The storm spared major tourist areas on the Yucatan coast from a direct hit, landing in sparsely-populated low-lying jungle late Tuesday. It hit land as a Category 1 hurricane, the lowest on the five-step Saffir-Simpson scale, and was downgraded to a tropical storm early on Wednesday.

The storm was expected to emerge over the Bay of Campeche this afternoon, where state oil company Pemex has port facilities and offshore platforms, and it could regain strength and become a hurricane again by Thursday, the U.S. National Hurricane Center in Miami said in its 8:00 a.m. EDT (1200 GMT) advisory.

A Pemex spokesperson said all the company's facilities in the area were operating normally. They include the Minatitlan and Maderon refineries in the Bay of Campeche, which put out 375,000 barrels per day (bpd) between them, or just under a third of Mexico's total refining capacity, and oil fields Cantarell and Ku Maloob Zaap.

Ernesto's top sustained wind speed fell to 60 miles per hour (95 km per hour) and it was moving 15 mph (24 kph) to the west over the southern portion of the Yucatan peninsula.

The storm landed on the Mexican coast near the town of Mahahual, about 20 miles (65 km) north of Chetumal, where nearly 200 people were evacuated to shelters but no deaths or serious damage were reported, according to local civil protection officials.

About 2,300 people were evacuated from Chetumal up the coast to Tulum in an area known for its scuba diving and eco-tourism attractions.

Cancun, some 230 miles (380 km) to the north of Chetumal, was devastated in 2005 by Hurricane Wilma, the most intense storm ever recorded in the Atlantic, but it only saw heavy rains from Ernesto.

Carlos Morales, director of Pemex Production and Exploration, told Reuters on Thursday that oil production has not been affected at all by the hurricane.

Hurricane warnings were in effect along the coast of Veracruz state, on the Gulf of Mexico.

Heavy rain hit northern Honduras early Tuesday but there were no reports of damage.

Rainfall of 4 to 8 inches (10 to 20 cm), and possibly 12 inches (30 cm) in some areas, was expected over Belize and northern Guatemala.

August and September are usually the most active months of the Atlantic-Caribbean hurricane season, which runs from June 1 to November 30.

(Additional reporting By Michael O'Boyle; Editing by Vicki Allen)

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