| o      | REGISTRATION      STATEMENT PURSUANT TO SECTION 12(b) OR (g) |
|--------|--------------------------------------------------------------|
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934                  |
|   |                                                         |

| x      | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) |
|--------|----------------------------------------------------|
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934        |

| For      the fiscal year      ended                                               December 31,      2007 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o      | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) |
|--------|--------------------------------------------------------|
|   | OF      THE SECURITIES EXCHANGE ACT OF 1934            |
|   |                                                   |

| o      | SHELL      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|--------|------------------------------------------------------------------|
|   | SECURITIES      EXCHANGE ACT OF 1934                             |
|   |                                                             |

| For      the transition period from |      |
|-------------------------------------|-----------|
| Commission      file number         | 001-16601 |

|                                                                    |
|-------------------------------------------------------------------------|
| Frontline      Ltd                                                      |
| (Exact      name of Registrant as specified in its charter)             |
|                                                                    |
| Frontline      Ltd                                                      |
| (Translation      of Registrant’s name into English)              |
|                                                                    |
| Bermuda                                                                 |
| (Jurisdiction      of incorporation or organization)                    |
| Par-la-Ville      Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda |
| (Address      of principal executive offices)                           |

----

|                                                                                                           |
|----------------------------------------------------------------------------------------------------------------|
| Georgina      Sousa, (1) 441 295 3494, Par-la-Ville Place, 14 Par-la-Ville Road,      Hamilton, HM 08, Bermuda |
| (Name,      Telephone, E-mail and/or Facsimile number and Address of Company Contact      Person)              |

| Title      of each class              |   | Name      of each exchange on which registered |
|---------------------------------------|--------|------------------------------------------------|
|                                  |   |                                           |
| Ordinary      Shares, $2.50 Par Value |   | New      York Stock Exchange                   |
|                                  |   |                                           |
|                                  |   |                                           |

| None                  |
|-----------------------|
| (Title      of Class) |
|                  |

| Ordinary      Shares, $2.50 Par Value |
|---------------------------------------|
| (Title      of Class)                 |
|                                  |

| Large      accelerated filer  x | Accelerated      filer  o | Non-accelerated      filer  o |
|-------------------------------------------|-------------------------------------|-----------------------------------------|
|                                      |                                |                                    |

| U.S.      GAAP x | International      Financial Reporting Standings o | Other      o |
|------------------|----------------------------------------------------|--------------|

----

|          |                                                                                   | PAGE   |
|---------------|----------------------------------------------------------------------------------------|--------|
| PART I        |                                                                                   |   |
| Item      1.  | Identity      of Directors, Senior Management and Advisers                             | 1      |
| Item      2.  | Offer      Statistics and Expected Timetable                                           | 1      |
| Item      3.  | Key      Information                                                                   | 1      |
| Item      4.  | Information      on the Company                                                        | 14     |
| Item      4A. | Unresolved      Staff Comments                                                         | 35     |
| Item      5.  | Operating      and Financial Review and Prospects                                      | 35     |
| Item      6.  | Directors,      Senior Management and Employees                                        | 57     |
| Item      7.  | Major      Shareholders and Related Party Transactions                                 | 60     |
| Item      8.  | Financial      Information                                                             | 63     |
| Item      9.  | The      Offer and Listing                                                             | 64     |
| Item      10. | Additional      Information                                                            | 65     |
| Item      11. | Quantitative      and Qualitative Disclosures about Market Risk                        | 78     |
| Item      12. | Description      of Securities other than Equity Securities                            | 79     |
| PART II       |                                                                                   |   |
| Item      13. | Defaults,      Dividend Arrearages and Delinquencies                                   | 80     |
| Item      14. | Material      Modifications to the Rights of Security Holders and Use of      Proceeds | 80     |
| Item      15. | Controls      and Procedures                                                           | 80     |

| Item      16.  | Reserved                                                                       | 81     |
|----------------|--------------------------------------------------------------------------------|--------|
| Item      16A. | Audit      Committee Financial Expert                                          | 81     |
| Item      16B. | Code      of Ethics                                                            | 81     |
| Item      16C. | Principal      Accountant Fees and Services                                    | 81     |
| Item      16D. | Exemptions      from the Listing Standards for Audit Committees                | 81     |
| Item      16E. | Purchases      of Equity Securities by the Issuer and Affiliated    Purchasers | 81     |
| PART III       |                                                                           |   |
| Item      17.  | Financial      Statements                                                      | 82     |
| Item      18.  | Financial      Statements                                                      | 82     |
| Item      19.  | Exhibits                                                                       | 82     |

----

----

| ITEM      1. | IDENTITY      OF DIRECTORS, SENIOR MANAGEMENT ANDADVISERS |
|--------------|-----------------------------------------------------------|

| ITEM      2. | OFFER      STATISTICS AND EXPECTED TIMETABLE |
|--------------|----------------------------------------------|

| ITEM      3. | KEY      INFORMATION |
|--------------|----------------------|

----

|                                                                                                                                           |   | Fiscal      year ended December 31, |       |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                                                                                           |   | 2007                                |       |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
|                                                                                                                                           |   |
| (in      thousands of $, except ordinary shares, per share data and      ratios)                                                          |   |
| Income Statement Data      1:                                                                                                                  |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      operating revenues 2                                                                                                                |   |                                | 1,299,927  |   |   |   | 1,558,369 |   |   |   | 1,495,975 |   |   |   | 1,842,923 |   |   |   | 1,159,439 |   |
| Total      operating expenses 2                                                                                                                |   |                                | 898,904    |   |   |   | 850,623 |   |   |   | 713,919 |   |   |   | 737,389 |   |   |   | 683,515 |   |
| Net      operating income                                                                                                                      |   |                                | 519,191    |   |   |   | 803,401 |   |   |   | 858,137 |   |   |   | 1,125,108 |   |   |   | 480,984 |   |
| Net      income from continuing operations before income taxes, minority interest      and cumulative effect of change in accounting principle |   |                                | 503,991    |   |   |   | 661,330 |   |   |   | 761,078 |   |   |   | 970,936 |   |   |   | 439,518 |   |
| Net      income from continuing operations before cumulative effect of change in      accounting principle                                     |   |                                | 564,976    |   |   |   | 502,486 |   |   |   | 592,743 |   |   |   | 905,763 |   |   |   | 439,515 |   |
| Discontinued      operations 3                                                                                                                 |   |                                | 5,442      |   |   |   | 13,514 |   |   |   | 14,096 |   |   |   | 117,619 |   |   |   | 3,612 |   |
| Cumulative      effect of change in accounting principle      4                                                                                |   |                                | —    |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (33,767 | ) |
| Net      income                                                                                                                                |   |                                | 570,418    |   |   |   | 516,000 |   |   |   | 606,839 |   |   |   | 1,023,382 |   |   |   | 409,360 |   |
| Earnings      from continuing operations before cumulative effect of change in      accounting principle per Ordinary Share                    |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -      basic                                                                                                                                   |   | $                                   | 7.55       |   |   | $ | 6.72 |   |   | $ | 7.92 |   |   | $ | 12.21 |   |   | $ | 5.87 |   |
| -      diluted                                                                                                                                 |   | $                                   | 7.55       |   |   | $ | 6.72 |   |   | $ | 7.92 |   |   | $ | 12.21 |   |   | $ | 5.86 |   |
| Net      income per Ordinary Share                                                                                                             |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| -      basic                                                                                                                                   |   | $                                   | 7.62       |   |   | $ | 6.90 |   |   | $ | 8.11 |   |   | $ | 13.79 |   |   | $ | 5.47 |   |
| -      diluted                                                                                                                                 |   | $                                   | 7.62       |   |   | $ | 6.90 |   |   | $ | 8.11 |   |   | $ | 13.79 |   |   | $ | 5.45 |   |
| Cash      dividends declared per share                                                                                                         |   | $                                   | 8.30       |   |   | $ | 7.00 |   |   | $ | 10.10 |   |   | $ | 13.60 |   |   | $ | 4.55 |   |
|                                                                                                                                           |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data (at end of      year) 1:                                                                                                    |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                                 |   |                                | 168,432    |   |   |   | 197,181 |   |   |   | 92,782 |   |   |   | 96,879 |   |   |   | 112,000 |   |
| Newbuildings      and vessel purchase options                                                                                                  |   |                                | 160,298    |   |   |   | 166,851 |   |   |   | 15,927 |   |   |   | 24,231 |   |   |   | 8,370 |   |
| Vessels      and equipment, net                                                                                                                |   |                                | 208,516    |   |   |   | 2,446,278 |   |   |   | 2,584,847 |   |   |   | 2,254,361 |   |   |   | 2,165,239 |   |
| Vessels      under capital lease, net                                                                                                          |   |                                | 2,324,789  |   |   |   | 626,374 |   |   |   | 672,608 |   |   |   | 718,842 |   |   |   | 765,126 |   |
| Investments      in associated companies                                                                                                       |   |                                | 5,633      |   |   |   | 17,825 |   |   |   | 15,783 |   |   |   | 28,881 |   |   |   | 179,416 |   |
| Total      assets                                                                                                                              |   |                                | 3,762,091  |   |   |   | 4,589,937 |   |   |   | 4,454,817 |   |   |   | 4,211,160 |   |   |   | 4,319,345 |   |
| Short-term      debt and current portion of long-term debt                                                                                     |   |                                | 96,811     |   |   |   | 281,409 |   |   |   | 228,135 |   |   |   | 137,332 |   |   |   | 174,826 |   |
| Current      portion of obligations under capital lease                                                                                        |   |                                | 179,604    |   |   |   | 28,857 |   |   |   | 25,142 |   |   |   | 21,498 |   |   |   | 20,138 |   |
| Long-term      debt                                                                                                                            |   |                                | 376,723    |   |   |   | 2,181,885 |   |   |   | 2,101,061 |   |   |   | 1,879,598 |   |   |   | 1,966,471 |   |
| Obligations      under capital lease                                                                                                           |   |                                | 2,318,794  |   |   |   | 723,073 |   |   |   | 706,279 |   |   |   | 732,153 |   |   |   | 753,823 |   |
| Share      capital                                                                                                                             |   |                                | 187,063    |   |   |   | 187,063 |   |   |   | 187,063 |   |   |   | 187,063 |   |   |   | 184,120 |   |
| Stockholders’      equity                                                                                                                |   |                                | 445,969    |   |   |   | 668,560 |   |   |   | 715,166 |   |   |   | 917,968 |   |   |   | 1,255,417 |   |
| Ordinary      Shares outstanding                                                                                                               |   |                                | 74,825,169 |   |   |   | 74,825,169 |   |   |   | 74,825,169 |   |   |   | 74,825,169 |   |   |   | 73,647,930 |   |
|                                                                                                                                           |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average Ordinary Shares outstanding                                                                                              |   |                                | 74,825,169 |   |   |   | 74,825,169 |   |   |   | 74,825,169 |   |   |   | 74,192,939 |   |   |   | 74,901,900 |   |
|                                                                                                                                           |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Financial Data:                                                                                                                     |   |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      to assets ratio (percentage) 5                                                                                                     |   |                                | 11.8       | % |   |   | 14.6 | % |   |   | 16.1 | % |   |   | 21.8 | % |   |   | 29.1 | % |
| Debt      to equity ratio 6                                                                                                                    |   |                                | 6.7        |   |   |   | 4.8 |   |   |   | 4.3 |   |   |   | 3.0 |   |   |   | 2.3 |   |
| Price      earnings ratio 7                                                                                                                    |   |                                | 6.3        |   |   |   | 4.6 |   |   |   | 4.7 |   |   |   | 3.2 |   |   |   | 4.7 |   |
| Time      charter equivalent revenue 8                                                                                                         |   |                                | 938,960    |   |   |   | 1,154,029 |   |   |   | 1,155,135 |   |   |   | 1,477,537 |   |   |   | 832,950 |   |

----

|   | 1. | The      Company distributed the majority of its remaining shareholding in Ship      Finance International Limited (“Ship Finance”) in March 2007 and no longer      consolidates Ship Finance as of March 31, 2007. A summary of the major      changes to the financial statements is as  follows; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | Vessels      leased from Ship Finance, which were previously reported as wholly owned      are reported as vessels held under capital  lease. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Capital      lease obligations with Ship Finance, which were previously eliminated on      consolidation are reported as liabilities with the related interest      recorded in the income statement. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c. | Debt      incurred by Ship Finance, which was previously reported as debt of the      Company is no longer reported. |
|--------|----|----------------------------------------------------------------------------------------------------------------------|

|   | d. | Derivative      instruments held by Ship Finance are no longer  reported. |
|--------|----|---------------------------------------------------------------------------|

|   | e. | Minority      interest expense relating to Ship Finance is no longer      reported. |
|--------|----|-------------------------------------------------------------------------------------|

|   | f. | Profit      share expense relating to amounts due to Ship Finance is shown in the      income statement. |
|--------|----|----------------------------------------------------------------------------------------------------------|

|   | g. | Results      from Ship Finance’s container ships, jack-up rigs and Panamax vessels are      no longer reported in the Company’s consolidated  results |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Previously      we reported net operating revenues in our income statement data. Effective      December 31, 2003 we reclassified voyage expenses and commission as a      component of total operating expenses and now report total operating      revenues and total operatingexpenses. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | The      Company disposed of the container vessel and rig operations of Ship      Finance in the first quarter of 2007 as a result of the spin off of Ship      Finance. These operations have been recorded as discontinued operations in      2007 and 2006. The results from container vessels have also been recorded      in discontinued operations in 2005. These operations have been recorded as      discontinued operations for all applicable years presented, which are      2007, 2006 and 2005. During the years ended December 31, 2005 and 2004 the      Company disposed of portions of its dry-bulk operations, which have been      recorded as discontinued operations in the years ended December 31, 2005,      2004 and 2003. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | In      2003, the Company adopted FIN 46R “Consolidation of Variable Interest      Entities” and recorded a charge of $33.7 million as a result of this      change in accounting principle. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | Equity      to assets ratio is calculated as total stockholders’ equity divided by      total assets. |
|--------|----|-------------------------------------------------------------------------------------------------------------|

|   | 6. | Debt      to equity ratio is calculated as total interest bearing current and      long-term liabilities, including obligations under capital leases, divided      by stockholders’ equity. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7. | Price      earnings ratio is calculated by dividing the closing year end share price      by basic earnings per share. |
|--------|----|------------------------------------------------------------------------------------------------------------------------|

|   | 8. | A      reconciliation of time charter equivalent revenues to total operating      revenues as reflected in the consolidated statements of operations is as      follows: |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   | 2007   |      |   | 2006   |   |      | 2005   |   |   | 2004      |   |   | 2003   |      |
|--------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|
| (in      thousands of $)             |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |
| Total      operating revenues        |   |   | 1,299,927 |   |   |   | 1,558,369 |   |   |   | 1,495,975 |   |   |   | 1,842,923 |   |   |   | 1,159,439 |   |
| Less:                                |   |   |      |   |   |   |      |   |   |   |      |   |   |   |      |   |   |   |   |   |
| Other      revenue                   |   |   | (8,516    | )      |   |   | (5,294    | )      |   |   | (3,877    | )      |   |   | (3,777    | ) |   |   | (3,111 | ) |
| Voyage      expense                  |   |   | (352,451  | )      |   |   | (399,046  | )      |   |   | (336,963  | )      |   |   | (361,609  | ) |   |   | (323,378 | ) |
| Time      charter equivalent revenue |   |   | 938,960   |   |   |   | 1,154,029 |   |   |   | 1,155,135 |   |   |   | 1,477,537 |   |   |   | 832,950 |   |

----

| ·   | demand      for oil and oil products; |
|--------------------|---------------------------------------|

| ·   | global      and regional economic and politicalconditions; |
|--------------------|------------------------------------------------------------|

| ·   | changes      in oil production and refiningcapacity; |
|--------------------|------------------------------------------------------|

| ·   | environmental      and other regulatory developments; |
|--------------------|-------------------------------------------------------|

| ·   | the      distance oil and oil products are to be moved by sea;  and |
|--------------------|---------------------------------------------------------------------|

| ·   | changes      in seaborne and other transportationpatterns. |
|--------------------|------------------------------------------------------------|

| ·   | the      number of newbuilding deliveries; |
|--------------------|--------------------------------------------|

| ·   | the      scrapping rate of older vessels; |
|--------------------|-------------------------------------------|

| ·   | port      or canal congestion |
|--------------------|-------------------------------|

| ·   | vessel      casualties; |
|--------------------|-------------------------|

| ·   | price      of steel; |
|--------------------|----------------------|

| ·   | potential      conversion of vessels to alternativeuse; |
|--------------------|---------------------------------------------------------|

