State-owned oil giant Petroleos Mexicanos, or Pemex, said it asked regulators for permission to form a $556 million petrochemicals venture with Mexichem in an effort to leverage its production chain and supply the industrial plastics market.

The request was filed with the Federal Competition Commission, Mexico's antitrust regulator, Pemex said.

The commission is being asked for authorization to start a joint venture "integrating the chlorovinyls production chain" to create more value and increase the petrochemical industry's competitiveness in the global market, Pemex said.

The new company "will capitalize the strengths of Pemex Petroquimica" via a strategic alliance and the modernization of technology to increase operating efficiency, the oil company said.

The deal complies with laws regulating the petrochemical industry and will make the sector more viable, Pemex said.

The new company will help boost chlorovinyls production from 24,000 tons in the first year to 146,000 tons in year two and 217,000 tons by year three, with total output expected to eventually reach slightly more than 400,000 tons annually, achieving "an important improvement in Pemex's financial results," the oil company said.

Chlorovinyl is used to produce PVC (polyvinyl chloride), which is used in many products, including pipes, packaging materials, resins and paint, Pemex said.

Mexichem, one of Latin America's leading producers of chemicals and petrochemicals, exports its products to more than 50 countries.