Mexican state oil company Pemex, which has recently seen a rating downgrade, on Thursday signed an accord with Japan's investment agency with the expectation it may result in needed new funds.

Octavio Romero, CEO of Pemex, signed an accord with Nobumitsu Hayashi of the Japanese International Cooperation Bank that "strengthens the relationship between Pemex and the financial institution and provides the company the possibility to access in the future new financial opportunities," Pemex said.

Pemex started working with the Japanese bank in 1991 when it obtained a credit line for a refining project, and has received financing from the bank for several other projects since that time.

The most recent was in 2016 when Pemex sold $760 million in ten-year bonds in the Japanese capital market, reported Mexican news organization Energia a Debate. At that time, the investment bank guaranteed the full issue to help reduce financing costs.

On March 4, Standard and Poor's lowered the credit rating of Petroleos Mexicanos to "B-" from the previous "BB-" and downgraded the outlook of Pemex to negative from stable. However, the company's global investment grade rating, at "BBB+," was left unchanged.

S&P said that more government debt reduction efforts are needed while warning that the company's political exposure is high, according to a report. Pemex needed $20 billion to properly manage debt but the government would only allow under $4 billion, while total debt was nearly $106 billion, Financial World reported.

Pemex started the year with a working tour meeting with investors in New York City on January 9-10 saying it is "seeking to stabilize and increase its production platform."

The company has underinvested in recent years, when Mexico started an energy reform in which state participation in energy industry was going to be reduced in favor of private investment.

However, last year's election of President Andres Manuel Lopez Obrador brought uncertainty to whether plans to auction assets to private companies would continue. Prior to taking office December, Lopez Obrador had signaled he wanted Pemex to have a bigger stake in the country's energy industry. As president he has announced investment, including a new $8-billion state refinery, and interrupted plans for oil concessions.

Lopez Obrador may decide to restart bidding rounds for oil production and exploration concessions in six months depending on the investment private companies make in that time, Alfonso Romo, chief of the office of the presidency, said Thursday.

Pemex has long faced theft of fuel from its pipelines. In addition to that, a lack of investment caused fuel production to fall nearly 45 percent during the past six years. Mexico has seen imports surge to meet rising demand. Crude production has plunged in recent years.

During an October presentation to Mexico's congress, former oil company officials blamed the lack of investment in recent years on a decline in oil prices that started in late 2014.

Pemex raised $2 billion in October to cover planned investment and maintain liquidity through early 2019.

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