----

| ·   | the      number of vessels that are out of service;and |
|--------------------|--------------------------------------------------------|

| ·   | changes      in environmental and other regulations that may effectively cause      reductions in the carrying capacity of vessels or early obsolescence of      tonnage. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased      crude oil production from otherareas; |
|--------------------|------------------------------------------------------|

| ·   | increased      refining capacity in the Arabian Gulf, West Africa or the    FSU; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | increased      use of existing and future crude oil pipelines in the Arabian Gulf, West      Africa and FSU; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | a      decision by Arabian Gulf, West African and FSU oil-producing nations to      increase their crude oil prices or to further decrease or limit their      crude oil production; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | armed      conflict in the Arabian Gulf and West Africa and political or other      factors; and |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | the      development and the relative costs of nuclear power, natural gas, coal and      other alternative sources ofenergy. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | a      marine disaster; |
|--------------------|-------------------------|

| ·   | piracy; |
|--------------------|---------|

| ·   | environmental      accidents; |
|--------------------|-------------------------------|

| ·   | cargo      and property losses or damage; and |
|--------------------|-----------------------------------------------|

| ·   | business      interruptions caused by mechanical failure, human error, war, terrorism,      piracy, political action in various countries, labor  strikes,      or adverse weather conditions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | general      economic and market conditions affecting the      shipping  industry; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | competition      from other shipping companies; |
|--------------------|-------------------------------------------------|

| ·   | types      and sizes of vessels; |
|--------------------|----------------------------------|

| ·   | other      modes of transportation; |
|--------------------|-------------------------------------|

| ·   | cost      of newbuildings; |
|--------------------|----------------------------|

| ·   | shipyard      capacity; |
|--------------------|-------------------------|

| ·   | governmental      or other regulations; |
|--------------------|-----------------------------------------|

| ·   | age      of vessels; |
|--------------------|----------------------|

| ·   | prevailing      level of charter rates; and |
|--------------------|---------------------------------------------|

| ·   | technological      advances. |
|--------------------|------------------------------|

----

----

----

----

----

----

| ITEM      4. | INFORMATION      ON THE COMPANY |
|--------------|---------------------------------|

----

|   | · | In      September 2006, Ship Finance announced the sale of the VLCC Front Tobago      to a third party for gross proceeds of $45.0 million and Frontline      received a compensation payment of $9.6 million from Ship Finance, which      was eliminated on consolidation, in connection with the    sale. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      January 2007, Ship Finance sold its single hull Suezmax tanker Front      Transporter to an unrelated third party for a gross sales price of $38.0      million. We received a compensation payment of $14.8 million from Ship      Finance, which was eliminated on consolidation, on termination of the      charter. The vessel was delivered to her new owner in March      2007. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      March 2007, the single hull VLCC Front Vanadis was sold and delivered to      an unrelated third party in May 2007. Upon delivery, our long-term charter      party contract with Ship Finance was terminated early, and Frontline      received a compensation payment in the amount of $13.2      million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      August 2007, we sold the single hull Suezmax tanker Front Horizon to a      subsidiary of Farahead Holdings Limited, a company subject to significant      influence or indirect control of our Chairman, John Fredriksen for net      proceeds of $28.0 million resulting in a net gain of $6.2      million. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      October 2007, we mutually agreed with Ship Finance to terminate the      long-term charter party contract for the single hull VLCC Front Duchess.      This termination was cancelled in March2008. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      December 2007, we agreed with Ship Finance to terminate the long term      charter parties between the companies for the double sided, single bottom      Suezmax vessels Front Birch and Front Maple. Ship Finance simultaneously      sold the vessels. Delivery of the Front Birch and Front Maple took place      in December 2007 and January 2008, respectively. We received compensation      payments of approximately $32.8 million for the early termination of the      current charter parties, which will be recognized at the time of delivery      to the new owners. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Additionally,      in March 2008, we agreed with Ship Finance to terminate the long term      charter party between the companies for the single hull VLCC Front Sabang.      Ship Finance simultaneously sold the vessel. We will receive a      compensation payment of approximately $25 million for the early      termination of the current charter party, which will be recognized at the      time of delivery to the new owners, which is expected to take place in the      second quarter of 2008. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| ·   | emphasizing      operational safety and quality maintenance for all of our      vessels; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | complying      with all current and proposed environmental  regulations; |
|--------------------|--------------------------------------------------------------------------|

| ·   | outsourcing      technical operations and crewing; |
|--------------------|----------------------------------------------------|

| ·   | continuing      to achieve competitive operationalcosts; |
|--------------------|----------------------------------------------------------|

| ·   | operating      a modern and homogeneous fleet oftankers; |
|--------------------|----------------------------------------------------------|

| ·   | achieving      high utilization of ourvessels; |
|--------------------|------------------------------------------------|

----

| ·   | achieving      competitive financing arrangements; |
|--------------------|----------------------------------------------------|

| ·   | achieving      a satisfactory mix of term charters, contracts of affreightment and spot      voyages; and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | developing      and maintaining relationships with major oil companies and industrial      charterers. |
|--------------------|--------------------------------------------------------------------------------------------------------|

----

----

| ·   | 25-year      old tankers must be of double hull construction or of a mid-deck design      with double-sided construction,unless: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | they      have wing tanks or double-bottom spaces not used for the carriage of oil      which cover at least 30% of the length of the cargo tank section of the      hull or bottom; or |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | they      are capable of hydrostatically balanced loading (loading less cargo into a      tanker so that in the event of a breach of the hull, water flows into the      tanker, displacing oil upwards instead of into the  sea); |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 30-year      old tankers must be of double hull construction or mid-deck design with      double-sided construction; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | all      tankers will be subject to enhancedinspections. |
|--------------------|----------------------------------------------------------|

| ·   | is      the subject of a contract for a major conversion or original construction      on or after July 6, 1993; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | commences      a major conversion or has its keel laid on or after January 6, 1994;      or |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | completes      a major conversion or is a newbuilding delivered on or after July 6,      1996. |
|--------------------|------------------------------------------------------------------------------------------------|

----

| Category      of Oil Tankers                                                                                                                                                                                                                                                                                                                                                                                             |   | Date      or Year for Phase Out                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Category      1 oil tankers of 20,000 dwt and above carrying crude oil, fuel oil, heavy      diesel oil or lubricating oil as cargo, and of 30,000 dwt and above      carrying other oils, which do not comply with the requirements for      protectively located segregated ballast tanks                                                                                                                         |   | April      5, 2005 for ships delivered on April 5, 1982 or earlier; or2005      for ships delivered after April 5, 1982                                                                                                                                                                                                                                                |
| Category      2 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above      carrying other oils, which do comply with the protectively located      segregated ballast tank requirementsandCategory      3 - oil tankers of 5,000 dwt and above but less than the tonnage specified      for Category 1 and 2 tankers.  |   | April      5, 2005 for ships delivered on April 5, 1977 or earlier2005      for ships delivered after April 5, 1977 but before January 1,      19782006      for ships delivered in 1978 and 19792007      for ships delivered in 1980 and 19812008      for ships delivered in 19822009      for ships delivered in 19832010      for ships delivered in 1984 orlater |

| Vessel      Name       |   | Vessel      type |   | VesselCategory |   | YearBuilt |   | IMO      phase out |   | Flag      state Exemption |   |
|------------------------|--------|------------------|--------|----------------|--------|-----------|--------|--------------------|--------|--------------------------------|--------|
|                   |   |             |   |           |   |      |   |               |   |                           |   |
| Front      Voyager     |   | Suezmax          |   | SH             |   | 1992      |   | 2010               |   | 2015                           |   |
| Edinburgh(*)           |   | VLCC             |   | DS             |   | 1993      |   | 2018               |   | n/a                            |   |
| Front      Ace(*)      |   | VLCC             |   | SH             |   | 1993      |   | 2010               |   | 2015                           |   |
| Front      Duchess(*)  |   | VLCC             |   | SH             |   | 1993      |   | 2010               |   | 2015                           |   |
| Front      Duke(*)     |   | VLCC             |   | SH             |   | 1992      |   | 2010               |   | 2015                           |   |
| Front      Highness(*) |   | VLCC             |   | SH             |   | 1991      |   | 2010               |   | 2015                           |   |
| Front      Lady(*)     |   | VLCC             |   | SH             |   | 1991      |   | 2010               |   | 2015                           |   |
| Front      Lord(*)     |   | VLCC             |   | SH             |   | 1991      |   | 2010               |   | 2015                           |   |
| Front      Sabang(*)   |   | VLCC             |   | SH             |   | 1990      |   | 2010               |   | 2015                           |   |

----

| ·   | the      oil tanker conversion was completed before July 6,  1996; |
|--------------------|--------------------------------------------------------------------|

| ·   | the      conversion included the replacement of the entire cargo section and      fore-body and the tanker complies with all the relevant provisions of      MARPOL Convention applicable at the date of completion of the major      conversion; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      original delivery date of the oil tanker will apply when considering the      15 years of age threshold relating to the first technical specifications      survey to be completed in accordance with MARPOL Convention. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | crude      oils having a density at 15oC higher than 900 kg/m3; |
|--------------------|----------------------------------------------------------------------|

| ·   | fuel      oils having either a density at 15oC higher than 900 kg/m3 or      a kinematic viscosity at 50oC higher than 180 mm2/s;      or |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | bitumen,      tar and their emulsions. |
|--------------------|----------------------------------------|

----

----

----

| ·   | natural      resource damages and related assessmentcosts; |
|--------------------|------------------------------------------------------------|

| ·   | real      and personal property damages; |
|--------------------|------------------------------------------|

| ·   | net      loss of taxes, royalties, rents, profits or earnings capacity;      and |
|--------------------|----------------------------------------------------------------------------------|

| ·   | net      cost of public services necessitated by a spill response, such as      protection from fire, safety or health hazards; and loss of subsistence      use of natural resources. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | address      a worst case scenario and identify and ensure, through contract or other      approved means, the availability of necessary private response resources      to respond to a worst casedischarge; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | describe      crew training and drills; and |
|--------------------|---------------------------------------------|

| ·   | identify      a qualified individual with full authority to implement removal      actions. |
|--------------------|---------------------------------------------------------------------------------------------|

----

----

| ·   | on-board      installation of automatic identification systems to provide a means for      the automatic transmission of safety-related information from among      similarly equipped ships and shore stations, including information on a      ship’s identity, position, course, speed and navigational      status; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | on-board      installation of ship security alert systems, which do not sound on the      vessel but only alerts the authorities onshore; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      development of vessel securityplans; |
|--------------------|-----------------------------------------------|

| ·   | ship      identification number to be permanently marked on a vessel’s      hull; |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | a      continuous synopsis record kept onboard showing a vessel’s history      including, name of the ship and of the state whose flag the ship is      entitled to fly, the date on which the ship was registered with that      state, the ship’s identification number, the port at which the ship is      registered and the name of the registered owner(s) and their registered      address; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | compliance      with flag state security certification  requirements. |
|--------------------|-----------------------------------------------------------------------|

----

| ·   | Annual      Surveys. For seagoing ships, annual surveys are conducted for the hull and      the machinery, including the electrical plant and where applicable for      special equipment classed, at intervals of 12 months from the date of      commencement of the class period indicated in the    certificate. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Intermediate      Surveys. Extended annual surveys are referred to as intermediate surveys      and typically are conducted two and one-half years after commissioning and      each class renewal. Intermediate surveys may be carried out on the      occasion of the second or third annualsurvey. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Class      Renewal Surveys. Class renewal surveys, also known as special surveys, are      carried out for the ship’s hull, machinery, including the electrical plant      and for any special equipment classed, at the intervals indicated by the      character of classification for the hull. At the special survey the vessel      is thoroughly examined, including audio-gauging to determine the thickness      of the steel structures. Should the thickness be found to be less than      class requirements, the classification society would prescribe steel      renewals. The classification society may grant a one year grace period for      completion of the special survey. Substantial amounts of money may have to      be spent for steel renewals to pass a special survey if the vessel      experiences excessive wear and tear. In lieu of the special survey every      four or five years, depending on whether a grace period was granted, a ship owner has the option of arranging      with the classification society for the vessel’s hull or machinery to be      on a continuous survey cycle, in which every part of the vessel would be      surveyed within a five year cycle. At an owner’s application, the surveys      required for class renewal may be split according to an agreed schedule to      extend over the entire period of class. This process is referred to as      continuous class renewal. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Vessel                       | Built  | Approximate Dwt. | Construction | Flag   | Type of Employment    |
|------------------------------|--------|------------------|--------------|--------|-----------------------|
| Tonnage Owned Directly       |   |             |         |   |                  |
|                         |   |             |         |   |                  |
| VLCCs                        |   |             |         |   |                  |
| Antares      Voyager         | 1998   | 310,000          | Double-hull  | BA     | Bareboat      charter |
| Phoenix      Voyager         | 1999   | 308,500          | Double-hull  | BA     | Bareboat      charter |
| Hull      2396 (Newbuilding) | 2009   | 297,000          | Double-hull  | n/a    | n/a                   |
| Hull      2397 (Newbuilding) | 2009   | 297,000          | Double-hull  | n/a    | n/a                   |
| Hull      2419 (Newbuilding) | 2010   | 297,000          | Double-hull  | n/a    | n/a                   |
| Hull      2420 (Newbuilding) | 2010   | 297,000          | Double-hull  | n/a    | n/a                   |
| Front      Shanghai          | 2006   | 298,500          | Double-hull  | HK     | Spot      market      |
|                         |   |             |         |   |                  |
| Suezmax Tankers              |   |             |         |   |                  |
| Hull      1017 (Newbuilding) | 2008   | 156,000          | Double-hull  | n/a    | n/a                   |
| Hull      1018 (Newbuilding) | 2009   | 156,000          | Double-hull  | n/a    | n/a                   |
| Hull      1019 (Newbuilding) | 2008   | 156,000          | Double-hull  | n/a    | n/a                   |
| Hull      1026 (Newbuilding) | 2009   | 156,000          | Double-hull  | n/a    | n/a                   |
| Hull      1056 (Newbuilding) | 2010   | 156,000          | Double-hull  | n/a    | n/a                   |
| Hull      1057 (Newbuilding) | 2010   | 156,000          | Double-hull  | n/a    | n/a                   |
| Hull      1060 (Newbuilding) | 2010   | 156,000          | Double-hull  | n/a    | n/a                   |

----

| Vessel                       | Built  | Approximate Dwt. | Construction | Flag   | Type of Employment    |
|------------------------------|--------|------------------|--------------|--------|-----------------------|
| Tonnage Owned Directly       |   |             |         |   |                  |
|                         |   |             |         |   |                  |
| Hull      1061 (Newbuilding) | 2010   | 156,000          | Double-hull  | n/a    | n/a                   |
| Front      Voyager           | 1992   | 155,000          | Single-hull  | BA     | Spot      market      |
| Cygnus      Voyager          | 1993   | 157,000          | Double-hull  | BA     | Bareboat      charter |
| Altair      Voyager          | 1993   | 136,000          | Double-hull  | BA     | Bareboat      charter |
| Sirius      Voyager          | 1994   | 156,000          | Double-hull  | BA     | Bareboat      charter |
|                         |   |             |         |   |                  |

| Tonnage chartered in from Ship      Finance |   |    |
|---------------------------------------------|--------|---------|
|                                        |   |    |   |   |   |
| VLCCs                                       |   |    |   |   |   |
| Front      Sabang (*)                       | 1990   | 286,000 | Single-hull | SG | Time      charter |
| Front      Highness                         | 1991   | 284,000 | Single-hull | SG | Time      charter |
| Front      Lady                             | 1991   | 284,000 | Single-hull | SG | Time      charter |
| Front      Lord                             | 1991   | 284,000 | Single-hull | SG | Time      charter |
| Front      Duke                             | 1992   | 284,000 | Single-hull | SG | Time      charter |
| Front      Duchess                          | 1993   | 284,000 | Single-hull | SG | Spot      market |
| Edinburgh                                   | 1993   | 302,000 | Double-side | LIB | Time      charter |
| Front      Ace                              | 1993   | 276,000 | Single-hull | LIB | Time      charter |
| Front      Vanguard                         | 1998   | 300,000 | Double-hull | MI | Spot      market |
| Front      Century                          | 1998   | 311,000 | Double-hull | MI | Time      charter |
| Front      Champion                         | 1998   | 311,000 | Double-hull | BA | Spot      market |
| Front      Vista                            | 1998   | 300,000 | Double-hull | MI | Spot      market |
| Front      Comanche                         | 1999   | 300,000 | Double-hull | FRA | Time      charter |
| Golden      Victory                         | 1999   | 300,000 | Double-hull | MI | Time      charter |
| Front      Circassia                        | 1999   | 306,000 | Double-hull | MI | Spot      market |
| Front      Opalia                           | 1999   | 302,000 | Double-hull | MI | Spot      market |
| Ocana      (Ex Front Commerce)              | 1999   | 300,000 | Double-hull | IoM | Bareboat      charter |
| Front      Scilla                           | 2000   | 303,000 | Double-hull | MI | Spot      market |
| Oliva      (Ex Ariake)                      | 2001   | 299,000 | Double-hull | IoM | Bareboat      charter |
| Front      Serenade                         | 2002   | 299,000 | Double-hull | LIB | Time      charter |
| Otina      (Ex Hakata)                      | 2002   | 298,000 | Double-hull | IoM | Bareboat      charter |
| Ondina      (Ex Front Stratus)              | 2002   | 299,000 | Double-hull | IoM | Bareboat      charter |
| Front      Falcon                           | 2002   | 309,000 | Double-hull | BA | Spot      market |
| Front      Page                             | 2002   | 299,000 | Double-hull | LIB | Time      charter |
| Front      Energy                           | 2004   | 305,000 | Double-hull | CYP | Spot      market |
| Front      Force                            | 2004   | 305,000 | Double-hull | CYP | Spot      market |
|                                        |   |    |   |   |   |
| Suezmax OBO Carriers                        |   |    |   |   |   |
| Front      Breaker                          | 1991   | 169,000 | Double-hull | MI | Time      charter |
| Front      Climber                          | 1991   | 169,000 | Double-hull | SG | Time      charter |
| Front      Driver                           | 1991   | 169,000 | Double-hull | MI | Time      charter |
| Front      Guider                           | 1991   | 169,000 | Double-hull | SG | Time      charter |
| Front      Leader                           | 1991   | 169,000 | Double-hull | SG | Time      charter |
| Front      Rider                            | 1992   | 169,000 | Double-hull | SG | Time      charter |
| Front      Striver                          | 1992   | 169,000 | Double-hull | SG | Time      charter |
| Front      Viewer                           | 1992   | 169,000 | Double-hull | SG | Time      charter |
|                                        |   |    |   |   |   |
| Suezmax Tankers                             |   |    |   |   |   |
| Front      Pride                            | 1993   | 150,000 | Double-hull | NIS | Spot      market |
| Front      Glory                            | 1995   | 150,000 | Double-hull | NIS | Spot      market |
| Front      Splendour                        | 1995   | 150,000 | Double-hull | NIS | Spot      market |

