UPDATE 1-Mexico's Pemex backs Chicontepec, sees net debt up

* Pemex still sees Chicontepec as an important project

* Net debt seen rising in 2010 by up to $4 billion

* 2010 capital spending seen at $18-$20 billion (Adds quote, details on Chicontepec, 2010 capex, debt)

MEXICO CITY, Oct 30 (Reuters) - The troubled Chicontepec oil project remains an important part of the portfolio of Mexico's state oil company Pemex and any talk of scrapping it is "speculative," Pemex executives said on Friday.

Pemex [PEMX.UL] has come under heavy criticism from government officials due to the poor results at Chicontepec, where billions of dollars of investment have yielded little in terms of new production capacity.

However, Pemex's exploration and production chief Carlos Morales said the company would continue to work to improve its understanding of the area and the techniques needed to produce oil from Chicontepec's challenging rock formations.

"We will continue working on Chicontepec and we will continue doing the proper evaluations all of the time like we do with all of our projects," Morales said on a conference call with Pemex's debtholders.

Oil production at Chicontepec has been stalled at around 30,000 barrels per day, less than half the level Pemex expected it to produce this year, despite a major investment drive in the area.

NET DEBT TO RISE

Pemex expects its net debt to increase in 2010 as it borrows more money to continue its investment program, Chief Financial Officer Esteban Levin said on the call.

"Our net debt should increase between $3-$4 billion and not more than that," Levin said.

The company is still waiting for the Congress to approve its 2010 budget but capital spending should come in between $18 billion and $20 billion next year, Levin said, which would be in line with Pemex's existing forecasts.

Levin said the company was on track to fully allocate its capital budget this year. (Reporting by Robert Campbell; Editing by David Gregorio)