

"We need to expand the capacity of refining," he continued. "We have to improve all of the pipes or the pipelines in Mexico, so we could modernize the transportation of oil products, and we have to implement a very different oil policy, which is part of a new economic policy in general."

Pemex's proven reserves have declined in recent years, and daily output fell in 2006 by about 2.3 percent to 3.2 million barrels a day. The company transfers almost all its profits to the government, accounting for more than a third of Mexico's federal revenue.

Energy Secretary Georgina Kessel was quoted by the Associated Press as saying Pemex must invest in new technology or its situation, as she puts it, "could become unsustainable."

Cardenas' Father Lazaro Cardenas who was President of Mexico, nationalized oil in 1938, taking it away from mostly US and British multinational companies.

His son, Cuauhtemoc, says, if he were still alive, his father would be dismayed by Pemex's woeful financial condition.