The Mexican President, Ernesto Zedillo, and the Venezuelan President-elect, Hugo Chavez, have held emergency talks to discuss the collapse in oil prices.

Both countries depend heavily on oil revenue, and last week Venezuelan oil fell to its lowest level ever: just seven dollars a barrel.

Following talks in Mexico City, Mr Chavez repeated a promise to cut Venezuela's ouput to comply with reductions agreed with Mexico and Saudi Arabia earlier this year.

Last week, the three countries said they would extend these cuts to the end of 1999.The BBC's Latin America correspondent says the fall in revenue creates a critical problem for Mr Chavez, who came to power promising a new era of prosperity for his country.