<PAGE>
                                                                    EXHIBIT 10.1



                                NOBLE CORPORATION
                            SHORT TERM INCENTIVE PLAN

                               Revised: July 2004*


SECTION 1.  PURPOSE

         The success of Noble Corporation ("Noble") and its subsidiaries
(collectively, unless the context otherwise requires, the "Company") is a result
of the efforts of all key employees. In order to focus each employee's efforts
on optimizing the Company's overall results, operationally and financially, the
Company maintains this Short Term Incentive Plan (the "Plan") to reward
employees for successful achievement of specific goals.

         An effective incentive plan should both align employee interests with
those of shareholders and motivate and influence employee behavior. Key
positions within the Company have the ability to make a positive contribution to
key factors that increase shareholder value. These factors can be quantified and
measured through achievement of various financial and operational targets, such
as safety, earnings per share and return on capital employed. The objectives of
using such targets in the formulation of the specific Company goals are to link
an employee's annual incentive award more closely to the creation of shareholder
wealth and to promote a culture of high performance and an environment of team
work.

SECTION 2.  PARTICIPATION AND ELIGIBILITY

         Full-time employees in salary classifications 18N and higher who have
completed one year of service at the close of the Plan year are eligible for
consideration of a bonus under the Plan, subject to the discretion of the
Compensation Committee (the "Committee") of the Board of Directors (the "Board")
of Noble. Each such employee will be considered either a "corporate employee" or
a "division employee" for purposes of adjustment of such employee's target bonus
pursuant to Section 6. Full-time, non-exempt employees not in such salary
classifications who have completed one year of service at the close of the Plan
year are also eligible for consideration of a bonus under the Plan, subject to
the discretion of the Committee. The Plan year shall be the calendar year.

* Established in 1977

                                       1
<PAGE>
         To be eligible to receive a bonus payment with respect to a Plan year,
the person must be actively employed on the last day of such Plan year and must
continue to be employed through the date on which bonus payments for such Plan
year are made. The bonus for an employee with less than two years of service as
of the end of a Plan year will be prorated based upon the number of full months
employed, unless another manner of adjustment is determined by the Committee in
its discretion.

         In the event of death, disability or retirement, the employee or estate
of the former employee may receive a pro-rated payment from the Plan, at the
discretion of the Committee and the CEO. For purposes of the Plan, "disability"
means any termination of employment with the Company or an affiliate of the
Company because of a long-term or total disability, as determined by the
Committee and CEO, and "retirement" means a termination of employment with the
Company on a voluntary basis by a person if, immediately prior to such
termination of employment, the sum of the age and the number years of continuous
service of such person with the Company (or affiliate) is equal to or greater
than 60.

         In order to align the interests of the participants under the Plan with
shareholders, participants in pay grades 27 and higher ("Scheduled
Participants") will receive one-half of their bonus amount in Noble Corporation
ordinary shares ("Ordinary Shares"), until the ownership targets set forth in
Annex I are satisfied. Scheduled Participants may elect to receive up to 100
percent of their bonus amount in Ordinary Shares. So long as a Scheduled
Participant satisfies and maintains the ownership target applicable to such
Scheduled Participant under the Plan, such Scheduled Participant may elect to
receive up to 100 percent of his or her bonus amount in cash.

         The total bonus paid for a Plan year shall not be greater than the
aggregate bonus accruals for all participating offices and divisions for such
Plan year. If the accrual amount for a specific participating office or division
for a Plan year is greater than the bonus amount under the Plan for such office
or division, the excess accrual balance will not be distributed. If the accrual
amount for a specific participating office or division for a Plan year is less
than the bonus amount under the Plan, only the accrual balance will be
distributed.

         Should the Company not achieve positive net income for the year, no
bonus will be paid pursuant to the Plan.