----

| Suezmax Tankers                                          |   |    |        |   |                  |
|----------------------------------------------------------|--------|---------|-------------|--------|-----------------------|
| Front      Ardenne                                       | 1997   | 150,000 | Double-hull | NIS    | Spot      market      |
| Front      Brabant                                       | 1998   | 150,000 | Double-hull | NIS    | Spot      market      |
| Mindanao                                                 | 1998   | 150,000 | Double-hull | SG     | Spot      market      |
|                                                     |   |    |        |   |                  |
|   Tonnage chartered in from Third      Parties |
|                                                     |   |    |        |   |                  |
| VLCCs                                                    |   |    |        |   |                  |
| Front      Chief                                         | 1999   | 311,000 | Double-hull | BA     | Spot      market      |
| Front      Commander                                     | 1999   | 311,000 | Double-hull | BA     | Spot      market      |
| Front      Crown                                         | 1999   | 311,000 | Double-hull | BA     | Spot      market      |
| British      Pioneer                                     | 1999   | 307,000 | Double-hull | IoM    | Bareboat      charter |
| British      Pride                                       | 2000   | 307,000 | Double-hull | IoM    | Bareboat      charter |
| British      Progress                                    | 2000   | 307,000 | Double-hull | IoM    | Bareboat      charter |
| British      Purpose                                     | 2000   | 307,000 | Double-hull | IoM    | Bareboat      charter |
| Front      Tina                                          | 2000   | 299,000 | Double-hull | LIB    | Spot      market      |
| Front      Commodore                                     | 2000   | 299,000 | Double-hull | LIB    | Time      charter     |
| Front      Eagle                                         | 2002   | 309,000 | Double-hull | BA     | Spot      market      |
| Cosglory      Lake                                       | 2003   | 299,145 | Double-hull | PAN    | Spot      market      |
| Hampstead                                                | 1996   | 298,000 | Double-hull | IoM    | Time      charter     |
| Kensington                                               | 1995   | 298,000 | Double-hull | IoM    | Time      charter     |
|                                                     |   |    |        |   |                  |
| Suezmax Tankers                                          |   |    |        |   |                  |
| Front      Warrior                                       | 1998   | 153,000 | Double-hull | BA     | Spot      market      |
| Front      Melody                                        | 2001   | 150,000 | Double-hull | LIB    | Spot      market      |
| Front      Symphony                                      | 2001   | 150,000 | Double-hull | LIB    | Time      charter     |
| Marble                                                   | 1992   | 150,000 | Single-hull | MI     | Spot      market      |
| Nordic      Apollo (**)                                  | 2003   | 149,997 | Double-hull | MI     | Spot      market      |
| Nordic      Discovery (**)                               | 1998   | 149,999 | Double-hull | NIS    | Spot      market      |
| Nordic      Fighter (**)                                 | 1998   | 149,999 | Double-hull | NIS    | Spot      market      |
| Nordic      Hawk (**)                                    | 1997   | 151,475 | Double-hull | BA     | Spot      market      |
| Nordic      Hunter (**)                                  | 1997   | 151,400 | Double-hull | BA     | Spot      market      |
| Nordic      Saturn (**)                                  | 1998   | 157,332 | Double-hull | MI     | Spot      market      |
|                                                     |   |    |        |   |                  |
| Tonnage under Commercial      Management                 |   |    |        |   |
| VLCC                                                     |   |    |        |   |                  |
| Mayfair                                                  | 1995   | 298,405 | Double-hull | MI     | Time      charter     |
| Camden                                                   | 1995   | 298,306 | Double-hull | MI     | Time      charter     |
| Songa      Chelsea                                       | 1995   | 298,432 | Double-hull | MI     | Spot      market      |
| Bunga      Kasturi Dua                                   | 2005   | 300,542 | Double-hull | MAL    | Spot      market      |
| Universal      Queen                                     | 2005   | 309,373 | Double-hull | PAN    | Spot      market      |
|                                                     |   |    |        |   |                  |
| Aframax                                                  |   |    |        |   |                  |
| Sea      Leopard                                         | 1990   | 94,993  | Double-hull | MI     | Time      charter     |

----

|                                 |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|--------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| VLCCs                                |   |   |    |   |   |   |    |   |   |
| At      start of period              |   |   | 41      |   |   |   | 43      |   |   |   | 38 |   |
| Acquisitions                         |   |   | 2       |   |   |   | 2       |   |   |   | 5 |   |
| Dispositions                         |   |   | 1       |   |   |   | 4       |   |   |   | — |   |
| At      end of period                |   |   | 42      |   |   |   | 41      |   |   |   | 43 |   |
|                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| VLCCs      owned by equity investees |   |   |    |   |   |   |    |   |   |   |   |   |
| At      start of period              |   |   | — |   |   |   | — |   |   |   | 1 |   |
| Acquisitions                         |   |   | — |   |   |   | — |   |   |   | — |   |
| Dispositions                         |   |   | — |   |   |   | — |   |   |   | 1 |   |
| At      end of period                |   |   | — |   |   |   | — |   |   |   | — |   |

----

|                            |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|---------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                            |   |   |    |   |   |   |    |   |   |
| Suezmax                         |   |   |    |   |   |   |    |   |   |
| At      start of period         |   |   | 23      |   |   |   | 23      |   |   |   | 28 |   |
| Acquisitions                    |   |   | — |   |   |   | — |   |   |   | — |   |
| Dispositions                    |   |   | 7       |   |   |   | — |   |   |   | 5 |   |
| At      end of period           |   |   | 16      |   |   |   | 23      |   |   |   | 23 |   |
|                            |   |   |    |   |   |   |    |   |   |   |   |   |
| Suezmax      OBOs               |   |   |    |   |   |   |    |   |   |   |   |   |
| At      start and end of period |   |   | 8       |   |   |   | 8       |   |   |   | 8 |   |
|                            |   |   |    |   |   |   |    |   |   |   |   |   |
| Aframax                         |   |   |    |   |   |   |    |   |   |   |   |   |
| At      start of period         |   |   | 1       |   |   |   | — |   |   |   | — |   |
| Acquisitions                    |   |   | — |   |   |   | 1       |   |   |   | — |   |
| Dispositions                    |   |   | 1       |   |   |   | — |   |   |   | — |   |
| At      end of period           |   |   | — |   |   |   | 1       |   |   |   | — |   |
|                            |   |   |    |   |   |   |    |   |   |   |   |   |
| Drybulk                         |   |   |    |   |   |   |    |   |   |   |   |   |
| At      start of period         |   |   | — |   |   |   | — |   |   |   | 1 |   |
| Dispositions                    |   |   | — |   |   |   | — |   |   |   | 1 |   |
| At      end of period           |   |   | — |   |   |   | — |   |   |   | — |   |
|                            |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      fleet                |   |   |    |   |   |   |    |   |   |   |   |   |
| At      start of period         |   |   | 73      |   |   |   | 74      |   |   |   | 76 |   |
| Acquisitions                    |   |   | 2       |   |   |   | 3       |   |   |   | 5 |   |
| Dispositions                    |   |   | 9       |   |   |   | 4       |   |   |   | 7 |   |
| At      end of period           |   |   | 66      |   |   |   | 73      |   |   |   | 74 |   |

|                  |   | As      of December 31, |    |
|-----------------------|--------|-------------------------|---------|
|                  |   | 2007                    |    |   | 2006 |   |   | 2005 |   |
|                  |   | Number      of vessels  |    |   | Percentage      of fleet |   |   | Number      of vessels |   |   | Percentage      of fleet |   |   | Number      of vessels |   |   | Percentage      of fleet |   |
| VLCCs                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Spot      or pool     |   |                    | 17      |   |   |   | 40 | % |   |   | 18 |   |   |   | 44 | % |   |   | 29 |   |   |   | 67 | % |
| Time      charter     |   |                    | 15      |   |   |   | 36 | % |   |   | 13 |   |   |   | 32 | % |   |   | 9 |   |   |   | 21 | % |
| Bareboat      charter |   |                    | 10      |   |   |   | 24 | % |   |   | 10 |   |   |   | 24 | % |   |   | 5 |   |   |   | 12 | % |
| Total                 |   |                    | 42      |   |   |   | 100 | % |   |   | 41 |   |   |   | 100 | % |   |   | 43 |   |   |   | 100 | % |
|                  |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Suezmax               |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Spot      or pool     |   |                    | 12      |   |   |   | 75 | % |   |   | 16 |   |   |   | 70 | % |   |   | 22 |   |   |   | 96 | % |
| Time      charter     |   |                    | 1       |   |   |   | 6 | % |   |   | 3 |   |   |   | 13 | % |   |   | 1 |   |   |   | 4 | % |
| Bareboat      charter |   |                    | 3       |   |   |   | 19 | % |   |   | 3 |   |   |   | 13 | % |   |   | — |   |   |   | — |   |
| Under      Conversion |   |                    | — |   |   |   | — |   |   |   | 1 |   |   |   | 4 | % |   |   | — |   |   |   | — |   |
| Total                 |   |                    | 16      |   |   |   | 100 | % |   |   | 23 |   |   |   | 100 | % |   |   | 23 |   |   |   | 100 | % |
|                  |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Aframax               |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Under      Conversion |   |                    | — |   |   |   | — |   |   |   | 1 |   |   |   | 100 | % |   |   | — |   |   |   | — |   |
| Total                 |   |                    | — |   |   |   | — |   |   |   | 1 |   |   |   | 100 | % |   |   | — |   |   |   | — |   |

----

|                  |   | As      of December 31, |    |
|-----------------------|--------|-------------------------|---------|
|                  |   | 2007                    |    |   | 2006 |   |   | 2005 |   |
|                  |   | Number      of vessels  |    |   | Percentage      of fleet |   |   | Number      of vessels |   |   | Percentage      of fleet |   |   | Number      of vessels |   |   | Percentage      of fleet |   |
|                  |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Suezmax      OBOs     |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Time      charter     |   |                    | 8       |   |   |   | 100 | % |   |   | 8 |   |   |   | 100 | % |   |   | 8 |   |   |   | 100 | % |
| Total                 |   |                    | 8       |   |   |   | 100 | % |   |   | 8 |   |   |   | 100 | % |   |   | 8 |   |   |   | 100 | % |
|                  |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      fleet      |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Spot      or pool     |   |                    | 29      |   |   |   | 44 | % |   |   | 34 |   |   |   | 47 | % |   |   | 51 |   |   |   | 69 | % |
| Time      charter     |   |                    | 24      |   |   |   | 36 | % |   |   | 24 |   |   |   | 32 | % |   |   | 18 |   |   |   | 24 | % |
| Bareboat      charter |   |                    | 13      |   |   |   | 20 | % |   |   | 13 |   |   |   | 18 | % |   |   | 5 |   |   |   | 7 | % |
| Under      Conversion |   |                    | — |   |   |   | — |   |   |   | 2 |   |   |   | 3 | % |   |   | — |   |   |   | — |   |
| Total                 |   |                    | 66      |   |   |   | 100 | % |   |   | 73 |   |   |   | 100 | % |   |   | 74 |   |   |   | 100 | % |

----

----

| ·   | Vessels      leased from Ship Finance, which were previously reported as wholly owned      are reported as vessels held under capital  lease. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Capital      lease obligations with Ship Finance, which were previously eliminated on      consolidation are reported as liabilities with the related interest      recorded in the income statement. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Debt      incurred by Ship Finance, which was previously reported as debt of the      Company is no longer reported. |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| ·   | Derivative      instruments held by Ship Finance are no longer  reported. |
|--------------------|---------------------------------------------------------------------------|

| ·   | Minority      interest expense relating to Ship Finance is no longer      reported. |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | Profit      share expense relating to amounts due to Ship Finance is shown in the      income statement. |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | Results      from Ship Finance’s container ships, jack-up rigs and Panamax vessels are      no longer reported in the Company’s consolidated  results |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | the      earnings of our vessels in the chartermarket; |
|--------------------|--------------------------------------------------------|

| ·   | gains      from the sale of assets; |
|--------------------|-------------------------------------|

| ·   | vessel      operating expenses; |
|--------------------|---------------------------------|

| ·   | profit      share expense; |
|--------------------|----------------------------|

| ·   | administrative      expenses; |
|--------------------|-------------------------------|

| ·   | depreciation; |
|--------------------|---------------|

| ·   | interest      expense; |
|--------------------|------------------------|

----

|                           |   | Year      ended December 31, |      |   | Change |   |
|--------------------------------|--------|------------------------------|-----------|--------|--------|--------|
| (in      thousands of $)       |   | 2007                         |      |   | 2006   |   |   |  $ |   |   |   | % |   |
| Voyage      charter revenues   |   |                         | 801,546   |   |   |   | 1,114,531 |   |   |   | (312,985 | ) |   |   | (28 | ) |
| Time      charter revenues     |   |                         | 432,813   |   |   |   | 352,575 |   |   |   | 80,238 |   |   |   | 23 |   |
| Bareboat      charter revenues |   |                         | 57,052    |   |   |   | 85,969 |   |   |   | (28,917 | ) |   |   | (34 | ) |
| Other      income              |   |                         | 8,516     |   |   |   | 5,294 |   |   |   | 3,222 |   |   |   | 61 |   |
| Total      operating revenues  |   |                         | 1,299,927 |   |   |   | 1,558,369 |   |   |   | (258,442 | ) |   |   | (17 | ) |

