REGISTRATION RIGHTS AGREEMENT





                          Dated as of January 31, 2001





                                 By and Between





                            NABORS INDUSTRIES, INC.,





                                   as Issuer,





                                       and





                        MORGAN STANLEY & CO. INCORPORATED





                              as Initial Purchaser





               Zero Coupon Convertible Senior Debentures Due 2021









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                                TABLE OF CONTENTS



                                                                            Page

                                                                            ----



1    Definitions ...........................................................  1



2    Shelf Registration ....................................................  4



3    Liquidated Damages ....................................................  5



4    Registration Procedures ...............................................  6



5    Registration Expenses ................................................  11



6    Indemnification ......................................................  11



7    Rules 144 and 144A ...................................................  14



8    Underwritten Registrations ...........................................  15



9    Miscellaneous ........................................................  15







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                          REGISTRATION RIGHTS AGREEMENT





                                    PREAMBLE



         This Registration Rights Agreement (the "Agreement") is made as of

January 31, 2001 by and between NABORS INDUSTRIES, INC., a Delaware corporation

(the "Company") and MORGAN STANLEY & CO. INCORPORATED (the "Initial Purchaser").





                                    RECITALS



         This Agreement is entered into in connection with the Purchase

Agreement, dated January 31, 2001 (the "Purchase Agreement"), by and between the

Company and the Initial Purchaser, which provides for the sale by the Company to

the Initial Purchaser of $1,151,000,000 aggregate principal amount at maturity

of the Company's Zero Coupon Convertible Senior Debentures due 2021 (the "Firm

Debentures"), which are convertible into common stock of the Company, par value

$0.10 per share (the "Underlying Shares"), plus up to an additional $230,200,000

aggregate principal amount at maturity of debentures which the Initial Purchaser

may subsequently elect to purchase pursuant to the terms of the Purchase

Agreement (the "Additional Debentures" and together with the Firm Debentures,

the "Convertible Debentures"). The Convertible Debentures are being issued

pursuant to an indenture dated as of the date hereof (the "Indenture"), to be

entered into between the Company and Bank One, N.A., as trustee (the "Trustee")

on February 5, 2001.



         In order to induce the Initial Purchaser to enter into the Purchase

Agreement, the Company has agreed to provide the registration rights set forth

in this Agreement for the benefit of the Initial Purchaser and any subsequent

holder or holders of the Convertible Debentures or Underlying Shares as provided

herein. The execution and delivery of this Agreement is a condition to the

Initial Purchaser's obligation to purchase the Firm Debentures under the

Purchase Agreement.





                                    AGREEMENT



         The parties hereby agree as follows:



1.       Definitions



         As used in this Agreement, the following terms shall have the following

meanings:



         Additional Debentures: Has the meaning given such term in the Recitals.



         Agreement: Has the meaning given such term in the Preamble.



         Amount of Registrable Securities: (a) With respect to Convertible

Debentures constituting Registrable Securities, the aggregate principal amount

at maturity of all such Convertible Debentures outstanding, (b) with respect to

Underlying Shares constituting





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Registrable Securities, the aggregate number of such Underlying Shares

outstanding multiplied by the Conversion Rate (as defined in the Indenture) in

effect at the time of computing the Amount of Registrable Securities and (c)

with respect to combinations thereof, the sum of (a) and (b) for the relevant

Registrable Securities.



         Board:  The Board of Directors of the Company.



         Business Day: Any day that is not a Saturday, Sunday or a day on which

banking institutions in New York or Texas are authorized or

required by law to be closed.



         Closing Date:  February 5, 2001.



         Company:  Has the meaning given such term in the Preamble.



         Convertible Debentures: Has the meaning given such term in the

Recitals.



         Damages Payment Date:  See Section 3(c) hereof.



         Depositary: The Depository Trust Company until a successor is appointed

by the Company.



         Effectiveness Date:  The 180th day after the Closing Date.



         Effectiveness Period:  See Section 2(a) hereof.



         Exchange Act: The Securities Exchange Act of 1934, as amended, and the

rules and regulations of the SEC promulgated thereunder and any successor act,

rules and regulations.



         Filing Date:  The 90th day after the Closing Date.



         Holder: Any holder or owner of a beneficial interest in Registrable

Securities.



         Indemnified Holder:  See Section 6 hereof.



         Indemnified Person:  See Section 6 hereof.



         Indemnifying Person:  See Section 6 hereof.



         Indenture:  Has the meaning given such term in the Recitals.



         Initial Purchaser:  Has the meaning given such term in the Preamble.



         Initial Shelf Registration:  See Section 2(a) hereof.



         Inspectors:  See Section 4(n) hereof.



         Liquidated Damages:  See Section 3(a) hereof.



         NASD:  The National Association of Securities Dealers, Inc.





                                       2

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         Person: An individual, partnership, corporation, limited liability

company, unincorporated association, trust or joint venture, or a governmental

agency or political subdivision thereof.



         Prospectus: The prospectus included in any Registration Statement

(including, without limitation, any prospectus subject to completion and a

prospectus that includes any information previously omitted from a prospectus

filed as part of an effective registration statement in reliance upon Rule 430A

promulgated under the Securities Act), as amended or supplemented by any

prospectus supplement, and all other amendments and supplements to the

Prospectus, including post-effective amendments, and all material incorporated

by reference or deemed to be incorporated by reference in such Prospectus.

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