<SUBMISSION>
<ACCESSION-NUMBER>0001191332-04-000005
<TYPE>4
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20040220
<FILING-DATE>20040224
<ISSUER>
<COMPANY-DATA>
<CONFORMED-NAME>NABORS INDUSTRIES LTD
<CIK>0001163739
<ASSIGNED-SIC>1381
<IRS-NUMBER>980363970
<STATE-OF-INCORPORATION>D0
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<BUSINESS-ADDRESS>
<STREET1>2ND FLOOR INT'L TRADING CENTER
<STREET2>WARRENS, P.O. BOX 905E
<CITY>ST. MICHAEL BARBADOS
<STATE>D0
<ZIP>0000
<PHONE>2464219471
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2ND FLOOR INT'L TRADING CENTER
<STREET2>WARRENS, P.O. BOX 905E
<CITY>ST. MICHAEL BARBADOS
<STATE>D0
<ZIP>0000
</MAIL-ADDRESS>
</ISSUER>
<REPORTING-OWNER>
<OWNER-DATA>
<CONFORMED-NAME>ISENBERG EUGENE M
<CIK>0000904216
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</OWNER-DATA>
<FILING-VALUES>
<FORM-TYPE>4
<ACT>34
<FILE-NUMBER>000-49887
<FILM-NUMBER>04624848
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>NABORS CORPORATE SERVICES INC
<STREET2>515 W GREENS ROAD SUITE 1200
<CITY>HOUSTON
<STATE>TX
<ZIP>77067
<PHONE>2818740035
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>TWO NORTH BREAKERS ROW
<STREET2>APT 25 S
<CITY>PALM BEACH
<STATE>FL
<ZIP>33480
</MAIL-ADDRESS>
</REPORTING-OWNER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>c0000904216d20040224f4f.xml
<DESCRIPTION>PRIMARY DOCUMENT
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0201</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-02-20</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001163739</issuerCik>
        <issuerName>NABORS INDUSTRIES LTD</issuerName>
        <issuerTradingSymbol>NBR</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0000904216</rptOwnerCik>
            <rptOwnerName>ISENBERG EUGENE M</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O NABORS CORPORATE SERVICES</rptOwnerStreet1>
            <rptOwnerStreet2>515 WEST GREENS ROAD</rptOwnerStreet2>
            <rptOwnerCity>HOUSTON</rptOwnerCity>
            <rptOwnerState>TX</rptOwnerState>
            <rptOwnerZipCode>77067</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>CEO-CHAIRMAN OF THE BOARD</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>1674268</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Options (Right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>45.91</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-02-20</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
                <footnoteId id="F1"/>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>950000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>45.91</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-02-20</value>
            </exerciseDate>
            <expirationDate>
                <value>2014-02-20</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>950000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>950000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F2"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">The options vest in three (3) equal annual installments beginning on the first anniversary of the date of the grant.</footnote>
        <footnote id="F2">Owned directly or indirectly through certain trusts, defined benefit plans and individual retirement accounts of which Mr. Isenberg is a grantor, trustee, or beneficiary.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>EUGENE M ISENBERG</signatureName>
        <signatureDate>2004-02-24</signatureDate>
    </ownerSignature>
</ownershipDocument>

</XML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