----

| ·   | A      reduction in trading days due to the sale of three vessels in 2006 and      three vessels in 2007, which resulted in a decrease of $68.4 million in      2007. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Switching  the      employment of four VLCCs from the spot voyage market to time charters in      the second quarter of 2006 resulted in a decrease of $49.2 million in      2007. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Aframax Front Puffin stopped trading at the end of 2006 when conversion      into an FPSO commenced. Front Puffin spot voyage revenue in 2006 was $2.8      million. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      sale of a single hull Suezmax in March 2007 and the delivery of three      single hull Suezmaxes to shipyards for conversion to heavy lift vessels      during 2007. The single hull Suezmax Front Sunda was delivered for      conversion in 2006. These transactions resulted in a decrease in spot      voyage revenues of $33.0 million. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      2007, seven vessels (three Suezmax double hulls, one Suezmax single hull      and three VLCC double hulls) changed employment from spot voyage to time      charter resulting in a decrease in voyage charter revenues of $71.2      million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | TCE      rates decreased in 2007 compared to 2006 contributing to a general      decrease in voyage charter revenues.  The TCE earned in 2007 for      our double hull Suezmaxes was approximately $41,100 compared to $49,900 in      2006 and single hull Suezmax average daily rate earned in 2007 was $22,900      compared to $29,100 in 2006.  The average daily rate earned for      our double hull VLCCs in 2007 was $48,200 compared to $67,600 in 2006 and      the single hull VLCC average daily rate earned in 2007 was $37,600      compared to $54,100 in 2006. The rates earned highlight a continuing      differential in market rates for single and double hull      vessels. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      OBO’s were fixed on new time charters with higher prevailing rates      resulting in an increase in revenues of $25.0  million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      2007, we chartered in two VLCCs and subsequently chartered these vessels      out on time charters which contributed to an increase in revenues of $17.6      million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Two      VLCCs which were previously employed on bareboat charters and four VLCCs      which were previously employed on spot voyages began time charters during      the first six months of 2006 resulting in an increase in time charter      revenues of $20.4 million.  The earnings on these time charters      are based on the vessels’ actual earnings by the  charterer. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      the year, seven vessels changed employment from spot voyage to time      charter resulting in an increase in time charter revenues of $25.2      million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  (in      $ per day) |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | 2004   |   |   | 2003   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| VLCC                      |   |   | 45,700 |   |   |   | 56,800 |   |   |   | 57,400 |   |   |   | 78,000 |   |   |   | 42,300 |   |
| Suezmax                   |   |   | 33,000 |   |   |   | 37,800 |   |   |   | 40,300 |   |   |   | 57,900 |   |   |   | 33,900 |   |
| Suezmax      OBO          |   |   | 39,700 |   |   |   | 31,700 |   |   |   | 34,900 |   |   |   | 27,900 |   |   |   | 31,900 |   |

|                        |   | Year      ended December 31, |    |   | Change |   |
|-----------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $)    |   | 2007                         |    |   | 2006   |   |   | $ |   |   |  | % |   |
| Gain      on sale of assets |   |                         | 118,168 |   |   |   | 95,655 |   |   |   | 22,513 |   |   |   | 24 |   |

|                     |   | Year      ended December 31, |    |   | Change |   |
|--------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $) |   | 2007                         |    |   | 2006   |   |   |  $ |   |   |   | % |   |
| Suezmax      OBO         |   |                         | 24,064  |   |   |   | 32,111 |   |   |   | (8,047 | ) |   |   | (25 | ) |
| Suezmax                  |   |                         | 52,642  |   |   |   | 63,068 |   |   |   | (10,426 | ) |   |   | (17 | ) |
| VLCC                     |   |                         | 119,552 |   |   |   | 97,274 |   |   |   | 22,278 |   |   |   | 23 |   |
| Aframax                  |   |                         | -       |   |   |   | 2,182 |   |   |   | (2,182 | ) |   |   | (100 | ) |
|                     |   |                         | 196,258 |   |   |   | 194,635 |   |   |   | 1,623 |   |   |   | 1 |   |

| ·   | In      2007, five Suezmaxes (two single hull and three double hull) were      drydocked compared with seven Suezmaxes (five single hulls and two double      hulls) in 2006 which resulted in a decrease of $7.5 million in drydock      related expenses. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We      sold a single hull Suezmax in March 2007 and delivered three single hull      Suezmaxes to shipyards for conversion to heavy lift vessels during 2007.      All of these vessels reported a full year’s operating expenses in 2006      which resulted in a decrease of $4.0 million in 2007. The single hull      Suezmax Front Sunda was delivered for conversion in 2006 resulting in a      decrease in operating costs of $2.1 million in  2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      2007, nine VLCCs were drydocked (six double hulls and three single hulls)      compared to six in 2006 (three double hulls and three single hulls).      Operating costs for the vessels drydocked in 2007 increased by $22.7      million of which, $15.1 million relates to single hull vessels and $7.6      million relates to double hull vessels. This increase is partially offset      by a decrease in operating costs of $9.5 million for vessels drydocked in      2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In      early 2006, four vessels that were on bareboat charters were redelivered      and subsequently chartered out on time charters which contributed to an      increase in operating expenses of $3.3 million in  2007. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | One      VLCC was delivered in the third quarter of 2006 resulting in an increase      in costs of $1.5 million in 2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | We      sold three VLCCs during 2006 which has resulted in a decrease in operating      costs of $5.3 million. We sold another VLCC in June 2007 which has      resulted in only six months of operating costs being reported in 2007      compared to a full year in 2006 which contributed to a $1.3 million      decrease in operating costs |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                      |   | Year      ended December 31, |   |   | Change |   |
|---------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)  |   | 2007                         |   |   | 2006   |   |   |  $ |   |   |   | % |   |
| Profit      share expense |   |                         | 37,279 |   |   |   | — |   |   |   | 37,279 |   |   |   | — |   |

|                                                                           |   | Year      ended December 31, |       |   | Change |   |
|--------------------------------------------------------------------------------|--------|------------------------------|------------|--------|--------|--------|
| (in      thousands of $)                                                       |   | 2007                         |       |   | 2006   |   |   |  $ |   |   |   | % |   |
| Charterhire      expenses                                                      |   |                         | 56,868     |   |   |   | 24,923 |   |   |   | 31,945 |   |   |   | 128 |   |
|                                                                           |   |                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number      of vessels chartered in and accounted foras      operating leases: |   |                         | 2007  |   |   |   | 2006  |   |   |   |   |   |   |   |
| VLCC                                                                           |   |                         |  3    |   |   |   |  1 |   |   |   |   |   |   |   |   |   |
| Suezmax                                                                        |   |                         |  6    |   |   |   |  1 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |                         |  9    |   |   |   |  2 |   |   |   |   |   |   |   |   |   |

----

|                         |   | Year      ended December 31, |   |   | Change |   |
|------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)     |   | 2007                         |   |   | 2006   |   |   |  $ |   |   |  | % |   |
| Administrative      expenses |   |                         | 36,410 |   |   |   | 32,143 |   |   |   | 4,267 |   |   |   | 13 |   |

|                     |   | Year      ended December 31, |   |   | Change |   |
|--------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $) |   | 2007                         |   |   | 2006   |   |   | $ |   |   |   | % |   |
| Interest      income     |   |                         | 54,316 |   |   |   | 47,612 |   |   |   | 6,704 |   |   |   | 14 |   |

|                     |   | Year      ended December 31, |    |   | Change |   |
|--------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $) |   | 2007                         |    |   | 2006   |   |   | $ |   |   |  | % |   |
| Interest      expense    |   |                         | 204,535 |   |   |   | 200,396 |   |   |   | 4,139 |   |   |   | 2 |   |

|                                          |   | Year      ended December 31, |   |   | Change |   |
|-----------------------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)                      |   | 2007                         |   |   | 2006   |   |   |  $ |   |   |   | % |   |
| Share      of results of associated companies |   |                         | 573    |   |   |   | 1,118 |   |   |   | (545 | ) |   |   | (49 | ) |

|                                                      |   | Year      ended December 31, |    |   | Change |   |
|-----------------------------------------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $)                                  |   | 2007                         |    |   | 2006   |   |   | $ |   |   |   | % |   |
| Foreign      currency exchange gains                      |   |                         | 3,312   |   |   |   | 1,056 |   |   |   | 2,256 |   |   |   | 214 |   |
| Mark      to market adjustments for financial derivatives |   |                         | 3,541   |   |   |   | (2,735 | ) |   |   | 6,276 |   |   |   | — |   |
| Gains      and losses from freight forward agreements     |   |                         | (11     | )      |   |   | (8,162 | ) |   |   | (8,151 | ) |   |   | — |   |
| Dividends      received                                   |   |                         | 533     |   |   |   | 13,317 |   |   |   | (12,784 | ) |   |   | — |   |
| Gain      on sale of securities                           |   |                         | 122,120 |   |   |   | 9,782 |   |   |   | 112,338 |   |   |   | — |   |

| Other      financial items, net |   |   | 4,951 |   |   |   | (3,663 | ) |   |   | 8,614 |   |   |   | — |   |
|---------------------------------|--------|--------|-------|--------|--------|--------|--------|---|--------|--------|-------|--------|--------|--------|---------|--------|

----

|                                         |   | Year      ended December 31, |   |   | Change |   |
|----------------------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)                     |   | 2007                         |   |   | 2006   |   |   |  $ |   |   |   | % |   |
| Gain      on issuance of shares by associate |   |                         | 83,566 |   |   |   | — |   |   |   | 83,566 |   |   |   | — |   |

|                         |   | Year      ended December 31, |   |   | Change |   |
|------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)     |   | 2007                         |   |   | 2006   |   |   | $ |   |   |   | % |   |
| Discontinued      operations |   |                         | 5,442  |   |   |   | 13,514 |   |   |   | (8,072) |   |   |   | (60) |   |

|                           |   | Year      ended December 31, |      |   | Change |   |
|--------------------------------|--------|------------------------------|-----------|--------|--------|--------|
| (in      thousands of $)       |   | 2006                         |      |   | 2005   |   |   |  $ |   |   |  | % |   |
| Voyage      charter revenues   |   |                         | 1,114,531 |   |   |   | 1,152,245 |   |   |   | (37,714 | ) |   |   | (3 | ) |
| Time      charter revenues     |   |                         | 352,575   |   |   |   | 197,291 |   |   |   | 155,284 |   |   |   | 79 |   |
| Bareboat      charter revenues |   |                         | 85,969    |   |   |   | 142,562 |   |   |   | (56,593 | ) |   |   | (40 | ) |
| Other      income              |   |                         | 5,294     |   |   |   | 3,877 |   |   |   | 1,417 |   |   |   | 37 |   |
| Total      operating revenues  |   |                         | 1,558,369 |   |   |   | 1,495,975 |   |   |   | 62,394 |   |   |   | 4 |   |

----

| (in      thousands of $)                    |   | 2006   |    |   | 2005   |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|
| Pool      earnings allocated on gross basis |   |   | 131,099 |   |   |   | 128,726 |   |
| Pool      earnings allocated on net basis   |   |   | — |   |   |   | 25,015 |   |
| Total      pool earnings                    |   |   | 131,099 |   |   |   | 153,741 |   |

|                     |   | Year      ended December 31, |    |   | Change |   |
|--------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $) |   | 2006                         |    |   | 2005   |   |   |  $ |   |   |   | % |   |
| Suezmax      OBO         |   |                         | 32,111  |   |   |   | 17,658 |   |   |   | 14,453 |   |   |   | 82 |   |
| Suezmax                  |   |                         | 63,068  |   |   |   | 53,935 |   |   |   | 9,133 |   |   |   | 17 |   |
| VLCC                     |   |                         | 97,274  |   |   |   | 75,931 |   |   |   | 21,343 |   |   |   | 28 |   |
| Aframax                  |   |                         | 2,182   |   |   |   | — |   |   |   | 2,182 |   |   |   | — |   |
|                     |   |                         | 194,635 |   |   |   | 147,524 |   |   |   | 47,111 |   |   |   | 32 |   |

| ·   | An      increase in drydockings during the year from 10 vessels in 2005 to 19      vessels in 2006.  This resulted in an operating expense increase      of $27.8 million. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Costs      associated with the newly acquired Aframax vessel Front Puffin were $2.1      million before we started the conversion of this vessel to an FPSO      vessel. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Increased      commercial management fees of $3.4 million in relation to certain charters      beginning in 2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | General      increase of $15.9 million due to vessels acquired and delivered from      bareboat during 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | Vessel      sales did not result in a significant decline in ship operating expenses      due to vessels sold during the year being primarily bareboat      vessels. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                           |   | Year      ended December 31, |    |   | Change |   |
|--------------------------------------------------------------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $)                                                       |   | 2006                         |    |   | 2005   |   |   |  $ |   |   |   | % |   |
| Charterhire      expenses                                                      |   |                         | 24,923  |   |   |   | 11,711 |   |   |   | 13,212 |   |   |   | 113 |   |
|                                                                           |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number      of vessels chartered in and accounted foras      operating leases: |   |                         | 2006    |   |   |   |  2005 |   |   |   |   |   |   |   |
| VLCC                                                                           |   |                         |  1 |   |   |   |  — |   |   |   |   |   |   |   |   |   |
| Suezmax                                                                        |   |                         |  1 |   |   |   |  1 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |                         |  2 |   |   |   |  1 |   |   |   |   |   |   |   |   |   |

|                         |   | Year      ended December 31, |   |   | Change |   |
|------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)     |   | 2006                         |   |   | 2005   |   |   |  $ |   |   |   | % |   |
| Administrative      expenses |   |                         | 32,143 |   |   |   | 21,049 |   |   |   | 11,094 |   |   |   | 53 |   |

| ·   | $6.0      million due to increased salary costs as the result of an increase in      total employees and performance relatedbonuses, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.4      million due to an increase in professional fees in relation to corporate      transactions and Sarbanes-Oxley section 404  compliance, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $0.3      million due to increased rent costs,and |
|--------------------|---------------------------------------------------|

| ·   | $0.7      million due to increased travelcosts. |
|--------------------|-------------------------------------------------|

|                     |   | Year      ended December 31, |   |   | Change |   |
|--------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $) |   | 2006                         |   |   | 2005   |   |   |  $ |   |   |   | % |   |
| Interest      income     |   |                         | 47,612 |   |   |   | 40,840 |   |   |   | 6,772 |   |   |   | 17 |   |

|                     |   | Year      ended December 31, |    |   | Change |   |
|--------------------------|--------|------------------------------|---------|--------|--------|--------|
| (in      thousands of $) |   | 2006                         |    |   | 2005   |   |   |  $ |   |   |   | % |   |
| Interest      expense    |   |                         | 200,396 |   |   |   | 205,937 |   |   |   | (5,541) |   |   |   | (3) |   |

----

|                                          |   | Year      ended December 31, |   |   | Change |   |
|-----------------------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)                      |   | 2006                         |   |   | 2005   |   |   |  $ |   |   |   | % |   |
| Share      of results of associated companies |   |                         | 1,118  |   |   |   | 3,379 |   |   |   | (2,261) |   |   |   | (67) |   |

|                                 |   | Year      ended December 31, |   |   | Change |   |
|--------------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)             |   | 2006                         |   |   | 2005   |   |   | $ |   |   |   | % |   |
| Foreign      currency exchange gains |   |                         | 1,056  |   |   |   | 18,829 |   |   |   | (17,773) |   |   |   | (94) |   |

|                                                      |   | Year      ended December 31, |   |   | Change |   |
|-----------------------------------------------------------|--------|------------------------------|--------|--------|--------|--------|
| (in      thousands of $)                                  |   | 2006                         |   |   | 2005   |   |   | $ |   |   |   | % |   |
| Mark      to market adjustments for financial derivatives |   |                         | (2,735 | )      |   |   | 16,068 |   |   |   | (18,803 | ) |   |   | (117 | ) |
| Gains      and losses from freight forward agreements     |   |                         | (8,162 | )      |   |   | (1,569 | ) |   |   | (6,593 | ) |   |   | (420 | ) |
| Dividends      received                                   |   |                         | 13,317 |   |   |   | 1,540 |   |   |   | 11,777 |   |   |   | 765 |   |
| Gain      on sale of securities                           |   |                         | 9,782  |   |   |   | 28,035 |   |   |   | (18,253 | ) |   |   | (65 | ) |
| Other      financial items, net                           |   |                         | (3,663 | )      |   |   | 1,756 |   |   |   | (5,419 | ) |   |   | (309 | ) |

----

| ·   | recognise      100% of the fair values of acquired assets, including goodwill, and      assumed liabilities even if the acquirer has not acquired 100% of the      target entity |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | apply      fair value to contingent consideration arrangements at the acquisition      date |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | expense      transaction costs as incurred rather than including as part of the fair      value of an acquirer’s interest |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | fair      value certain pre-acquisition contingencies such as environmental or legal      issues |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | limit      the accrual of the costs for a restructuring plan in purchase      accounting |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | non      controlling interests are reported as an element of consolidated equity,      thereby removing the current practice of classifying minority interest      within the mezzanine section of the balance  sheet |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | reported      net income will consist of the total income of all consolidated      subsidiaries, with separate disclosure on the face of the income statement      of the split of that income between the controlling and non controlling      interests |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | movements      in the non controlling ownership interest amount will be accounted for as      equity transactions. If the controlling interest loses control and      deconsolidates a subsidiary, full gain or loss on the transition will be      recognised |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | non      controlling interests are required to be reclassified from the mezzanine      section to equity in the consolidated balance  sheet |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | consolidated      net income must be recast to include net income attributable to both      controlling and non controllinginterests. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                              |   | Payment      due by period      |    |
|-----------------------------------|--------|---------------------------------|---------|
| (In      thousands of $)          |   | Less      than 1      year |    |   | 1      – 3 years |   |   | 3      – 5 years |   |   | After      5 years |   |   | Total |   |
| Serial      notes (6.5% to 6.68%) |   |                            | 10,800  |   |   |   | 6,300 |   |   |   | - |   |   |   | - |   |   |   | 17,100 |   |
| Term      notes (7.84% to 8.04%)  |   |                            | 5,765   |   |   |   | 18,715 |   |   |   | 37,905 |   |   |   | 302,475 |   |   |   | 364,860 |   |
| Term      notes (8.52%)           |   |                            | -       |   |   |   | 1,174 |   |   |   | 1,640 |   |   |   | 8,514 |   |   |   | 11,328 |   |
| Other      long-term debt         |   |                            | 80,246  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 80,246 |   |
| Operating      lease obligations  |   |                            | 38,857  |   |   |   | 69,853 |   |   |   | 36,586 |   |   |   | 5,928 |   |   |   | 151,224 |   |
| Capital      lease obligations    |   |                            | 345,231 |   |   |   | 903,456 |   |   |   | 584,514 |   |   |   | 1,726,150 |   |   |   | 3,559,351 |   |
| Heavylift      commitments        |   |                            | 49,538  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 49,538 |   |
| Newbuilding      commitments      |   |                            | 243,390 |   |   |   | 636,798 |   |   |   | - |   |   |   | - |   |   |   | 880,188 |   |
| Total                             |   |                            | 773,827 |   |   |   | 1,636,296 |   |   |   | 660,645 |   |   |   | 2,043,067 |   |   |   | 5,113,835 |   |
|                              |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Name                      | Age | Position                                                              |
|---------------------------|-----|----------------------------------------------------------------------------|
| John      Fredriksen      | 63  | Chairman,      Chief Executive Officer, President  and  Director |
| Katherine      Fredriksen | 24  | Director                                                                   |
| Kate      Blankenship     | 43  | Director      and Audit Committee Chairman                                 |
| Frixos      Savvides      | 56  | Director      and Audit Committee member                                   |
| Bjørn    Sjaastad    | 50  | Chief      Executive Officer of Frontline Management AS                    |
| Inger      M. Klemp       | 45  | Chief      Financial Officer of Frontline ManagementAS                     |

