Mexican billionaire Carlos Slim said today that investing in onshore oil drilling is Mexico's best chance of shoring up slumping output as deep-sea crude discoveries lie years away.

Mexican oil output has fallen by nearly a quarter since 2004 as production tumbles at the aging Cantarell field in the shallow Gulf of Mexico.

The country is working on developing incentive contracts that could bring more foreign companies into deep-water exploration by the end of this year.

"Here on land there is still important availability (of resources) in some areas to give us the oil production that we need and we could compensate the fall at Cantarell," Slim said in a Reuters report.

Slim, whose Latin American telecoms empire has made him one of the world's richest men, added to his oil drilling holdings with a stake last year in US outfit Bronco Drilling, which has a contract to drill three wells for oil monopoly Pemex.

State-owned Pemex is betting billions of dollars on the onshore Chicontepec oil deposit near the Gulf of Mexico, but its complex geology means the oil is difficult to reach.

Speaking at an energy forum in Leon in central Mexico, Slim said he was focused on oil service contracts in Mexico but "at some point" he could seek investments abroad.

While Pemex believes there could be billions of barrels of oil in the Gulf of Mexico's deep waters, initial exploration has yet to confirm seismic tests and production is years away.

Slim said Mexico would need the help of international players with the proper expertise to exploit the Gulf's deeper waters.

Lawmakers have resisted attempts to open Pemex to foreign investment and many Mexicans are wary of private involvement in the cherished oil sector, which was nationalised in 1938.

"I think there is great potential in Mexico's deep-water but it is going to take time and a lot of investment," Slim said.

"The contracts have to be made with international companies."

Mexico passed an energy reform late last year to attract private sector expertise.

The first incentive-based contracts could be offered by the government by the end of the year.