CORRECTED-Mexico's Pemex December oil output drops 12% from year earlier

Corrects to add Pemex in headline

MEXICO CITY, Jan 28 (Reuters) - Mexican state oil firm Pemex PEMX.UL said on Tuesday its production of liquid hydrocarbons in December dropped 12% from a year earlier, marking its lowest level all year and missing the government's target for a third month in a row.

Crude and condensate production averaged 1.62 million barrels per day (bpd) in December, down from its November output of 1.75 million bpd, and below the government's target of 1.8 million bpd.

Crude production hit 1.35 million bpd in December, down 13%, and marking the lowest level in more than 40 years.

Pemex, which holds a debt of nearly $100 million, as well as over $20 billion to its suppliers, has attributed the fall in its output to depletion across key fields and lack of major reserve finds.

Experts and sources, however, attribute some of the lower output to months of missed payments. The government has said it will gradually pay off its debt with suppliers by March.

While crude processing increased 6% to 875,271 bpd in December, refining also remained below the target of 1 million bpd across its seven local refineries.

This includes Pemex's new Olmeca refinery, a key project to wean Mexico off costly motor fuel imports. Last month, Olmeca processed 43,178 bpd out of a total capacity of 340,000 bpd.

Mexico's government has repeatedly said Olmeca, which cost more than double the initial $8 billion projections, should soon reach its peak production levels.

The seven refineries together produced 306,807 bpd of gasoline, 200,000 bpd of diesel and 181,405 bpd of fuel oil last month, higher than previous levels but still far below that needed to stop importing fuel.

Pemex said it exported 807,333 bpd of crude in December and imported 700,788 bpd of fuel and 733.2 billion cubic feet of natural gas.