C I T IS P O N S O R E D S T A T E M E N T

Tapping Into Payables Efficiencyand Improved Liquidity

Over the past decade the global demand forenergy has skyrocketed.This unquenchable

thirst has driven the need to uncover vital newsources of oil and natural gas, which has keptinternational drilling companies, such as NaborsIndustries, Inc., literally hopping across the globe.

As one of the world’s largest drillingcontractors, Nabors operates approximately 600land drilling and approximately 800 landworkover and well-servicing rigs in NorthAmerica. In addition, they have an offshore fleetconsisting of 48 platform rigs, 19 jack-ups, andfive barge drilling rigs. In this high stakes race totap into new energy reserves, Nabors can befound throughout the US, Canada, Central andSouth America,Africa and the Middle East.

Global Growth Presents Mounting Treasury Challenge

As impressive as the company’s global growthhas been, the challenge Nabors’ treasuryorganization faced in managing their payablesprocesses was conversely daunting.Treasurerswere managing relationships with more than 35banks in countries scattered across the globe.Thisnecessitated logging onto a multitude of differentelectronic banking systems to manually sendwires, initiate ACH transactions and pull balanceinformation.

“Because we were dealing with so manyonline systems, our entire payables processbecame very manually intensive,” explains DeanCastleberry,Assistant Treasurer for Nabors.“Thisproved to be extremely inefficient and veryexpensive.We recognized the need to centralizeour treasury operations and move away frommanual processing. In so doing, we hoped tobetter utilize the intellectual capital of ourTreasury department.”

According to Castleberry, in addition toautomating cash management processes, Naborswas interested in obtaining greater visibility intotheir cash balances, making it possible to have

cash available when and where it was needed—incurrencies that best suited their liquidityobjectives.

Five Weeks, 37 Meetings, One Global Banking Partner

To address their growing cash managementneeds, Nabors engaged in a comprehensiveevaluation of potential banking partners, seekingto identify a single global candidate toconsolidate their payment processing and cashapplications into a single hub. Some of the keyrequirements were the bank’s ability to meetNabors’ wide coverage needs, capabilities tofacilitate cross-border, multi-currencytransactions, ability to route payments andreceipts electronically, and provide a solutionoffering minimal manual intervention.

After five weeks and 37 meetings, Naborsmandated Citi as their global partner bank. Citiwas selected because of its global footprint, witha presence in 31 of the 33 countries in whichNabors operates.As a result of this mandate, all ofNabors payables will be processed through Citi®File Xchange, the bank’s high-volume transactionand information delivery solution. Citi FileXchange allows treasury to effectively integratepayments andreceivablesinformation withaccounting, ERP andother financialsystems.This advancedsolution lets Naborsstreamline andautomate their cashmanagementprocesses, therebyreducing costs andexpediting disputeresolution.

“As Nabors’concentration bank,

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Dean Castleberry, AssistantTreasurer, Nabors CorporateServices, Inc.

How an international drilling company consolidated its global cash management processes

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Citi is able to deliver tremendous efficienciesthrough a single channel for cost-effectivetransmission and receipt of files from anywhere inthe world, at any time of the day or night,”explains Lance T. Kawaguchi, Director, GlobalRelationship Manager, Citi’s Global TransactionServices “So instead of having to deal withmultiple electronic banking systems, now theyhave just one.”

Nabors sends a single file to Citi, and fromthat file the bank initiates payments in US dollarsor foreign currencies to the 33 countries inwhich they do business.Transaction informationthen flows back to Nabors through the samechannel, resulting in a significant improvement tostraight-through-processing.

Achieving Improved Visibility and Control In order to more effectively manage company

assets, fulfill reporting requirements and addressfiduciary responsibilities, Nabors’ treasury teamrecognized the need to obtain more detailedreporting and analytics. Kawaguchi and his Cititeam recommended CitiDirect® for Securities -Treasury Analytics, a comprehensive custody andcorporate cash solution that provides accounting,compliance, performance and risk reporting onone integrated platform.

Treasury Analytics provides a timely,consolidated overview of short-term cash andfixed income investments, regardless of theirlocation.This Web-based tool consolidates thesettlement details from all broker-dealers,investment managers or custodians at the end ofeach day.Treasury Analytics makes it convenientfor treasury to “drill down” for specificaccounting, compliance, risk and performancereporting, providing access to the informationthey need, when they need it—resulting in moreinformed decision making.

According to Castleberry,“the ability to callup one concise, composite report of totalholdings and the ability to enhance its reportingand transparency to upper management is criticalto the Treasury function. In addition, the abilityto generate financial statements and drill intosecurity details is critical to the Accountingfunction.Two departments can obtain criticalfunctionality from one shared system.” Naborsand Citi are currently in discussions regarding

Treasury Analytics.Beyond delivering

a highly effectivesolution, Citidistinguished itselfthrough anunwaveringcommitment tounderstanding theissues faced by Naborsand a dedication tofinding the best waysto solve them.“Wehave been extremelyimpressed with Citi’scandor, attention todetail, drive to meetall deliverable due dates and dedication tocustomer service,” states Castleberry.“Citi’s globalexpertise provides Nabors’ with the support weneed to deal with changing regulatoryenvironments, while improving the efficiency ofour global operations.”

Lessons Learned Faced with the challenge of managing their

payables processes across more than 35 banksthroughout the world, Nabors engaged in aninitiative to centralize its treasury operations andmove away from manual processing.

Through their choice of a single concentrationbanking partner, Nabors has implemented anadvanced solution that streamlines and automatestheir cash management processes, effectivelyreducing costs and expediting dispute resolution.In addition to improvements to the organization’sstraight-through-processing, Nabors has alsoobtained greater visibility into their cashbalances, allowing for more informed decisionmaking.

With theses changes,Nabors’ treasury haspositioned itself to moreeffectively meet thegrowing global needs ofthe company.

C I T IS P O N S O R E D S T A T E M E N T

2 0 0 8 J U N E 9

For more information, please visit www.transactionservices.citigroup.com©2008 Citibank N.A.All rights reserved. Citi and Citi and Arc Design are

trademarks and service marks of Citigroup Inc. or its affiliates and areused and registered throughout the world.

Lance T. KawaguchiDirector, GTS GlobalRelationship ManagerPower, Energy & ChemicalsNorth America

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