<PAGE>
                                                                     EXHIBIT 5.1


                     [Letterhead of Appleby Spurling & Kemp]

                                                                    24 June 2002

Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados

Dear Sirs

NABORS INDUSTRIES LTD. (THE "COMPANY")

We have acted as legal counsel in Bermuda to the Company in connection with the
filing by the Company with the Securities and Exchange Commission, under the
Securities Act of 1933, as amended, of a registration statement on Form S-8 No.
333-45446-99 (the "Registration Statement") in relation to a total of 934,481
Common Shares of the Company of par value US$0.001 each (the "Common Shares")
which may be issued upon the exercise of options to acquire Common Shares
granted or to be granted under the Nabors Industries, Inc. 1997 Executive
Officers Incentive Stock Plan and the Nabors Industries, Inc. 1998 Chairman's
Executive Stock Plan (collectively, the "Plans").

For the purposes of this opinion we have examined and relied upon the documents
listed, and in some cases defined, in the Schedule to this opinion (the
"Documents") together with such other documentation, as we have considered
requisite to this opinion. Unless otherwise defined herein, capitalized terms
have the meanings assigned to them in the Registration Statement.

ASSUMPTIONS

In stating our opinion we have assumed:-

(a)  the authenticity, accuracy and completeness of all Documents submitted to
     us, and such other documents examined by us, as originals, and the
     conformity to authentic original Documents of all Documents submitted to
     us, and such other documents examined by us, as certified, conformed,
     notarised, faxed or photostatic copies;

(b)  that each of the Documents and other such documentation which was received
     by electronic means is complete, intact and in conformity with the
     transmission as sent;


<PAGE>
                                       2

(c)  the genuineness of all signatures on the Documents;

(d)  the authority, capacity and power of each of the persons signing the
     Documents (other than the Company);

(e)  that any representation, warranty or statement of fact or law, other than
     as to the laws of Bermuda, made in any of the Documents is true, accurate
     and complete;

(f)  that there are no provisions of the laws or regulations of any jurisdiction
     other than Bermuda which would be contravened by the execution or delivery
     of the Plans or which would have any implication in relation to the opinion
     expressed herein and that, in so far as any obligation under, or action to
     be taken under, the Plans is required to be performed or taken in any
     jurisdiction outside Bermuda such action or obligation will not be illegal
     by virtue of the laws of that jurisdiction;

(g)  that the Plans are in the proper legal form to be admissible in evidence
     and enforced in the courts of the State of Delaware and in accordance with
     the laws of the State of Delaware;

(h)  that any award issued under the Plans (the "Awards") will constitute the
     legal, valid and binding obligation of the recipient;

(i)  that each of the Company or any other party to the Plans is not carrying on
     investment business in or from within Bermuda under the provisions of the
     Investment Business Act 1998 as amended from time to time;

(j)  that the records which were the subject of the Company Search were complete
     and accurate at the time of such search and disclosed all information which
     is material for the purposes of this opinion and such information has not
     since the date of the Company Search been materially altered;

(k)  that the records which were the subject of the Litigation Search were
     complete and accurate at the time of such search and disclosed all
     information which is material for the purposes of this opinion and such
     information has not since the date of the Litigation Search been materially
     altered;

(l)  that the Resolutions are in full force and effect, have not been rescinded,
     either in whole or in part, and there is no matter affecting the authority
     of the Directors to effect entry by the Company into the Plans, or to
     perform their obligations under the Registration Statement not disclosed by
     the Constitutional Documents or the Resolutions, which would have any
     adverse implication in relation to the opinions expressed herein;

(m)  that each Director of the Company, when the Board of Directors adopted the
     Resolutions (which are the Directors' resolutions), discharged his
     fiduciary duty

<PAGE>
                                       3

     owed to the Company and acted honestly in good faith with a view to the
     best interests of the Company;

(n)  that each transaction to be entered into pursuant to the Plans is entered
     into in good faith with a view to the best interests of the Company;