----

----

|   Director      or Officer |   | Ordinary      Shares of      $2.50 each |       |   | %      of Ordinary Shares      Outstanding |   |         | Options      for Ordinary Shares of $2.50 each |   |
|--------------------------------------|--------|----------------------------------------------|------------|--------|-------------------------------------------------|--------|--------------|------------------------------------------------|--------|
|                                 |   |                                         |       |   |                                            |   |         |                                           |   |
| John      Fredriksen*                |   |                                         | 26,079,053 |   |                                            |   | 34.85%  |                                           |   |   | 100,000  |   |
| Katherine      Fredriksen            |   |                                         | -          |   |                                            |   | **      |                                           |   |   | 30,000  |   |
| Kate      Blankenship                |   |                                         | 2,000      |   |                                            |   | **      |                                           |   |   | 30,000  |   |
| Frixos      Savvides                 |   |                                         | -          |   |                                            |   | **      |                                           |   |   | 30,000  |   |
| Inger      M. Klemp                  |   |                                         | 16,000     |   |                                            |   | **      |                                           |   |   | 50,000  |   |
| Bjorn      Sjaastad***               |   |                                         | 43,333     |   |                                            |   | **      |                                           |   |   | 141,667  |   |

|  *          |  Includes      Ordinary Shares held by Hemen Holding Ltd. and other companies indirectly      controlled by Mr. John Fredriksen. |
|-----------------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                  |                                                                                                                                  |
|  **    |  Less than one      per cent                                                                                                     |
|                  |                                                                                                                                  |
|  ***   |  The number of      Ordinary Shares includes 33,333 options to acquire Ordinary Shares that      have vested.                    |

| ·   | All      options, with the exception of 100,000 held by Bjorn Sjaastad, vest over a      three year period beginning in February 2009 and expire in February 2013.      The exercise price of these options is NOK 243.00, which is reduced by the      amount of dividends paid after the date of  grant. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 100,000      of the options held by Bjorn Sjaastad began to vest in November 2007 and      expire in November 2011. 33,333 have vested at February 29, 2008. These      100,000 options had an exercise price of NOK 238.50 at the date of grant.      This exercise price is reduced by the amount of dividends paid after the      date of grant. The exercise price at December 31, 2007 of the options      which have vested is NOK162.36. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |              Ordinary Shares |       |
|------------------------------------------------------|-----------------------------------------------------------------|------------|
| Owner                                                | Amount                                                          |       |   |        % |
|                                                 |                                                            |       |   |   |   |   |
| Hemen      Holding Ltd. and associated companies (1) |                                                            | 26,079,053 |   |   | 34.85 | % |

| Barclays      Global Investors, NA. |   | 5,768,112 |   |   | 7.71 | % |
|-------------------------------------|--------|-----------|--------|--------|------|---|

| (1) | Hemen      Holding Ltd is a Cyprus holding company indirectly controlled by Mr. John      Fredriksen, who is our Chairman and Chief Executive    Officer. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in      thousands of $)                         |   | 2007   |      |
|--------------------------------------------------|--------|--------|-----------|
| Charterhire      paid (principal and interest)   |   |   | 273,239   |   |
| Payments      received for termination of leases |   |   | 29,343    |   |
| Profit      share expense                        |   |   | 37,279    |   |
| Remaining      lease obligation                  |   |   | 1,767,758 |   |

----

| Net      amounts earned from related parties            |   | Year      ended December 31, |   |
|---------------------------------------------------------|--------|------------------------------|--------|
| (in      thousands of $)                                |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
| Seatankers      Management Co. Ltd                      |   |                         | 582    |   |   |   | 432 |   |   |   | 265 |   |
| Golar      LNG Limited                                  |   |                         | 284    |   |   |   | 180 |   |   |   | 255 |   |
| Ship      Finance International Limited                 |   |                         | 1,525  |   |   |   | - |   |   |   | - |   |
| Norse      Energy Group ASA (formerly Northern Oil ASA) |   |                         | -      |   |   |   | - |   |   |   | 6 |   |
| Golden      Ocean Group Limited                         |   |                         | 2,099  |   |   |   | 597 |   |   |   | 362 |   |
| Individual      related to John Fredriksen              |   |                         | -      |   |   |   | 12 |   |   |   | - |   |
| Aktiv      Kapital First Investment Ltd                 |   |                         | -      |   |   |   | - |   |   |   | 10 |   |
| Greenwich      Holdings Ltd                             |   |                         | 69     |   |   |   | - |   |   |   | - |   |
| Bryggegata      AS                                      |   |                         | (1,430 | ) |   |   | (1,021 | ) |   |   | (692 | ) |
| Seadrill      Limited                                   |   |                         | (52    | ) |   |   | 545 |   |   |   | (24 | ) |
| CalPetro      Tankers (Bahamas I) Limited               |   |                         | 40     |   |   |   | 40 |   |   |   | 38 |   |
| CalPetro      Tankers (Bahamas II) Limited              |   |                         | 40     |   |   |   | 40 |   |   |   | 38 |   |
| CalPetro      Tankers (Bahamas III) Limited             |   |                         | -      |   |   |   | - |   |   |   | 38 |   |
| CalPetro      Tankers (IOM) Limited                     |   |                         | 40     |   |   |   | 40 |   |   |   | 38 |   |

| Receivables      (payables) with related parties |   | As      of December 31, |    |
|--------------------------------------------------|--------|-------------------------|---------|
| (in      thousands of $)                         |   | 2007                    |    |   | 2006 |   |
| Ship      Finance International Limited          |   |                    | (36,718 | ) |   |   | - |   |
| Seatankers  Management      Co. Ltd    |   |                    | (900    | ) |   |   | 275 |   |
| Golar      LNG Limited                           |   |                    | 93      |   |   |   | (553 | ) |
| Northern      Offshore Ltd                       |   |                    | 13      |   |   |   | 49 |   |
| Golden      Ocean Group Limited                  |   |                    | 1,160   |   |   |   | 942 |   |
| Seadrill      Limited                            |   |                    | 73      |   |   |   | 30 |   |
| Greenwich      Holdings                          |   |                    | 51      |   |   |   | - |   |
| CalPetro      Tankers (Bahamas I) Limited        |   |                    | 13      |   |   |   | 10 |   |
| CalPetro      Tankers (Bahamas II) Limited       |   |                    | 13      |   |   |   | 10 |   |
| CalPetro      Tankers (IOM) Limited              |   |                    | 13      |   |   |   | 10 |   |

----

----

| Payment      Date       |   | Amount      per Share |   |
|-------------------------|--------|-----------------------|--------|
|                    |   |                  |   |
| 2005                    |   |                  |   |
| March      18, 2005     |   | $                     | 3.50   |   |
| June      24, 2005      |   | $                     | 3.10   |   |
| September      20, 2005 |   | $                     | 2.00   |   |
| December      13, 2005  |   | $                     | 1.50   |   |
|                    |   |                  |   |   |
| 2006                    |   |                  |   |   |
| March      20, 2006     |   | $                     | 1.50   |   |
| June      26, 2006      |   | $                     | 1.50   |   |
| September      18, 2006 |   | $                     | 1.50   |   |
| December      21, 2006  |   | $                     | 2.50   |   |
|                    |   |                  |   |   |
| 2007                    |   |                  |   |   |
| March      22, 2007     |   | $                     | 2.05   |   |
| June      22, 2007      |   | $                     | 1.50   |   |
| October      24, 2007   |   | $                     | 1.50   |   |
| October      24, 2007   |   | $                     | 1.75   |   |
| December      12 2007   |   | $                     | 1.50   |   |

|                                |   | NYSE   |   | OSE    |
|-------------------------------------|--------|--------|--------|--------|
|                                |   | High   |   |   | Low |   |   | High |   | Low |
| Fiscal      year ended December 31, |   |   |   |   |   |   |   |   |
| 2007                                |   | $      | 53.09  |   |   | $ | 29.35 |   | NOK306.00 | NOK183.75 |
| 2006                                |   | $      | 44.65  |   |   | $ | 28.80 |   | NOK280.00 | NOK184.00 |
| 2005                                |   | $      | 57.97  |   |   | $ | 35.89 |   | NOK355.00 | NOK230.00 |
| 2004                                |   | $      | 62.33  |   |   | $ | 24.36 |   | NOK367.81 | NOK158.06 |
| 2003                                |   | $      | 27.69  |   |   | $ | 8.93 |   | NOK185.00 | NOK61.00 |

----

|                                     |   | NYSE   |   | OSE    |
|------------------------------------------|--------|--------|--------|--------|
|                                     |   | High   |   |   | Low |   |   | High |   | Low |
| Fiscal      year ended December 31,2007  |   |   |   |   |   |   |   |   |
| First      quarter                       |   | $      | 36.55  |   |   | $ | 29.35 |   | NOK224.75 | NOK183.75 |
| Second      quarter                      |   | $      | 47.94  |   |   | $ | 34.26 |   | NOK286.00 | NOK205.75 |
| Third      quarter                       |   | $      | 53.09  |   |   | $ | 38.25 |   | NOK306.00 | NOK232.00 |
| Fourth      quarter                      |   | $      | 51.06  |   |   | $ | 37.49 |   | NOK278.00 | NOK204.00 |
|                                     |   |   |   |   |   |   |   |   |   |   |
| Fiscal      year ended December 31, 2006 |   |   |   |   |   |   |   |   |   |   |
| First      quarter                       |   | $      | 41.29  |   |   | $ | 32.70 |   | NOK270.50 | NOK218.00 |
| Second      quarter                      |   | $      | 38.25  |   |   | $ | 28.80 |   | NOK237.50 | NOK184.00 |
| Third      quarter                       |   | $      | 44.65  |   |   | $ | 36.32 |   | NOK280.00 | NOK228.50 |
| Fourth      quarter                      |   | $      | 39.76  |   |   | $ | 31.63 |   | NOK254.50 | NOK196.75 |

|                  |   | NYSE    |   | OSE    |
|-----------------------|--------|---------|--------|--------|
|                  |   | High    |   |   | Low |   |   | High |   | Low |
| April      2008  |   | $  | 56.70  |   |   | $ | 46.34 |   | NOK287.50 |  NOK231.50 |
| March      2008       |   | $       | 47.05  |   |   | $ | 41.15 |   | NOK239.75 | NOK214.00 |
| February      2008    |   | $       | 49.33  |   |   | $ | 40.00 |   | NOK263.50 | NOK218.50 |
| January      2008     |   | $       | 49.66  |   |   | $ | 34.00 |   | NOK268.00 | NOK180.00 |
| December      2007    |   | $       | 49.00  |   |   | $ | 42.67 |   | NOK272.00 | NOK232.00 |
| November      2007    |   | $       | 48.96  |   |   | $ | 37.49 |   | NOK268.00 | NOK204.00 |

| ITEM      10. | ADDITIONAL      INFORMATION |
|---------------|-----------------------------|

----

----

| Year                 |   | VLCC   |   |   | Suezmax |   |
|----------------------|--------|--------|--------|--------|---------|--------|
|                 |   |   |   |   |    |   |
| 2007      to 2010    |   | $      | 25,175 |   |    | $      | 20,700 |   |
| 2011      and beyond |   | $      | 24,175 |   |    | $      | 19,700 |   |

----

| Vessel              |   | 2007      to 2010 |   |   | 2011      to 2018 |   |   | 2019      and beyond |   |
|---------------------|--------|-------------------|--------|--------|-------------------|--------|--------|----------------------|--------|
|                |   |              |   |   |              |   |   |                 |   |
| Front      Champion |   | $                 | 31,140 |   |              | $      | 30,640 |                 |   | $ | 28,464 |   |
| Front      Century  |   | $                 | 31,301 |   |              | $      | 30,801 |                 |   | $ | 28,625 |   |
| Golden      Victory |   | $                 | 33,793 |   |              | $      | 33,793 |                 |   | $ | 33,793 |   |
| Front      Energy   |   | $                 | 30,014 |   |              | $      | 30,014 |                 |   | $ | 30,014 |   |
| Front      Force    |   | $                 | 29,853 |   |              | $      | 29,853 |                 |   | $ | 29,853 |   |

----

| ·   | amend      its organizational documents in a manner that would adversely affect Ship      Finance; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | violate      its organizational documents; |
|--------------------|--------------------------------------------|

| ·   | engage      in businesses other than the operation and chartering of Ship Finance      vessels;  (not |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

|   | applicable      for Frontline Shipping II) |
|--------|--------------------------------------------|

| ·   | incur      debt, other than in the ordinary course of  business; |
|--------------------|------------------------------------------------------------------|

| ·   | sell      all or substantially all of its assets or the assets of any of its      subsidiaries or enter into any merger, consolidation or business      combination transaction; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | enter      into transactions with affiliates, other than on an arm’s-length      basis; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | permit      the incurrence of any liens on any of its assets, other than liens      incurred in the ordinary course ofbusiness; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | issue      any capital stock to any person or entity other than Frontline;      and |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | make      any investments in, provide loans or advances to, or grant guarantees for      the benefit of any person or entity other than in the ordinary course of      business. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the      relevant Charterer materially breaches any of its obligations under any of      the charters, including the failure to make charterhire payments when due,      subject to Frontline Shipping’s deferral rights explained      above, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      relevant Charterer or Frontline materially breaches any of its obligations      under the charter ancillary agreement or the Frontline performance      guarantee, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Frontline      Management materially breaches any of its obligations under any of the      management agreements or |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | Frontline      Shipping and Frontline Shipping II fails at any time to hold at least      $55 million or $7.5 million in cash and cash equivalents,      respectively. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | terminate      any or all of the charters with the relevant  Charterer, |
|--------------------|-------------------------------------------------------------------------|

| ·   | foreclose      on any or all of our security interests described above with respect to      the relevant charterer and/or |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | pursue      any other available rights orremedies. |
|--------------------|----------------------------------------------------|

----

----

----

|   | (i) | It      is organised in a qualified foreign country which is one that grants an      equivalent exemption from tax to corporations organised in the United      States in respect of the shipping income for which exemption is being      claimed under Section 883 (a “qualified foreign country”) and which      the Company refers to as the “country of organisation requirement”;      and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | It      can satisfy any one of the following two stock ownership requirements      for more than half the days during the taxable  year: |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      Company’s stock is “primarily and regularly” traded on an established      securities market located in the United States or a qualified foreign      country, which the Company refers to as the “Publicly-Traded Test”;      or |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | more      than 50% of the Company’s stock, in terms of value, is beneficially owned      by any combination of one or more individuals who are residents of a      qualified foreign country or foreign corporations that satisfy the country      of organisation requirement and the Publicly-Traded Test, which the      Company refers to as the “50% OwnershipTest.” |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | at      least 75% of our gross income for such taxable year consists of passive      income (e.g., dividends, interest, capital gains and rents derived other      than in the active conduct of a rental business),  or |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | at      least 50% of the average value of the assets held by the corporation      during such taxable year produce, or are held for the production of,      passive income. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | the      excess distribution or gain would be allocated ratably over the      Non-Electing Holders’ aggregate holding period for the common      stock; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      amount allocated to the current taxable year and any taxable years before      the Company became a PFIC would be taxed as ordinary income;      and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      amount allocated to each of the other taxable years would be subject to      tax at the highest rate of tax in effect for the applicable class of      taxpayer for that year, and an interest charge for the deemed deferral      benefit would be imposed with respect to the resulting tax attributable to      each such other taxable year. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | fail      to provide an accurate taxpayer identification  number; |
|--------------------|-------------------------------------------------------------------|

| ·   | are      notified by the Internal Revenue Service that you have failed to report      all interest or dividends required to be shown on your federal income tax      returns; or |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | in      certain circumstances, fail to comply with applicable certification      requirements. |
|--------------------|------------------------------------------------------------------------------------------------|

