UPDATE 2-Pride Intl says revenue to be hit if BP contract fails

* Says has contract with BP for two rigs

* Says dayrates for rigs may be affected

* Shares down 2 percent (adds details, analysts' comments; updates share movement)

By Krishna N. Das

BANGALORE, June 16 (Reuters) - Pride International Inc PDE.N said its profits could be dragged by any delay in employing its two drillships contracted to BP and if it fails to secure new contracts for the rigs due to the moratorium on drilling in the Gulf Of Mexico (GoM).

In a filing with the U.S. Securities and Exchange Commission, the offshore driller said it has five-year drilling contracts with BP Exploration & Production Inc (BP E&P), a unit of BP Plc (BP.L)(BP.N), for two of its drillships -- Deep Ocean Ascension and Deep Ocean Clarion.

On May 27, the U.S. government ordered a temporary halt to drilling at 33 deepwater exploration rigs and extended the ban on new drilling by six months as part of a broader response to the oil spill. [ID:nLDE64R00P]

"Due to the moratorium, BP E&P may be unable to commence drilling operations with the Deep Ocean Ascension in the U.S. Gulf of Mexico according to its original schedule," Pride said.

Deep Ocean Ascension was scheduled to commence its contract with BP around the third quarter, while Deep Ocean Clarion is undergoing commissioning in South Korea and is expected to be delivered in August 2010.

"We do not believe that the moratorium constitutes a force majeure event under the contract," Pride said.

Oppenheimer & Co analyst Scott Burk said the chances of BP declaring a force majeure was less and the payment involved to get out of the contract was as much as being in the contract.

"If BP E&P chose to exercise the contract's termination for convenience clause, BP E&P would be required to make a make-whole payment to us that approximates the present value of the cash margin that would have been earned over the life of the contract," Pride said.

Analysts said the two rigs that were to be employed by BP were estimated to contribute about 16 percent to 18 percent of Pride's total revenue once they went online.

DWINDLING DAYRATES

Houston, Texas-based Pride also said the deepwater drilling moratorium could affect its ability to get contracts for its fleet, as many rigs may move out of the GoM, reducing global dayrates.

The moratorium on new deepwater projects in the GoM will cut planned spending on exploration and production projects by about $1.6 billion from previous forecasts, according to a Barclays Capital survey of oil companies. [ID:nLDE65F1PC]

"I think a delay would probably be the likely result. At some level BP and Pride will try to find some middle ground perhaps," Stephens Inc analyst John keller said, adding that the moratorium will nevertheless incrementally pressure dayrates.

Analyst said Pride's rigs contracted with BP have the ability to earn good dayrates.

"These two rigs are some of the most capable rigs in the world. In the event that BP can not or chooses not to fulfill the contract, these rigs should be able to find work in regions outside the GoM," Stephens' Keller added.

The company, which operates 23 rigs, has a market presence in West Africa, Latin America, GoM, the Middle East and India.

Pride said it could pass on any increase in operating costs resulting from governmental regulations on licensing, taxation, equipment specifications and training requirements to its customers.

Shares of Pride, which have fallen about 17 percent since the GoM oil spill in late April, were down about 2 percent at $24.72 in early Wednesday morning trade on the New York Stock Exchange. (Reporting by Krishna N. Das in Bangalore; Editing by Roshni Menon, Prem Udayabhanu)