(o)  that the Plans constitute legal, valid and binding obligations of the
     parties thereto, enforceable in accordance with its terms under the laws of
     the State of Delaware by which they are expressed to be governed and that
     the Company has entered into its obligations under the Plans in good faith
     for the purpose of carrying on its business and that, at the time it did
     so, there were reasonable grounds for believing that the transactions
     contemplated by the Plans would benefit the Company;

(p)  that the Plans constitute the legal, valid and binding obligations of the
     parties thereto, other than the Company, under the laws of their
     jurisdiction of incorporation or jurisdiction of formation;

(q)  that the Plans have been validly authorised, executed and delivered by each
     of the parties thereto, other than the Company, and the performance thereof
     is within the capacity and power of each such party thereto and that each
     such party to which the Company purportedly delivered the Plans has
     actually received and accepted delivery of the Plans;

(r)  that, at the time of issue by the Compensation Committee (the "Committee")
     of any Award under the Plans or of Common Shares pursuant to such Awards,
     the Committee has been duly constituted and remains a duly constituted
     committee of the Board of Directors of the Company having the necessary
     powers and authority to issue Awards and any Common Shares pursuant to the
     Plans;

(s)  that the approval of the issue of any Awards under the Plans are duly made
     at a duly convened and quorate meeting of the Committee in a manner
     complying with the terms of its constitution then in force within the
     authority then given to the Committee by the Board of Directors of the
     Company; and

(t)  that the issue price of the Common Shares issued pursuant to Awards issued
     under the Plans will not be less than the par value of such shares and the
     Company will have sufficient authorised share capital to effect the issue
     of such shares and will continue to hold the necessary consent of the
     Bermuda Monetary Authority.

OPINION

Based upon and subject to the foregoing and subject to the reservations set out
below and to any matters not disclosed to us, we are of the opinion that:-


<PAGE>

                                       4

(1)  The Company is an exempted company incorporated with limited liability and
     existing under the laws of Bermuda. The Company possesses the capacity to
     sue and be sued in its own name and is in good standing under the laws of
     Bermuda.

(2)  The Company has taken all necessary corporate action to authorise the
     delivery of the Registration Statement and the registration of the Shares
     pursuant to the Registration Statement.

(3)  The Company has taken all necessary corporate action to authorise the Plans
     and the issuance of the Common Shares.

(4)  When issued in accordance with the Resolutions and the Plans, the Common
     Shares will be duly and validly issued, fully paid, non-assessable shares
     of the Company.

(5)  The issue by the Company of the Shares will not violate:-

     (a)  any provision of any applicable law of Bermuda, nor, as far as can be
          ascertained from public record, any regulation or order of any
          governmental, judicial or public body or authority of or in Bermuda;

     (b)  the Memorandum of Association or Bye-laws of the Company.

(6)  Based solely upon the Company Search and the Litigation Search:

     (i)  no litigation, arbitration or administrative or other proceeding of or
          before any arbitrator or governmental authority of Bermuda is pending
          against or affecting the Company or against or affecting any of its
          properties, rights, revenues or assets; and

     (ii) no notice to the Registrar of Companies of the passing of a resolution
          of members or creditors to wind up or the appointment of a liquidator
          or receiver has been given. No petition to wind up the Company or
          application to reorganise its affairs pursuant to a Scheme of
          Arrangement or application for the appointment of a receiver has been
          filed with the Supreme Court.

(7)  The Company has received an assurance from the Ministry of Finance granting
     an exemption, until 28 March 2016, from the imposition of tax under any
     applicable Bermuda law computed on profits or income or computed on any
     capital asset, gain or appreciation, or any tax in the nature of estate
     duty or inheritance tax, provided that such exemption shall not prevent the
     application of any such tax or duty to such persons as are ordinarily
     resident in Bermuda
<PAGE>
                                       5

     and shall not prevent the application of any tax payable in accordance with
     the provisions of the Land Tax Act 1967 or otherwise payable in relation to
     land in Bermuda leased to the Company. There are, subject as otherwise
     provided in this opinion, no Bermuda taxes, stamp or documentary taxes,
     duties or similar charges now due, or which could in the future become due,
     in connection with the delivery, performance of the Plans or the
     transactions contemplated thereby and the Company is not required by any
     Bermuda law or regulation to make any deductions or withholdings in Bermuda
     from any payment it may make thereunder.

