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(Adds comments from Moody's analyst)
MEXICO CITY, Sept 4 (Reuters) - Mexico's Pemex needs more government support for its profitable lines of business, Moody's analysts said Wednesday, underscoring persistent doubts about the strategy for the oil company that ratings agencies see as the top risk to the country's finances.
The government of Andres Manuel Lopez Obrador has vowed to do whatever it takes to revitalize state-owned Pemex. But the company's profitable exploration and production business still needs more funding, Moody's analyst Ariane Ortiz-Bollin said.
Speaking at an event in Mexico City, Ortiz-Bollin noted that investor confidence in Mexico has been affected by unpredictable policy decisions, one of a wave of investor concerns during Lopez Obrador's nine-month-old government.
"We believe that there is some lack of economic rationality in government policy decisions, in particular in relation to Pemex," she said.
Ortiz-Bollin pointed to the government's shifting comments on whether or not it will use its rainy-day fund to support Pemex as an example of "mixed messages" from officials.
It would be positive if the government were to reinstate competitive auctions for Pemex joint ventures, as well as the standalone auctions that allow private oil companies to bid on the rights to operate oil and gas projects on their own, said Pete Speer, a senior vice president at Moody's. Both types of auction have been suspended by Lopez Obrador.
While the leftist president has boosted Pemex's budget to find and exploit new oil and gas fields, his government has also dedicated massive new spending for its money-losing refining business in a bid to produce more fuel at home and wean the country off growing gasoline imports.
Credit rating agencies have consistently criticized Lopez Obrador's energy agenda.
Pemex, the world's most indebted oil company, is teetering on the edge of a second downgrade of its bonds to so-called junk status after Fitch did so in June, which would trigger forced selling of bonds worth billions of dollars.
Lopez Obrador has pushed spending cuts as a way to dedicate more resources to the ailing Mexican oil giant.
Additional support for Pemex will have a negative impact on the government's finances, Ortiz-Bollin said, signaling that Pemex's standalone credit profile is deteriorating due to declining output, a high level of debt and declining reserves, a major measure for the financial health of oil companies
Moody's expects the Mexican economy to grow by 0.5% this year and 1.5% in 2020, Ortiz-Bollin said. (Reporting by Stefanie Eschenbacher; Writing by Julia Love; Editing by David Alire Garcia, Marguerita Choy and Bernadette Baum)