----

----

----

| ·   | Pertain      to the maintenance of records that, in reasonable detail, accurately and      fairly reflect the transactions and dispositions of the assets of the      Company; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that our receipts and expenditures are being      made only in accordance with authorizations of Company’s management and      directors; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use or disposition of our assets that could have      a material effect on the financialstatements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (in      thousands of $)    |   | 2007   |    |   | 2006   |   |
|-----------------------------|--------|--------|---------|--------|--------|--------|
| Audit      Fees (a)         |   |   | 1,166   |   |   |   | 2,014 |   |
| Audit-Related      Fees (b) |   |   | — |   |   |   | — |   |
| Tax      Fees (c)           |   |   | — |   |   |   | — |   |
| All      Other Fees (d)     |   |   | — |   |   |   | — |   |
| Total                       |   |   | 1,166   |   |   |   | 2,014 |   |

| (a) | Audit      Fees |
|-----|-----------------|

| (b) | Audit–Related      Fees |
|-----|-------------------------------|

| (c) | Tax      Fees |
|-----|---------------|

| (d) | All      Other Fees |
|-----|---------------------|

----

| Consolidated      Financial Statements of Frontline Ltd                                                                         |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                            |   |
| Index      to Consolidated Financial Statements of Frontline Ltd                                                                | F-1    |
|                                                                                                                            |   |
| Report      of Independent Registered Public Accounting Firm                                                                    | F-2    |
|                                                                                                                            |   |
| Report      of Independent Registered Public Accounting Firm                                                                    | F-4    |
|                                                                                                                            |   |
| Consolidated      Statements of Operations for the years ended December 31, 2007, 2006 and      2005                            | F-5    |
|                                                                                                                            |   |
| Consolidated      Balance Sheets as of December 31, 2007 and 2006                                                               | F-6    |
|                                                                                                                            |   |
| Consolidated      Statements of Cash Flows for the years ended December 31, 2007, 2006 and      2005                            | F-7    |
|                                                                                                                            |   |
| Consolidated      Statements of Changes in Stockholders’ Equity for the years ended December      31, 2007, 2006 and 2005 | F-8    |
|                                                                                                                            |   |
| Notes      to Consolidated Financial Statements                                                                                 | F-9    |

| Number | Description      of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 1.1*   | Memorandum      of Association of the Company, incorporated by reference to Exhibit 3.1 of      the Company’s Registration Statement on Form F-1, Registration No.      33-70158 filed on October 12, 1993 (the “Original Registration      Statement”).                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 1.2    | Amended      and Restated Bye-Laws of the Company as adopted by shareholders on      September 28, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.1*   | Form      of Ordinary Share Certificate, incorporated by reference to Exhibit 4.1 of      the Original Registration Statement.                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.2*   | Form      of Deposit Agreement dated as of November 24, 1993, among Frontline Ltd      (F/K/A London & Overseas Freighters Limited), The Bank of New York as      Depositary, and all Holders from time to time of American Depositary      Receipts issued there under, including form of ADR, incorporated by      reference to Exhibit 4.2 of the Original Registration      Statement.                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.3*   | Form      of Deposit Agreement dated as of November 24, 1993, as amended and      restated as of May 29, 2001, among Frontline Ltd (F/K/A London &      Overseas Freighters Limited), The Bank of New York as Depositary, and all      Holders from time to time of American Depositary Receipts issued there      under, including form of ADR, incorporated by reference to Exhibit 2      of the Company’s Annual Report on Form 20-F, filed on June 13,      2001 for the fiscal year ended December 31, 2000. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.4*   | Amendment      No. 1 to the Rights Agreement incorporated by reference to Exhibit 4.3 of      the Amalgamation Registration Statement.                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

| 2.5*   | The      Subregistrar Agreement related to the registration of certain securities      issued by Frontline Ltd in the Norwegian Registry of Securities between      Frontline Ltd and Christiania Bank og Kreditkasse ASA together with the      Form of Warrant Certificate and Conditions attaching thereto, incorporated      by reference to Exhibit 1.1 of the Company’s Annual Report on Form 20-F      for the fiscal year ended December 31, 1998. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.4*   | Master      Agreement, dated September 22, 1999, among Frontline AB and Frontline Ltd      (collectively “FL”), Acol Tankers Ltd. (“Tankers”), ICB Shipping AB      (“ICB”), and Ola Lorentzon (the “Agent”), incorporated by reference to      Exhibit 3.1 of the Company’s Annual Report on Form 20-F for the fiscal      year ended December 31, 1999.                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.6    | Charter      Ancillary Agreement between Frontline Ltd and Ship Finance International      Limited dated January 1, 2004.                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.7*   | Addendum      to Charter Ancillary Agreement between Frontline Ltd and Ship Finance      International Limited dated June 15, 2004 incorporated by reference to      Exhibit 10.3 of the Company’s Annual Report on From 20-F for the fiscal      year ended December 31, 2004.                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.8*   | Form      of Performance Guarantee issued by the Company incorporated by reference      to Exhibit 10.4 of the Company’s Annual Report on From 20-F for the fiscal      year ended December 31, 2004.                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.9*   | Form      of Time Charter incorporated by reference to Exhibit 10.5 of the Company’s      Annual Report on Form 20-F for the fiscal year ended December 31,      2004.                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.10*  | Form      of Vessel Management Agreements incorporated by reference to Exhibit 10.6      of the Company’s Annual Report on Form 20-F for the fiscal year ended      December 31, 2004.                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.11*  | Administrative      Services Agreement incorporated by reference to Exhibit 10.7 of the      Company’s Annual Report on Form 20-F for the fiscal year ended December      31, 2004.                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.12*  | Contribution      Agreement between Frontline Ltd and Golden Ocean Group Limited dated      November 29, 2004 incorporated by reference to Exhibit 10.8 of the      Company’s Annual Report on From 20-F for the fiscal year ended December      31, 2004.                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.13   | Second      Supplemental Purchase Agreement between Sealift Ltd., Southwest Tankers      Inc., Front Target Inc., Front Traveller Inc., West Tankers Inc., Granite      Shipping Ltd., Quadrant Marine Inc. and Frontline Ltd. dated April 27,      2007.                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.14   | Shareholder’s      Agreement Relating to Sealift Ltd dated April 27, 2007.                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.15   | Merger      Agreement between Dockwise Limited and Sealift Ltd dated April 27,      2007.                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.16   | Frontline      Ltd Share Option Scheme dated November 16, 2006.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.17   | Management      Agreement between Ship Finance International Limited and its subsidiaries      and Frontline Management (Bermuda) Ltd, dated November 29, 2007. (Replaces      Administrative Services Agreement dated December 31,  2004).                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.18   | Addendum      No. 3 to Charter Ancillary Agreement between Frontline Ltd, Ship Finance      International Limited and Frontline Shipping Ltd, dated August 21,      2007.                                                                                                                                                                                                                                                                                        |

----

|   |                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.19   | Addendum      No. 1 to Charter Ancillary Agreement between Frontline Ltd, Ship Finance      International Limited and Frontline Shipping II Ltd, dated August 21,      2007. |
|   |                                                                                                                                                                         |
| 8.1    | Subsidiaries      of the Company.                                                                                                                                            |
|   |                                                                                                                                                                         |
| 12.1   | Certification      of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule      15d-14(a) of the Securities Exchange Act, as amended.                         |
|   |                                                                                                                                                                         |
| 12.2   | Certification      of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule      15d-14(a) of the Securities Exchange Act, as amended.                         |
|   |                                                                                                                                                                         |
| 13.1   | Certification      of the Principal Executive Officer pursuant to 18 USC Section 1350, as      adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.      |
|   |                                                                                                                                                                         |
| 13.2   | Certification      of the Principal Financial Officer pursuant to 18 USC Section 1350, as      adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.      |

|   | *      Incorporated herein by reference. |
|--------|------------------------------------------|

----

|                                   |   | Frontline      Ltd |
|----------------------------------------|--------|--------------------|
|                                   |   | (Registrant)       |
|                                   |   |               |
| Date:       May 2,      2008 |   | By:                | /s/  Inger      M. Klemp |   |
|                                   |   |               | Name: | Inger      M. Klemp  |   |
|                                   |   |               | Title: | Chief      Financial Officer |   |

----

| Report      of Independent Registered Public Accounting Firm                                                                    | F-2    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                            |   |
| Report      of Independent Registered Public Accounting Firm                                                                    | F-4    |
|                                                                                                                            |   |
| Consolidated      Statements of Operations for the years ended December 31, 2007, 2006 and      2005                            | F-5    |
|                                                                                                                            |   |
| Consolidated      Balance Sheets as of December 31, 2007 and 2006                                                               | F-6    |
|                                                                                                                            |   |
| Consolidated      Statements of Cash Flows for the years ended December 31, 2007, 2006 and      2005                            | F-7    |
|                                                                                                                            |   |
| Consolidated      Statements of Changes in Stockholders’ Equity for the years ended December      31, 2007, 2006 and 2005 | F-8    |
|                                                                                                                            |   |
| Notes      to Consolidated Financial Statements                                                                                 | F-9    |

----

----

----

----

|                                                                                      |   | 2007   |      |   | 2006   |   |      | 2005   |   |
|-------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Operating      revenues                                                                   |   |   |      |   |   |   |      |   |   |
| Time      charter revenues                                                                |   |   | 432,813   |   |   |   | 352,575   |   |   |   | 197,291 |   |
| Bareboat      charter revenues                                                            |   |   | 57,052    |   |   |   | 85,969    |   |   |   | 142,562 |   |
| Voyage      charter revenues                                                              |   |   | 801,546   |   |   |   | 1,114,531 |   |   |   | 1,152,245 |   |
| Other      income                                                                         |   |   | 8,516     |   |   |   | 5,294     |   |   |   | 3,877 |   |
| Total      operating revenues                                                             |   |   | 1,299,927 |   |   |   | 1,558,369 |   |   |   | 1,495,975 |   |
| Gain      on sale of assets                                                               |   |   | 118,168   |   |   |   | 95,655    |   |   |   | 76,081 |   |
| Operating      expenses                                                                   |   |   |      |   |   |   |      |   |   |   |   |   |
| Voyage      expenses and commission                                                       |   |   | 352,451   |   |   |   | 399,046   |   |   |   | 336,963 |   |
| Ship      operating expenses                                                              |   |   | 196,258   |   |   |   | 194,635   |   |   |   | 147,524 |   |
| Profit      share expense                                                                 |   |   | 37,279    |   |   |   | -         |   |   |   | - |   |
| Charterhire      expenses                                                                 |   |   | 56,868    |   |   |   | 24,923    |   |   |   | 11,711 |   |
| Administrative      expenses                                                              |   |   | 36,410    |   |   |   | 32,143    |   |   |   | 21,049 |   |
| Depreciation                                                                              |   |   | 219,638   |   |   |   | 199,876   |   |   |   | 196,672 |   |
| Total      operating expenses                                                             |   |   | 898,904   |   |   |   | 850,623   |   |   |   | 713,919 |   |
| Net      operating income                                                                 |   |   | 519,191   |   |   |   | 803,401   |   |   |   | 858,137 |   |
| Other      income (expenses)                                                              |   |   |      |   |   |   |      |   |   |   |   |   |
| Interest      income                                                                      |   |   | 54,316    |   |   |   | 47,612    |   |   |   | 40,840 |   |
| Interest      expense                                                                     |   |   | (204,535  | )      |   |   | (200,396  | )      |   |   | (205,937 | ) |
| Equity      earnings of unconsolidated subsidiaries and associated      companies         |   |   | 573       |   |   |   | 1,118     |   |   |   | 3,379 |   |
| Foreign      currency exchange gain                                                       |   |   | 3,312     |   |   |   | 1,056     |   |   |   | 18,829 |   |
| Mark      to market of derivatives                                                        |   |   | 3,530     |   |   |   | (10,897   | )      |   |   | 14,499 |   |
| Gain      on sale of securities                                                           |   |   | 122,120   |   |   |   | 9,782     |   |   |   | 28,035 |   |
| Dividends      received                                                                   |   |   | 533       |   |   |   | 13,317    |   |   |   | 1,540 |   |
| Other      financial items, net                                                           |   |   | 4,951     |   |   |   | (3,663    | )      |   |   | 1,756 |   |
| Net      other expenses                                                                   |   |   | (15,200   | )      |   |   | (142,071  | )      |   |   | (97,059 | ) |
| Net      income from continuing operations before income taxes and minority      interest |   |   | 503,991   |   |   |   | 661,330   |   |   |   | 761,078 |   |
| Minority      interest                                                                    |   |   | (22,162   | )      |   |   | (158,682  | )      |   |   | (169,459 | ) |
| Income      tax (expense) benefit                                                         |   |   | (419      | )      |   |   | (162      | )      |   |   | 19 |   |
| Gain      on issuance of shares by subsidiaries and associates                            |   |   | 83,566    |   |   |   | -         |   |   |   | 1,105 |   |
| Net      income from continuing operations                                                |   |   | 564,976   |   |   |   | 502,486   |   |   |   | 592,743 |   |
| Discontinued      operations                                                              |   |   | 5,442     |   |   |   | 13,514    |   |   |   | 14,096 |   |
| Net      income                                                                           |   |   | 570,418   |   |   |   | 516,000   |   |   |   | 606,839 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Earnings      per share:                                                                  |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic      earnings per share from continuing operations                                  |   | $      | 7.55      |   |   | $      | 6.72      |   |   | $ | 7.92 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Diluted      earnings per share from continuing operations                                |   | $      | 7.55      |   |   | $      | 6.72      |   |   | $ | 7.92 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic      and diluted earnings per share from discontinuedoperations                     |   | $      | 0.07      |   |   | $      | 0.18      |   |   | $ | 0.19 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Basic      and diluted earnings per share                                                 |   | $      | 7.62      |   |   | $      | 6.90      |   |   | $ | 8.11 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Weighted      average shares outstanding, basic                                           |   |   | 74,825    |   |   |   | 74,825    |   |   |   | 74,825 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Weighted      average shares outstanding, diluted                                         |   |   | 74,867    |   |   |   | 74,825    |   |   |   | 74,825 |   |
|                                                                                      |   |   |      |   |   |   |      |   |   |   |   |   |
| Cash      dividends per share declared                                                    |   | $      | 8.30      |   |   | $      | 7.00      |   |   | $ | 10.10 |   |

----

|                                                                    |   | 2007   |      |   | 2006   |   |
|-------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| ASSETS                                                                  |   |   |      |   |   |   |
| Current      Assets                                                     |   |   |      |   |   |   |
| Cash      and cash equivalents                                          |   |   | 168,432   |   |   |   | 197,181 |   |
| Restricted      cash                                                    |   |   | 651,377   |   |   |   | 677,533 |   |
| Marketable      securities                                              |   |   | 15,684    |   |   |   | 1,469 |   |
| Trade      accounts receivable, net                                     |   |   | 59,523    |   |   |   | 59,728 |   |
| Related      party receivables                                          |   |   | 14,804    |   |   |   | 1,683 |   |
| Other      receivables                                                  |   |   | 28,564    |   |   |   | 37,335 |   |
| Inventories                                                             |   |   | 55,435    |   |   |   | 43,791 |   |
| Voyages      in progress                                                |   |   | 60,479    |   |   |   | 43,412 |   |
| Prepaid      expenses and accrued income                                |   |   | 8,424     |   |   |   | 11,900 |   |
| Net      investment in finance lease, current portion                   |   |   | -         |   |   |   | 23,608 |   |
| Derivative      instruments receivable amounts, short term              |   |   | -         |   |   |   | 2,931 |   |
| Other      current assets                                               |   |   | 64        |   |   |   | 11,571 |   |
| Total      current assets                                               |   |   | 1,062,786 |   |   |   | 1,112,142 |   |
| Newbuildings                                                            |   |   | 160,298   |   |   |   | 166,851 |   |
| Vessels      and equipment, net                                         |   |   | 208,516   |   |   |   | 2,446,278 |   |
| Vessels      and equipment under capital lease, net                     |   |   | 2,324,789 |   |   |   | 626,374 |   |
| Investment      in unconsolidated subsidiaries and associated companies |   |   | 5,633     |   |   |   | 17,825 |   |
| Net      investment in finance lease, long term portion                 |   |   | -         |   |   |   | 175,141 |   |
| Deferred      charges                                                   |   |   | 49        |   |   |   | 16,937 |   |
| Derivative      instruments receivable amounts, long term               |   |   | -         |   |   |   | 17,807 |   |
| Other      long-term assets                                             |   |   | 20        |   |   |   | 10,582 |   |
| Total      assets                                                       |   |   | 3,762,091 |   |   |   | 4,589,937 |   |
|                                                                    |   |   |      |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                         |   |   |      |   |   |   |   |   |
| Current      liabilities                                                |   |   |      |   |   |   |   |   |
| Short-term      debt and current portion of long-term debt              |   |   | 96,811    |   |   |   | 281,409 |   |
| Current      portion of obligations under capital leases                |   |   | 179,604   |   |   |   | 28,857 |   |
| Related      party payables                                             |   |   | 50,988    |   |   |   | 941 |   |
| Trade      accounts payable                                             |   |   | 16,043    |   |   |   | 17,573 |   |
| Accrued      expenses                                                   |   |   | 101,128   |   |   |   | 90,316 |   |
| Deferred      charter revenue                                           |   |   | 13,342    |   |   |   | 15,783 |   |
| Other      current liabilities                                          |   |   | 132,310   |   |   |   | 9,037 |   |
| Total      current liabilities                                          |   |   | 590,226   |   |   |   | 443,916 |   |
| Long-term      liabilities                                              |   |   |      |   |   |   |   |   |
| Long-term      debt                                                     |   |   | 376,723   |   |   |   | 2,181,885 |   |
| Obligations      under capital leases                                   |   |   | 2,318,794 |   |   |   | 723,073 |   |
| Deferred      gains on sales of vessels                                 |   |   | 19,810    |   |   |   | 21,732 |   |
| Derivative      instruments liabilities, long term                      |   |   | -         |   |   |   | 8,743 |   |
| Other      long-term liabilities                                        |   |   | 10,569    |   |   |   | 906 |   |
| Total      liabilities                                                  |   |   | 3,316,122 |   |   |   | 3,380,255 |   |
| Commitments      and contingencies                                      |   |   |      |   |   |   |   |   |
| Minority      interest                                                  |   |   | -         |   |   |   | 541,122 |   |
|                                                                    |   |   |      |   |   |   |   |   |
| Stockholders’      equity                                         |   |   |      |   |   |   |   |   |
| Share      capital (74,825,169 shares outstanding, par value $2.50)     |   |   | 187,063   |   |   |   | 187,063 |   |
| Additional      paid in capital                                         |   |   | 14,242    |   |   |   | 494,067 |   |
| Contributed      surplus                                                |   |   | 248,360   |   |   |   | (8,145 | ) |
| Accumulated      other comprehensive loss                               |   |   | (3,696    | )      |   |   | (4,425 | ) |
| Retained      earnings                                                  |   |   | -         |   |   |   | - |   |
| Total      stockholders’ equity                                   |   |   | 445,969   |   |   |   | 668,560 |   |
| Total      liabilities and stockholders’ equity                   |   |   | 3,762,091 |   |   |   | 4,589,937 |   |