RESERVATIONS

We have the following reservations:-

(a)  The term "enforceable" as used in this opinion means that there is a way of
     ensuring that each party performs an agreement or that there are remedies
     available for breach.

(b)  We express no opinion as to the availability of equitable remedies such as
     specific performance or injunctive relief, or as to any matters, which are
     within the discretion of the courts of Bermuda in respect of any
     obligations of the Company as set out in the Plans. In particular, we
     express no opinion as to the enforceability of any present or future waiver
     of any provision of law (whether substantive or procedural) or of any right
     or remedy which might otherwise be available presently or in the future
     under the Plans.

(c)  Enforcement of the obligations of the Company under the Plans may be
     limited or affected by applicable laws from time to time in effect relating
     to bankruptcy, insolvency or liquidation or any other laws or other legal
     procedures affecting generally the enforcement of creditors' rights.

(d)  Enforcement of the obligations of the Company may be the subject of a
     statutory limitation of the time within which such proceedings may be
     brought.

(e)  We express no opinion as to any law other than Bermuda law and none of the
     opinions expressed herein relates to compliance with or matters governed by
     the laws of any jurisdiction except Bermuda. This opinion is limited to
     Bermuda law as applied by the Courts of Bermuda at the date hereof.

(f)  Where an obligation is to be performed in a jurisdiction other than
     Bermuda, the courts of Bermuda may refuse to enforce it to the extent that
     such performance would be illegal under the laws of, or contrary to public
     policy of, such other jurisdiction.

<PAGE>
                                       6

(g)  Where a person is vested with a discretion or may determine a matter in his
     or its opinion, such discretion may have to be exercised reasonably or such
     an opinion may have to be based on reasonable grounds.

(h)  A Bermuda court may refuse to give effect to any provisions of the Plans in
     respect of costs of unsuccessful litigation brought before the Bermuda
     court or where that court has itself made an order for costs.

(i)  Searches of the Register of Companies at the office of the Registrar of
     Companies and of the Supreme Court Causes Book at the Registry of the
     Supreme Court are not conclusive and it should be noted that the Register
     of Companies and the Supreme Court Causes Book do not reveal:

     (i)   whether an application to the Supreme Court for a winding up petition
           or for the appointment of a receiver or manager has been prepared but
           not yet been presented or has been presented but does not appear in
           the Causes Book at the date and time the Search is concluded;

     (ii)  whether any arbitration or administrative proceedings are pending or
           whether any proceedings are threatened, or whether any arbitrator has
           been appointed;

     (iii) details of matters which have been lodged for filing or registration
           which as a matter of general practice of the Registrar of Companies
           would have or should have been disclosed on the public file but have
           not actually been registered or to the extent that they have been
           registered have not been disclosed or do not appear in the public
           records at the date and time the search is concluded;

     (iv)  details of matters which should have been lodged for registration but
           have not been lodged for registration at the date the search is
           concluded; or

     (v)   whether a receiver or manager has been appointed privately pursuant
           to the provisions of a debenture or other security, unless notice of
           the fact has been entered in the Register of Charges in accordance
           with the provisions of the Companies Act 1981.

     Furthermore, in the absence of a statutorily defined system for the
     registration of charges created by companies incorporated outside Bermuda
     ("overseas companies") over their assets located in Bermuda, it is not
     possible to determine definitively from searches of the Register of Charges
     maintained by the Registrar of Companies in respect of such overseas
     companies what charges have been registered over any of their assets
     located in Bermuda or whether any one charge has priority over any other
     charge over such assets.