                                       2
<PAGE>
SECTION 3.  ADMINISTRATIVE PROCEDURES

         During the fourth quarter of each year, the Company will commence
preparation of budgets and forecasts for the succeeding Plan year. The Board
will approve the budget for the Plan year not later than March 31st of such Plan
year.

         Goals for a Plan year for each of the categories in Section 5 will be
approved by the Committee not later than the second quarter meeting of the Board
in such Plan year. The specific goals established for the Plan year will be set
forth in an Annex II to this Plan for such Plan year, and the Annex II hereto
for each Plan year shall be incorporated into and made a part of this Plan for
such Plan year.

         If, after the establishment of goals for a Plan year, the budget
changes substantially due to subsequent events, such as the acquisition or sale
of assets, then the Chief Executive Officer of Noble (the "CEO") shall, at his
discretion, recommend to the Committee the adjustment of the respective goals in
order that they may not be adversely impacted by such an event. Any such revised
goals shall be applicable to the Plan year from and after the time of their
approval.

SECTION 4.  TARGET BONUS

         A target bonus is determinable for each full-time employee in salary
classification 18N or higher who has completed one year of service at the close
of a Plan year. The target bonus for an employee is an amount equal to the
employee's salary at the end of the Plan year multiplied times the target bonus
percentage assigned to such employee's salary classification. 50 percent of this
amount will be paid based on the achievement of the stated goals under the Plan,
as set forth on page 4, and 50 percent will be available at the discretion of
the Compensation Committee based on merit, individual and team performance and
additional selected criteria. Target bonus percentages range from five percent
to 75 percent based on salary classification, as follows:

         Salary Classification                    Target Bonus Percentage
         ---------------------                    -----------------------

                18N                                          5%
                19N                                         10%
                20N through 22N                             15%
                23N                                         20%
                24N through 25N                             25%
                26N through 27N                             30%
                28N through 29N                             35%
                30C through 31C                             45%
                32C through 34C                             50%
                35C through 36C                             55%
                37C                                         75%

                                       3
<PAGE>

SECTION 5.  GOAL CATEGORIES AND WEIGHTINGS

         Goals for the following categories will be approved by the Committee
for each Plan year. Such goals will then be set forth in the Annex II to this
Plan for such Plan year. The relative weighting assigned to each goal will be as
set forth below subject to annual review by the Committee.

         CORPORATE GOALS
                                                                Assigned Weight
                                                                ---------------
         1.       Safety Results                                       40%
         2.       Earnings per Share                                   30%
         3.       Return on Capital Employed                           30%

         OPERATING DIVISION GOALS

         Gulf Coast Marine, Mexico, Middle East (including the Adriatic Sea and
         India), West Africa, North Sea, Brazil and Hibernia:

         1.       Safety Results                                       40%
         2.       Earnings per Share                                   30%
         3.       Return on Capital Employed                           30%

         TECHNOLOGY GOALS

         A.       Noble Technology Services Division
                  (Noble Downhole Technology, Maurer Technology, NED)

         1.       Capital Budget                                       40%
         2.       Commercialization of Products and Services           30%
         3.       Earnings Before Interest, Taxes, Depreciation        30%
                     and Amortization (EBITDA)

         B.       Triton Engineering Services Company*

         1.       Net Income                                          100%


* At the discretion of the Compensation Committee, a maximum amount of 20-50% of
Triton's EBITDA will be paid out in STIP awards.


                                       4
<PAGE>
SECTION 6.  ADJUSTMENT OF TARGET BONUS

         The respective employee target bonuses determined pursuant to Section 4
for a Plan year are subject to adjustment as set forth in this Section to
reflect the levels of achievement of the specific, predetermined goals for such
Plan year. Any bonus multiplier achieved will be applied to the stated corporate
and division goals, pursuant to the terms of the Plan, and a maximum bonus
multiplier of 2.0 may be applied to the discretionary portion of the STIP award,
subject to the approval of the Committee and CEO, as stated in Section 7 of this
document.

