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MEXICO CITY, Oct 31 (Reuters) - Mexico has made significant progress on hedging next year's expected crude oil output, a Mexican finance ministry official said on Friday.
Mexico's oil hedging program, which is designed to protect vital crude export revenues from market volatility, has been under pressure this year as international crude prices have sunk.
Mexico has historically relied on crude oil revenues to finance about a third of its federal budget.
Speculation has swirled about the timing and cost of the program this year, now that U.S. financial regulations require greater transparency for derivative trades.
A slump in the price of Mexico's main export blend to a four-year low this month is likely to push up the cost of the program, analysts said. But Mexico's top finance ministry economist Ernesto Revilla said the program was well underway.
"The federal government has made good progress," Revilla said at an event in Mexico City. "The oil price that Congress approved, of $79 a barrel, will be the price that will be hedged in its totality and there is no problem hedging that level of oil income in 2015," he said.
Revilla said the expected revenue from 2015 oil exports would be covered between oil hedges on the open market and the country's rainy day oil fund, which now has 50.5 billion pesos ($3.75 billion).
The oil hedge program cost the country at least $450 million for 2014. (1 US dollar = 13.4685 Mexican peso) (Reporting by Luis Rojas, Alexandra Alper and Michael O'Boyle)