----

|                                                                                        |   | 2007   |         |   | 2006   |   |     | 2005   |   |
|---------------------------------------------------------------------------------------------|--------|--------|--------------|--------|--------|--------|----------|--------|--------|
| Net      income                                                                             |   |   | 570,418      |   |   |   | 516,000  |   |   |   | 606,839 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |
| Depreciation                                                                                |   |   | 221,246      |   |   |   | 203,849  |   |   |   | 198,875 |   |
| Amortisation      of deferred charges                                                       |   |   | 810          |   |   |   | 3,346    |   |   |   | 16,705 |   |
| Gain      from sale of assets (including marketable securities)                             |   |   | (323,860     | )      |   |   | (105,439 | )      |   |   | (109,657 | ) |
| Equity      earnings of unconsolidated subsidiaries and associated      companies           |   |   | (573         | )      |   |   | (1,118   | )      |   |   | (3,380 | ) |
| Unrealised      foreign exchange loss (gain)                                                |   |   | 689          |   |   |   | 75       |   |   |   | (2,222 | ) |
| Adjustment      of derivatives to market value                                              |   |   | (3,541       | )      |   |   | 9,348    |   |   |   | (12,335 | ) |
| Minority      interest                                                                      |   |   | 22,162       |   |   |   | 158,682  |   |   |   | 169,459 |   |
| Other,      net                                                                             |   |   | (12,324      | )      |   |   | (5,326   | )      |   |   | (3,030 | ) |
| Changes      in operating assets and liabilities, net of effect of      acquisitions:       |   |
| Trade      accounts receivable                                                              |   |   | (1,208       | )      |   |   | 12,991   |   |   |   | 64,981 |   |
| Other      receivables                                                                      |   |   | 22,495       |   |   |   | (13,464  | )      |   |   | (6,493 | ) |
| Inventories                                                                                 |   |   | (11,772      | )      |   |   | 1,193    |   |   |   | (12,967 | ) |
| Voyages      in progress                                                                    |   |   | (17,068      | )      |   |   | 51,067   |   |   |   | 54,421 |   |
| Prepaid      expenses and accrued income                                                    |   |   | 3,341        |   |   |   | (4,231   | )      |   |   | 2,144 |   |
| Trade      accounts payable                                                                 |   |   | 47,830       |   |   |   | 8,191    |   |   |   | 1,114 |   |
| Accrued      expenses                                                                       |   |   | 17,241       |   |   |   | 4,777    |   |   |   | 7,126 |   |
| Deferred      charter revenue                                                               |   |   | 2,441        |   |   |   | 8,179    |   |   |   | 2,689 |   |
| Other,      net                                                                             |   |   | 7,483        |   |   |   | (16,564  | )      |   |   | 5,781 |   |
| Net      cash provided by operating activities                                              |   |   | 545,810      |   |   |   | 831,556  |   |   |   | 980,050 |   |
| Investing      activities                                                                   |   |   |         |   |   |   |     |   |   |   |   |   |
| Maturity      (placement) of restricted cash                                                |   |   | 12,674       |   |   |   | 13,730   |   |   |   | (44,183 | ) |
| Additions      to newbuildings, vessels and equipment                                       |   |   | (337,774     | )      |   |   | (569,819 | )      |   |   | (558,163 | ) |
| Proceeds      from sale of vessels and equipment                                            |   |   | 503,407      |   |   |   | 275,190  |   |   |   | 250,339 |   |
| Insurance      proceeds from loss of vessels and equipment                                  |   |   | -            |   |   |   | 12,173   |   |   |   | - |   |
| Investments      in associated companies                                                    |   |   | (60,510      | )      |   |   | (3,431   | )      |   |   | (2,610 | ) |
| Dividends      received from associated companies                                           |   |   | 255          |   |   |   | 1,318    |   |   |   | 20,911 |   |
| Purchase      of minority interest                                                          |   |   | -            |   |   |   | (7,198   | )      |   |   | (33,083 | ) |
| Proceeds      from sale of investments in associated companies                              |   |   | 116,631      |   |   |   | -        |   |   |   | - |   |
| Receipts      from finance leases and loans receivable                                      |   |   | 5,564        |   |   |   | 12,562   |   |   |   | 7,051 |   |
| Purchases      of other assets                                                              |   |   | (43,375      | )      |   |   | (71,067  | )      |   |   | (168,038 | ) |
| Proceeds      from sale of other assets                                                     |   |   | 162,392      |   |   |   | 154,409  |   |   |   | 152,752 |   |
| Proceeds      from issuance of shares in subsidiary                                         |   |   | -            |   |   |   | 7,800    |   |   |   | - |   |
| Proceeds      from sale of newbuilding contracts                                            |   |   | -            |   |   |   | 9,769    |   |   |   | 16,800 |   |
| Sale      of subsidiary, net of cash sold                                                   |   |   | 38,      308 |   |   |   | -        |   |   |   | - |   |
| Cash      effect of deconsolidation of subsidiary                                           |   |   | (146,435     | )      |   |   | -        |   |   |   | - |   |
| Net      cash provided by (used in) investing activities                                    |   |   | 251,137      |   |   |   | (164,564 | )      |   |   | (358,224 | ) |
| Financing      activities                                                                   |   |   |         |   |   |   |     |   |   |   |   |   |
| Proceeds      from long-term debt                                                           |   |   | 127,188      |   |   |   | 539,748  |   |   |   | 1,660,503 |   |
| Repayments      of long-term debt                                                           |   |   | (165,108     | )      |   |   | (420,925 | )      |   |   | (1,347,217 | ) |
| Payment      of obligations under capital leases                                            |   |   | (130,362     | )      |   |   | (24,706  | )      |   |   | (22,230 | ) |
| Debt      fees paid                                                                         |   |   | (1,406       | )      |   |   | (2,230   | )      |   |   | (7,405 | ) |
| Cash      dividends paid including amounts paid to minority interest                        |   |   | (656,008     | )      |   |   | (654,480 | )      |   |   | (909,574 | ) |
| Net      cash used in financing activities                                                  |   |   | (825,696     | )      |   |   | (562,593 | )      |   |   | (625,923 | ) |
| Net      (decrease)  increase in cash and cashequivalents                         |   |   | (28,749      | )      |   |   | 104,399  |   |   |   | (4,097 | ) |
| Cash      and cash equivalents at beginning of year                                         |   |   | 197,181      |   |   |   | 92,782   |   |   |   | 96,879 |   |
| Cash      and cash equivalents at end of year                                               |   |   | 168,432      |   |   |   | 197,181  |   |   |   | 92,782 |   |
| Supplemental      disclosure of cash flow information:                                      |   |   |         |   |   |   |     |   |   |   |   |   |
| Interest      paid, net of interest capitalized                                             |   |   | 206,495      |   |   |   | 207,610  |   |   |   | 225,053 |   |
| Income      taxes paid                                                                      |   |   | 215          |   |   |   | 62       |   |   |   | 46 |   |

----

|                                                                          |   | 2007   |       |   | 2006   |   |       | 2005   |
|-------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|
| NUMBER      OF SHARES OUTSTANDING                                             |   |   |       |   |   |   |       |
| Balance      at beginning  and end of year                          |   |   | 74,825,169 |   |   |   | 74,825,169 |   |   |   | 74,825,169 |   |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| SHARE      CAPITAL                                                            |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Balance      at beginning and end of year                                     |   |   | 187,063    |   |   |   | 187,063    |   |   |   | 187,063 |   |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| ADDITIONAL      PAID IN CAPITAL                                               |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Balance      at beginning of year                                             |   |   | 494,067    |   |   |   | 494,067    |   |   |   | 494,067 |   |   |
| Shares      issued                                                            |   |   | -          |   |   |   | -          |   |   |   | - |   |   |
| Shares      bought back and cancelled                                         |   |   | -          |   |   |   | -          |   |   |   | - |   |   |
| Stock      option expense                                                     |   |   | 962        |   |   |   | -          |   |   |   | - |   |   |
| Transfer      to contributed surplus                                          |   |   | (480,787   | )      |   |   | -          |   |   |   | - |   |   |
| Balance      at end of year                                                   |   |   | 14,242     |   |   |   | 494,067    |   |   |   | 494,067 |   |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| CONTRIBUTED      SURPLUS                                                      |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Balance      at beginning of year                                             |   |   | (8,145     | )      |   |   | 40,720     |   |   |   | 74,060 |   |   |
| Contribution      from related party                                          |   |   | -          |   |   |   | -          |   |   |   | 85,364 |   |   |
| Cash      dividends                                                           |   |   | (212,896   | )      |   |   | (35,634    | )      |   |   | (203,643 | ) |   |
| Minority      interest in deemed equity contributions and deemed    dividends |   |   | (11,386    | )      |   |   | (13,231    | )      |   |   | 84,939 |   |   |
| Transfer      from additional paid in capital                                 |   |   | 480,787    |   |   |   | -          |   |   |   | - |   |   |
| Balance      at end of year                                                   |   |   | 248,360    |   |   |   | (8,145     | )      |   |   | 40,720 |   |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| ACCUMULATED      OTHER COMPREHENSIVE LOSS                                     |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Balance      at beginning of year                                             |   |   | (4,425     | )      |   |   | (6,684     | )      |   |   | 5,414 |   |   |
| Other      comprehensive income (loss)                                        |   |   | 729        |   |   |   | 2,259      |   |   |   | (12,098 | ) |   |
| Balance      at end of year                                                   |   |   | (3,696     | )      |   |   | (4,425     | )      |   |   | (6,684 | ) |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| RETAINED      EARNINGS                                                        |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Balance      at beginning of year                                             |   |   | -          |   |   |   | -          |   |   |   | 157,364 |   |   |
| Net      income                                                               |   |   | 570,418    |   |   |   | 516,000    |   |   |   | 606,839 |   |   |
| Cash      dividends                                                           |   |   | (408,196   | )      |   |   | (488,158   | )      |   |   | (552,322 | ) |   |
| Stock      dividends                                                          |   |   | (162,222   | )      |   |   | (27,842    | )      |   |   | (211,881 | ) |   |
| Balance      at end of year                                                   |   |   | -          |   |   |   | -          |   |   |   | - |   |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| TOTAL      STOCKHOLDERS’ EQUITY                                         |   |   | 445,969    |   |   |   | 668,560    |   |   |   | 715,166 |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| COMPREHENSIVE      INCOME                                                     |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Net      income                                                               |   |   | 570,418    |   |   |   | 516,000    |   |   |   | 606,839 |   |   |
| Unrealised      (loss) gains from marketable securities                       |   |   | (595       | )      |   |   | 1,721      |   |   |   | (11,877 | ) |   |
| Foreign      currency translation                                             |   |   | 1,324      |   |   |   | 538        |   |   |   | (221 | ) |   |
| Other      comprehensive income                                               |   |   | 729        |   |   |   | 2,259      |   |   |   | (12,098 | ) |   |
|                                                                          |   |   |       |   |   |   |       |   |   |   |   |   |   |
| Comprehensive      income                                                     |   |   | 571,147    |   |   |   | 518,259    |   |   |   | 594,741 |   |

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| 1.     | GENERAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Frontline      Ltd. (the “Company” or “Frontline”) is a Bermuda based shipping company      engaged primarily in the ownership and operation of oil tankers, including      oil/bulk/ore (“OBO”) carriers. The Company operates tankers of two sizes:      very large crude carriers (“VLCCs”) which are between 200,000 and 320,000      deadweight tons (“dwt”), and Suezmaxes, which are vessels between 120,000      and 170,000 dwt. The Company operates primarily through subsidiaries      and partnerships located in Bermuda, Isle of Man, Liberia, Norway,      Singapore, Cayman Islands, the United Kingdom and the Bahamas. The Company      is also involved in the charter, purchase and sale of    vessels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      Company’s ordinary shares are listed on the New York Stock Exchange, the      Oslo Stock Exchange and the London Stock Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | In      October 2003, the Company established Ship Finance International Limited      (“Ship Finance”) in Bermuda.  Through transactions executed in      January 2004, the Company transferred to Ship Finance ownership of 46      vessel-owning entities each owning one vessel and its corresponding      financing, and one entity owning an option to acquire a VLCC. The Company      then leased these vessels back on long-term charters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Since      May 2004, the Company has distributed its holding of Ship Finance to its      shareholders and in March 2007, the Company distributed the majority of      its remaining 11.1% shareholding to its shareholders. The Company still      holds 73,383 shares in Ship Finance which represents 0.01% of Ship      Finance’s total shares. Prior to the final distribution of shares in March      2007, the Company consolidated Ship Finance under the provisions of FASB      Interpretation No. 46 (revised December 2003) Consolidation of Variable      Interest Entities, an Interpretation of ARB No. 51 (“FIN 46(R)”).      Subsequent to the distribution in March 2007, the Company no longer      consolidates Ship Finance. Refer to Note 4 for further      information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | In      January 2007, the Company’s wholly owned subsidiary Sealift Ltd      (“Sealift”) completed a private placement raising $180.0 million in      equity. The Company participated by investing $60.0 million and as a      result of the private placement, its shareholding was reduced to 33.3%.      The Company consequently began accounting for its investment under the      equity method. Sealift used the proceeds from the private placement along      with the proceeds from a $110.0 million bond facility, $120.0 million of a      $240.0 million term loan facility and short term sellers’ credit of $80      million from the Company, to acquire from the Company four single hull      vessels to be converted to heavy lift vessels and two Suezmax vessels. The      private placement discussed above was conditional on the acquisition of      the assets described above being effective and the sellers credit is      payable to the Company upon the completion and delivery of each of the      last two converted vessels with $40 million allocated to each vessel. In      May 2007, Sealift acquired Dockwise Ltd (“Dockwise”) and immediately      completed another private placement for 39.8 million shares, of which the      Company subscribed for five million shares. The Company’s investment was      reduced to 17.1% as a result of these transactions. In July 2007,      Sealift changed its name to Dockwise. In October 2007, the Company sold      its entire shareholding in Dockwise. Refer to Note 27 for further      information. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | In      February 2007, the Company’s wholly owned subsidiary Sea Production Ltd      (“Sea Production”) completed a private placement raising $180.0 million in      equity and simultaneously acquired the Company’s floating production      activities. The Company subscribed for 28.3% of the shares and      consequently accounted for its investment under the equity      method.  In June 2007, the Company disposed of its entire      shareholding in Sea Production. Refer to Note 27 for further      information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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| 2.     | ACCOUNTING      POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Basis      of accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The      consolidated financial statements are prepared in accordance with      accounting principles generally accepted in the United States. The      consolidated financial statements include the assets and liabilities of      the Company and its subsidiaries and certain variable interest entities in      which the Company is deemed to be the primary beneficiary.  All      intercompany balances and transactions have been eliminated on      consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | A      variable interest entity (“VIE”) is a legal entity where either (a) equity      interest holders as a group lack the characteristics of a controlling      financial interest, including: decision making ability and an interest in      the entity's residual risks and rewards or (b) the equity holders have not      provided sufficient equity investment to permit the entity to finance its      activities without additional subordinated financial support,      or  where (c) the voting rights of some investors are not      proportional to their obligations to absorb the expected losses of the      entity, their rights to receive the expected residual returns of the      entity, or both and substantially all of the entity's activities either      involve or are conducted on behalf of an investor that has      disproportionately few voting rights. FIN 46(R) requires a variable      interest entity to be consolidated if any of its interest holders are      entitled to a majority of the entity's residual return or are exposed to a      majority of its expected losses. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Investments      in companies over which the Company exercises significant influence but      does not consolidate are accounted for using the equity method. The      Company records its investments in equity-method investees in the      consolidated balance sheets as “Investment in unconsolidated subsidiaries      and associated companies” and its share of the investees’ earnings or      losses in the consolidated statements of operations as “Share in results      of unconsolidated subsidiaries and associated companies”. The excess, if      any, of purchase price over book value of the Company’s investments in      equity method investees is included in the accompanying consolidated      balance sheets in “Investment in unconsolidated subsidiaries and      associated companies”.                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Investments      in which the Company has a majority shareholding but which it does not      control, due to the participating rights of minority shareholders, are      accounted for using the equity method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      preparation of financial statements in accordance with generally accepted      accounting principles requires that management make estimates and      assumptions affecting the reported amounts of assets and liabilities and      disclosure of contingent assets and liabilities at the date of the      financial statements and the reported amounts of revenues and expenses      during the reporting period. Actual results could differ from those      estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Cash      and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | For      the purposes of the consolidated statements of cash flows, all demand and      time deposits and highly liquid, low risk investments with original      maturities of three months or less are considered equivalent to      cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Restricted      cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Restricted      cash consists of bank deposits which may only be used to settle certain      pre-arranged loan or lease payments or minimum deposits which must be      maintained in accordance with contractual arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Marketable      securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Marketable      equity securities held by the Company are considered to be      available-for-sale securities and as such are carried at fair value with      resulting unrealised gains and losses, net of deferred taxes if any,      recorded as a separate component of other comprehensive income in      stockholders’ equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Inventories      comprise principally of fuel and lubricating oils and are stated at the      lower of cost and market value. Cost is determined on a first-in,      first-out basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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|   | Investment      in finance leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Certain      vessels have been chartered under agreements that are classified as direct      financing leases. The minimum payments under the charter agreements are      recorded as the gross investment in the finance lease.  The      difference between the gross investment in the finance lease and the cost      of the vessel is recorded as unearned income.  Throughout the      term of the charter agreement, the Company records as revenue interest      income and unearned income. This unearned income is amortised to income      over the life of the charter agreement to produce a constant periodic rate      of return on the net investment in the finance lease.                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Vessels      and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      cost of the vessels less estimated residual value is depreciated on a      straight-line basis over the vessels’ estimated remaining economic useful      lives. The estimated economic useful life of the Company’s double hull      vessels is 25 years and for single hull vessels is either 25 years or the      vessel’s anniversary date in 2015, whichever comes first. Other equipment      is depreciated over its estimated remaining useful life, which      approximates five years.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Vessels      and equipment under capital lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | The      Company charters in certain vessels under agreements that are classified      as capital leases. Depreciation of vessels under capital lease is included      within depreciation and amortisation expense in the consolidated statement      of operations. Vessels under capital lease are depreciated on a      straight-line basis over the vessels’ remaining economic useful lives or      on a straight-line basis over the term of the lease. The method applied is      determined by the criteria by which the lease has been assessed to be a      capital lease.                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Newbuildings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      carrying value of the vessels under construction (“Newbuildings”)      represents the accumulated costs to the balance sheet date which the      Company has had to pay by way of purchase instalments and other capital      expenditures together with capitalised interest and associated finance      costs. No charge for depreciation is made until the vessel is put into      operation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Vessel      purchase options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Vessel      purchase options are capitalised at the time option contracts are acquired      or entered into. The Company reviews expected future cash flows, which      would result from the exercise of each option contract on a contract by      contract basis to determine whether the carrying value of the option is      recoverable. If the expected future cash flows are less than the carrying      value of the option plus further costs to delivery, a provision is made to      write down the carrying value of the option to the recoverable amount. The      carrying value of each option payment is written off as and when the      Company adopts a formal plan not to exercise the option. Purchase price      payments are capitalised and the total of the option payment, if any, and      purchase price payment is transferred to cost of vessels, upon exercise of      the option and delivery of the vessel to the Company. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Impairment      of long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The      carrying value of long-lived assets that are held and used by the Company      are reviewed whenever events or changes in circumstances indicate that the      carrying amount of an asset may no longer be appropriate. The Company      assesses recoverability of the carrying value of the asset by estimating      the future net cash flows expected to result from the asset, including      eventual disposition. If the future net cash flows are less than the      carrying value of the asset, an impairment loss is recorded equal to the      difference between the asset’s carrying value and fair value.  In      addition, long-lived assets to be disposed of are reported at the lower of      carrying amount and fair value less estimated costs to    sell.                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Deferred      charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Loan      costs, including debt arrangement fees, are capitalised and amortised on a      straight-line basis over the term of the relevant loan. The straight line      basis of amortisation approximates the effective interest method in the      Company’s consolidated statement of operations. Amortisation of loan costs      is included in interest expense.  If a loan is repaid early, any      unamortised portion of the related deferred charges is charged against      income in the period in which the loan is  repaid.                                                                                                                                                                                                                                                                                                                                                                                                   |

