* Flash flooding, mudslides possible in Veracruz state
* Karl weakens to Category 1 hurricane
* Mexico oil industry spared big damage (Updates with storm weakening, no immediate reports of death)
By Robert Campbell
VERACRUZ, Mexico, Sept 17 (Reuters) - Hurricane Karl hit Mexico's central Gulf Coast on Friday, threatening to cause flash floods and mudslides but weakening as it moved ashore.
The storm appeared to have spared Mexican oil operations from major damage after sweeping through the Bay of Campeche, where Mexico produces more than two-thirds of its 2.55 million barrels per day of crude output.
There were no immediate reports of deaths or injuries although dozens of trees were knocked down in the port city of Veracruz.
Karl, projected to produce a storm surge of as much as 15 feet (4.5 metres) above normal tide levels, made landfall about 10 miles (15 km) north of Veracruz on Friday morning, the U.S. National Hurricane Center said.
Karl, which weakened from a Category 3 to Category 1 storm as it moved ashore, was blowing sustained winds of up to 90 miles per hour (150 kph).
The government ordered evacuations of low-lying areas in the important shipping port of Veracruz, which is also a popular destination for Mexican tourists.
More than 1,000 people were already in shelters, a state civil protection official told W Radio. Operations were suspended at Mexico's only nuclear power plant, which was in Karl's path, officials said.
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The southern part of Veracruz has already suffered extensive flooding this year and Veracruz's state governor, Fidel Herrera, warned of high winds and water.
Mexican authorities are experienced at evacuating people caught in the path of hurricanes and death tolls caused by hurricanes hitting Mexico are usually low.
MINOR WELLS SHUT
Mexico's state oil monopoly Pemex said it had closed down 14 minor wells and evacuated platforms in the Gulf, but the storm seemed to inflict no lasting damage to its operations. It did not say if the wells produced oil or natural gas.
The storm poured rain in coastal areas and raised winds strong enough to bend small palm trees in Veracruz.
People trying to walk against the wind were unable to advance during heavy gusts. Light poles buckled and power went out in part of the city. Before the center of the storm hit the coast, fishermen rushed to secure their small vessels.
"What a fright. I have never seen anything like this," said Ester Garza, a mother of three from central Mexico who was vacationing in Veracruz.
The U.S. storm center said Karl was expected to dissipate as it breaks up against Mexico's coastal mountains.
As much as 10 inches (25 cm) of rain could soak coastal communities, with more falling in interior mountain towns in coffee-producing Veracruz state.
Mexico's oil industry had to scramble on Thursday after Karl came across the Yucatan Peninsula into the Bay of Campeche. Two of Mexico's main oil exporting ports closed as Karl passed.
IGOR CHURNING IN ATLANTIC
Karl is just one storm that has formed in the Atlantic this hurricane season. Hurricane Igor, a Category 2 storm, swirled with sustained winds of 105 mph (165 kph) on a course that could take it to Bermuda by Sunday.
Hurricane Julia was located far east of Igor and posed no immediate threat to land.
Bermuda residents stocked up on supplies and secured their homes. The rocky island, a tiny British overseas territory that is a hub for the global insurance industry, is one of the world's most isolated yet densely populated islands.
The Bermuda government's emergency agency warned residents to prepare for a similar impact from Igor as the island experienced from the 2003 Hurricane Fabian, which killed four people and caused millions of dollars of damage.
Loading shopping bags onto his moped in downtown Hamilton, Matthew Lewis said he would board up the windows of his hillside home and remove any items from his garden that could become projectiles in hurricane-force wind.
"When you see a storm that large, you do tend to get a bit daunted, to say the least, because we've got nowhere to run to. So yeah, it does get a little bit scary," Lewis said. (Additional reporting by Michael O'Boyle and Luis Mena in Mexico City and Samantha Strangeways, Jane Ross and Katharine Jackson in Hamilton, Bermuda; Editing by Missy Ryan, Kieran Murray and Mohammad Zargham)