MEXICO CITY, Oct 14 (Reuters) - Moody's Investors Service on Tuesday assigned a negative outlook to Banamex, the Mexican unit of U.S. bank Citigroup, citing continuing uncertainty surrounding a fraud case involving oilfield services company Oceanografia.

The agency confirmed Banamex's C- standalone bank financial strength rating (BFSR), which was part of a review initiated in June, but revised the outlook to negative.

In affirming the C- standalone rating, Moody's said "management has taken measures to strengthen its local risk management functions following an internal investigation."

Citigroup said in February it uncovered at least $400 million in fraudulent loans that Banamex made to Oceanografia, a major services provider to state-run oil company Pemex. That figure has since increased to more than $500 million.

Moody's added that despite "the apparently limited initial impact of the Oceanografía incident on the bank's business... it is still unclear what its longer term consequences may be."

The ratings agency said it had taken into consideration the uncertainty that stems from the ongoing investigations in which sanctions have not been revealed, as well as a separate Banamex fraud allegation disclosed earlier in the day.

Citigroup said on Tuesday it had uncovered a $15 million fraud at its Mexican unit related to a security services company the bank operated.

"The outlook also considers the possibility of further damaging revelations that could lead to new charges to earnings or capital," said Moody's.

(Reporting by David Alire Garcia; Editing by Richard Borsuk)