         Corporate Employees. In order to promote cooperation between the
         corporate office and the divisions, the target bonus for a corporate
         employee will be weighted 25 percent for achievement of the corporate
         goals, 25 percent for the cumulative average achievement of the
         division goals and 50 percent will be based on merit, individual and
         team performance and additional selected criteria, as determined by the
         Compensation Committee.

         Operating and Technology Division Employees. In order to promote
         cooperation among the operating and technology divisions and
         recognition by each division of its contribution to the Company's
         overall performance, the target bonus for a division employee will be
         weighted 25 percent for achievement of the applicable division goals,
         25 percent for achievement of the corporate goals and 50 percent will
         be based on merit, individual and team performance and additional
         selected criteria, as determined by the Compensation Committee.

         Subject to the determination by the Board of a sufficient bonus pool
for a Plan year pursuant to Section 7, the bonus payable to an eligible employee
in salary classification 18N or higher will be an amount equal to such
employee's target bonus amount multiplied times the applicable multiplier
determined under the following schedule:

             Combined Weighted                         Applicable Multiplier
       Percentage of Goal Achievement                to Calculate Bonus Payable
       ------------------------------                --------------------------
             Greater than 160%                                 2.00
                    141 - 160%                                 1.75
                    131 - 140%                                 1.50
                    121 - 130%                                 1.40
                    106 - 120%                                 1.20
                     96 - 105%                                 1.00
                     76 -  95%                                  .75
                     65 -  75%                                  .50
                     Below 65%                                  .00

                                       5
<PAGE>

SECTION 7.  ALLOCATION OF BONUS PAYABLE

         After the end of each Plan year, the Board, in its best business
judgment, will determine the total bonus pool for such Plan year, giving due
consideration to the aggregate target bonus amounts, overall Company
performance, and levels of attainment of the specific, predetermined corporate
or division goals for such Plan year. In determining overall Company
performance, the Board will consider the Company's performance in relation to
both the predetermined corporate and division goals and the prevailing market
conditions in the industry during the Plan year.

         The total bonus pool authorized by the Board for a Plan year may be an
amount equal to, less than, or greater than the aggregate amount of the bonuses
payable to all eligible employees in salary classifications 18N through 37C (the
"Aggregate Calculated Pool").

         All eligible employees in salary classifications 18N through 37C will
receive a bonus as calculated in accordance with Section 6, provided the Board
has determined and authorized a total bonus pool in an amount equal to or
greater than the Aggregate Calculated Pool. If the Board authorizes a total
bonus pool in an amount less than the Aggregate Calculated Pool, then the Board
shall also determine the percentage of such bonus pool (which may be any
percentage up to 100 percent) that shall be allocated to the eligible employees
in salary classifications 18N through 37C, and the bonuses otherwise payable to
such employees, subject to the last sentence of the next succeeding paragraph,
will be prorated accordingly based on the amount so allocated. In such event,
the percentage of the total bonus pool not so allocated, if any, shall be
available for payment to the eligible full-time, non-exempt employees not in
salary classifications 18N through 37C based upon merit. If the Board authorizes
a total bonus pool in an amount greater than the Aggregate Calculated Pool, then
the excess amount will be allocated to eligible full-time, non-exempt employees
not in salary classifications 18N through 37C, subject to the discretion of the
Committee. Managers having responsibility for recommending the allocation of
bonuses to eligible full-time, non-exempt employees not in salary
classifications 18N through 37C shall submit their recommended bonus based on
their performance and contributions to the Senior Vice President of
Administration and the CEO for review and approval.

         All bonus calculations, allocations and recommendations are subject to
review and approval by the Committee. Notwithstanding anything otherwise
contained in this Plan, the Committee and the CEO (and any delegated designee of
the CEO) shall have the authority to adjust individual bonus amounts as deemed
to be appropriate for any reason, including, but not limited to, company or
division performance, individual employee performance, employee conduct, etc.

                                       6