Image copyright Getty Images Image caption The state-owned Pemex company has been hit by a number of problems

For the first time in nearly 80 years, Mexico has opened up its oil industry to foreign investors, selling off 14 exploration blocks in the Gulf of Mexico.

However, only two of the blocks were sold in the auction, falling short of the government's expectations.

Bidders were expected to sign new contracts with the Mexican state to explore, produce and refine oil.

Mexico has fallen from the world's fifth biggest oil producer to tenth.

The BBC's Mexico correspondent Juan Paullier said it was a "historic" moment for the country, with private oil contracts being awarded for the first time since the industry was nationalised in 1938.

"Crumbling infrastructure, bureaucracy and corruption have affected Mexico's state-owned oil company Pemex, and production has declined," he added.

These auctions are part of the government's plan to encourage private investment and boost oil production.

Only nine companies took part in the auction, fewer than the 25 originally planned.