<PAGE>
                                       7

(j)  In order to issue this opinion we have carried out the Company Search as
     referred to in the Schedule to this opinion and have not enquired as to
     whether there has been any change since the date and time such search was
     completed.

(k)  In order to issue this opinion we have carried out the Litigation Search as
     referred to in the Schedule to this opinion and have not enquired as to
     whether there has been any change since the date and time such search was
     completed.

(l)  In paragraph (1) above, the term "good standing" means that the Company has
     received a Certificate of Compliance from the Registrar of Companies.

(m)  Any reference to this opinion to being "non-assessable" shall mean, in
     relation to fully-paid shares of the Company and subject to any contrary
     provision in any agreement in writing between the Company and the holder of
     shares, that no shareholder shall be obliged to contribute further amounts
     to the capital of the Company, either in order to complete payment for
     their shares, to satisfy claims of creditors of the Company, or otherwise;
     and no shareholder shall be bound by an alteration of the Memorandum of
     Association or Bye-laws of the Company after the date on which he became a
     shareholder, if and so far as the alteration requires him to take, or
     subscribe for additional shares, or in any way increase his liability to
     contribute to the share capital of, or otherwise to pay money to the
     Company.

(n)  Bermuda law does not recognise the concept of "treasury shares" and so such
     shares will not be available to satisfy the obligations of the Company to
     issue Common Shares under the Plans.

DISCLOSURE

This opinion is addressed to you in connection with the filing with the US
Securities and Exchange Commission of the Registration Statement and is not to
be made available to, or relied on by any other person or entity, or for any
other purpose, without our prior written consent. We consent to the filing of
this opinion as an exhibit to the Registration Statement by the Company.

This opinion is addressed to you solely for your benefit and is neither to be
transmitted to any other person, nor relied upon by any other person or for any
other purpose nor quoted or referred to in any public document nor filed with
any governmental agency or person, without our prior written consent, except as
may be required by law or regulatory authority. Further, this opinion speaks as
of its date and is strictly limited to the matters stated herein and we assume
no obligation to review or update this opinion if applicable laws or the
existing facts or circumstances should change.


Yours faithfully
/s/ APPLEBY SPURLING & KEMPE


<PAGE>

                                    SCHEDULE


1.   The entries and filings shown in respect of the Company on the file of the
     Company maintained in the Register of Companies at office of the Registrar
     of Companies in Hamilton, Bermuda, as revealed by a search completed at
     11:29 a.m. on 17 June, 2002 (the "Company Search").

2.   The entries and filings shown in respect of the Company in the Supreme
     Court Causes Book maintained at the Registry of the Supreme Court in
     Hamilton, Bermuda, as revealed by a search completed at 10:41 a.m. on
     17 June, 2002 in respect of the Company (the "Litigation Search").

     (The Company Search and the Litigation Search are together referred to as
     the "Searches").

3.   An electronic copy of the Registration Statement (excluding exhibits and
     excluding the documents incorporated by reference).

4.   An electronic copy of the Plans.

5.   Certified copies of the Certificate of Incorporation, Memorandum of
     Association and Bye-laws for the Company (collectively referred to as the
     "Constitutional Documents").

6.   Certified copies of the minutes of the Board of Directors of the Company
     effective 28 December, 2001, 11 June, 2002 and 20 June, 2002 (the
     "Resolutions").

7.   A certified copy of the "Foreign Exchange Letter", dated 11 December, 2001
     and a letter of permission dated 15 April 2002, issued by the Bermuda
     Monetary Authority, Hamilton Bermuda in relation to the Company.

8.   An Officers Certificate (the "Certificate") dated June 17, 2002 and signed
     by Geraldine Harris, Assistant Secretary of the Company confirming the
     authorised and issued capital of the Company as at that date and the
     maximum number of Common Shares to be issued pursuant to the Plans.

9.   A Certificate of Compliance, dated 17 June, 2002 issued by the Ministry of
     Finance in respect of the Company.