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|   | Discount      on loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Discount      on issue of certain of the Company’s long-term debt is being amortised      over the respective periods to maturity of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Trade      accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Trade      and other receivables are presented net of allowances for doubtful      balances. If amounts become uncollectible, they are charged against income      when that determination is made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Revenue      and expense recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Revenues      and expenses are recognised on the accruals basis. Revenues are generated      from freight billings, time charter and bareboat charter hires. Voyage      revenues and expenses are recognised ratably over the estimated length of      each voyage and, therefore, are allocated between reporting periods based      in the relative transit time in each period. The impact of recognising      voyage expenses ratably over the length of each voyage is not materially      different on a quarterly and annual basis from a method of recognising      such costs as incurred. Probable losses on voyages are provided for in      full at the time such losses can be estimated. Time charter and bareboat      charter revenues are recorded over the term of the charter as a service is      provided. The Company uses a discharge-to-discharge basis in determining      percentage of completion for all spot voyages and voyages servicing      contracts of affreightment whereby it recognises revenue rateably from      when product is discharged (unloaded) at the end of one voyage to when it      is discharged after the next voyage. The Company does not begin      recognising revenue until a charter has been agreed to by a customer and      the Company, even if the vessel has discharged its cargo and is sailing to      the anticipated load port on its next voyage. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Amounts      receivable or payable arising from profit sharing arrangements are accrued      based on amounts earned as of the reporting date. Profit share income      represents vessel earnings earned by the Company’s customers in excess of      market rates. Profit share expense represents amounts due to Ship Finance      based on 20% of the excess of  vessel revenues earned by the      Company over the base hire paid to Ship Finance for chartering in the      vessels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Revenues      and voyage expenses of the vessels operating in pool arrangements are      pooled and the resulting net pool revenues, calculated on a time charter      equivalent basis, are allocated to the pool participants according to an      agreed formula.  Formulae used to allocate net pool revenues      vary among different pools but generally allocate revenues to pool      participants on the basis of the number of days a vessel operates in the      pool with weighting adjustments made to reflect vessels’ differing      capacities and performance capabilities.  The same revenue and      expense principles stated above are applied in determining the pool’s net      pool revenues.  Certain pools are responsible for paying voyage      expenses and distribute net pool revenues to the      participants.  Certain pools require the participants to pay and      account for voyage expenses, and distribute gross pool revenues to the      participants such that the participants’ resulting net pool revenues are      equal to net pool revenues calculated according to the agreed      formula.  The Company accounts for gross pool revenues allocated      by these pools as “pool revenues” which are included in voyage      revenues in its consolidated statements of    operations. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Gain      on sale of assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Gain      on sale of assets includes gains from the sale of vessels, gains from the      termination of leases and gains from the sale of heavy lift conversion      projects. Gains from the sale of assets are recognised when the vessel has      been delivered and all risks have been transferred and is determined by      comparing the proceeds received with the carrying value of the vessel.      Gains from the termination of leases are recognised when the lease is      effectively terminated and the vessel has been redelivered to the owner.      Gains from sale of heavy lift conversion projects are recognised as each      converted vessel is delivered.  The amount recognised is the      gain allocated to each vessel that is not contingent upon future      events.  Deferred gains are recorded as Other Current      Liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

|   | Drydocking                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Normal      vessel repair and maintenance costs are expensed when incurred. The      Company recognises the cost of a drydocking at the time the drydocking      takes place, that is, it applies the “expense as incurred”      method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Derivatives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      Company may enter into interest rate swap transactions to hedge a portion      of its exposure to floating interest rates. These transactions involve the      conversion of floating rates into fixed rates over the life of the      transactions without an exchange of underlying principal. The fair values      of the interest rate swap contracts are recognised as assets or      liabilities with changes in fair values recognised in the consolidated      statements of operations.                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      Company may enter into forward freight contracts and options in order to      hedge exposure to the spot market for certain trade routes and in some      cases, for speculative purposes. These transactions involve entering into      a contract to swap theoretical market index based voyage revenues for a      fixed daily rate. The fair values of the forward freight contracts are      recognised as assets or liabilities with changes in fair values recognised      in the consolidated statements of operations.                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Financial      instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | In      determining the fair value of its financial instruments, the Company uses      a variety of methods and assumptions that are based on market conditions      and risks existing at each balance sheet date. For the majority of      financial instruments, including most derivatives and long-term debt,      standard market conventions and techniques such as options pricing models      are used to determine fair value. All methods of assessing fair value      result in a general approximation of value, and such value may never      actually be realised.                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Foreign      currencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The      functional currency of the Company and the majority of its subsidiaries is      the U.S. dollar as the majority of revenues and expenditures are      denominated in U.S. dollars. The Company’s reporting currency is also U.S.      dollars. For subsidiaries that maintain their accounts in currencies other      than U.S. dollars, the Company uses the current method of translation      whereby the statements of operations are translated using the average      exchange rate and the assets and liabilities are translated using the year      end exchange rate. Foreign currency translation gains or losses are      recorded as a separate component of other comprehensive income in      stockholders’ equity. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Transactions      in foreign currencies during the year are translated into U.S. dollars at      the rates of exchange in effect at the date of the transaction. Foreign      currency monetary assets and liabilities are translated using rates of      exchange at the balance sheet date. Foreign currency non-monetary assets      and liabilities are translated using historical rates of exchange. Foreign      currency transaction gains or losses are included in the consolidated      statements of operations.                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Share-based      payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | The      Company accounts for share based payments in accordance with SFAS 123(R)      Share-Based      Payments      (“FAS 123(R)”).  Accordingly, the Company expenses the      fair value of stock options issued to employees over the period in which      the options vest.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Earnings      per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Basic      earnings per share (“EPS”) is computed based on the income available to      common stockholders and the weighted average number of shares outstanding      for basic EPS. Diluted EPS includes the effect of the assumed conversion      of potentially dilutive instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Issuance      of shares by a subsidiary/ associate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      Company recognises a profit when its subsidiary or associate issues      stock to third parties at a price per share in excess of its carrying      amount if such profit is realisable.  If such profit is not      realisable, it is recorded as an increase to contributed      surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

|   | Reclassification                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Effective      2007, the Company has elected to reclassify certain balances in its      consolidated financial statements. The Company has reclassified      commissions paid on some of the Company’s time charters which has resulted      in a decrease in ship operating expenses and an increase of voyage      expenses of $2.8 million in the year ended December 31, 2006. Effective      2007, the Company has elected to separately disclose related party      balances which were previously reported in other receivables and other      current liabilities and to separately disclose additional paid in capital      which was previously reported within contributed surplus. Prior period      comparatives have been reclassified to conform to the current year      presentation.                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.     | RECENT      ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      September 2006, the Financial Accounting Standards Board (“FASB”) issued      Statement of Financial Accounting Standard No. 157, Fair Value Measurements      (“FAS 157”). FAS 157 establishes a single authoritative definition of      fair value, sets out a framework for measuring fair value and expands on      required disclosures about fair value measurement under other accounting      pronouncements that require or permit fair value measurements.      Accordingly, this statement does not require any new fair value      measurements. FAS 157 is effective for fiscal years beginning after      December 15, 2007 and interim periods within such years. In February      2008, the FASB issued a staff position that delays the effective date of      FAS 157 for all nonfinancial assets and liabilities except for those      recognised or disclosed at least annually with the revised effective date      being fiscal years beginning after November 15, 2008. Adoption of FAS 157      is not expected to have a material effect on the Company’s consolidated      financial statements. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      February 2007, the FASB issued Statement of Financial Accounting Standard      No. 159, The Fair      Value Option for Financial Assets and Financial Liabilities Including an      Amendment of FASB Statement No. 115 (“FAS 159”). FAS 159      allows  entities to choose to measure many financial instruments      and certain other items at fair value, with unrealised gains and losses      related to these financial instruments being reported in earnings at each      subsequent reporting date. FAS 159 is effective for fiscal years beginning      after November 15, 2007. Adoption of FAS 159 on January 1, 2008 is      not expected to have a material effect on the Company’s consolidated      financial statements.                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      December 2007, the FASB issued Statement of Financial Accounting Standard      No. 141 (revised 2007), Business Combinations      (“FAS 141(R)”). FAS 141(R) establishes the principles and requirements for      how an acquirer recognises and measures the identifiable assets acquired,      the liabilities assumed, the noncontrolling interest in the acquiree and      the goodwill acquired. FAS 141(R) requires the acquirer in a business      combination to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

| ·   | recognise      100% of the fair values of acquired assets, including goodwill, and      assumed liabilities even if the acquirer has not acquired 100% of the      target entity |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | apply      fair value to contingent consideration arrangements at the acquisition      date |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | expense      transaction costs as incurred rather than including as part of the fair      value of an acquirer’s interest |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | fair      value certain pre-acquisition contingencies such as environmental or legal      issues |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | limit      the accrual of the costs for a restructuring plan in purchase      accounting |
|--------------------|------------------------------------------------------------------------------------------|

|   | FAS      141(R) is effective prospectively to business combinations where the      acquisition date is on or after the beginning of the first annual      reporting period beginning on or after December 15, 2008. Early      adoption is not permitted. Adoption of FAS 141(R) is not expected to have      a material effect on the Company’s consolidated financial      statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                |

----

|   | In      December 2007, the FASB issued Statement of Financial Accounting      Standard  No. 160, Non controlling Interest in      Consolidated Financial Statements, an amendment of ARB No. 51      (“FAS 160”). FAS 160 clarifies the classification of non controlling      interests (i.e. minority owners’ interests in subsidiaries) in      consolidated balance sheets and the accounting for and reporting of      transactions between the reporting entity and holders of such non      controlling interests. FAS 160 requiresthat: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | non      controlling interests are reported as an element of consolidated equity,      thereby removing the current practice of classifying minority interest      within the mezzanine section of the balance  sheet |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | reported      net income will consist of the total income of all consolidated      subsidiaries, with separate disclosure on the face of the income statement      of the split of that income between the controlling and non controlling      interests |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | movements      in the non controlling ownership interest amount will be accounted for as      equity transactions. If the controlling interest loses control and      deconsolidates a subsidiary, full gain or loss on the transition will be      recognised |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | SFAS      160 is effective prospectively for fiscal years beginning after      December 15, 2008. Early adoption is not permitted. The following      provisions are required to be adopted  retrospectively: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·                      | non      controlling interests are required to be reclassified from the mezzanine      section to equity in the consolidated balance sheet  |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
|  ·      | consolidated      net income must be recast to include net income attributable to both      controlling and non controllinginterests.  |

|   | Adoption      of FAS 160 will result in the Company reporting minority interest as a      component of equity in the balance sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 4.     | DECONSOLIDATION      OF SHIP FINANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The      Company distributed the majority of its remaining shareholding of Ship      Finance in March 2007 and no longer consolidates Ship Finance as of March      31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | FIN      46(R) was applied to Ship Finance as a holding company and to each of its      subsidiaries. Ship Finance was determined to be the primary beneficiary of      its subsidiaries with the exception of the Front Shadow where Golden Ocean      Group Limited (“Golden Ocean”), as the lessee, was determined to be the      primary beneficiary. As a result, these subsidiaries are being      consolidated or accounted for under the equity method by Ship Finance as      appropriate. The Company was determined to be the primary beneficiary of      the holding company Ship Finance as a result of the variable interests      held by the Company and its related parties. Consequently, Ship Finance      and its subsidiaries were consolidated until Frontline distributed the      majority of its remaining shares in Ship Finance. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Under      FIN 46(R), the primary beneficiary should reconsider whether it is still      the primary beneficiary if it sells or otherwise disposes of its variable      interests to unrelated parties. As such, the Company’s distribution of      shares in March is a reconsideration event and it was determined that the      Company was no longer the primary beneficiary of Ship Finance.      Accordingly, the Company is no longer consolidating Ship Finance as of      March 31, 2007.                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | A      summary of the major changes to the financial statements of the Company is      as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

| ·   | Vessels      leased from Ship Finance which were previously reported as vessels and      equipment are now reported as vessels under capital  lease |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Capital      lease obligations with Ship Finance which were previously eliminated on      consolidation are reported as liabilities with related interest recorded      in the consolidated statement ofoperations |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Debt      incurred by Ship Finance, which was previously reported as debt of the      Company, is no longer reported |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| ·   | Derivative      instruments held by Ship Finance are no longer  reported |
|--------------------|--------------------------------------------------------------------------|

| ·   | Minority      interest expense relating to Ship Finance is no longer      reported |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Profit      share expense relating to amounts due to Ship Finance is now presented in      the consolidated statement ofoperations |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Results      from Ship Finance’s container ships and jack-up rigs are reported as      discontinued operations in the years ended December 31, 2007, 2006 and      2005 |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Prior      to the deconsolidation of Ship Finance, items of expenditure incurred by      Ship Finance which have been recorded in the Company’s consolidated      statement of cash flows for the year ended December 31, 2007      include: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Purchase      of the container ship Horizon Hawk for $56.8  million |
|--------------------|---------------------------------------------------------------------|

| ·   | Payments      totalling $126.5 million relating to Ship Finance’s second jack up rig      West Prospero |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | Cash      from debt draw downs  totalling $127.2      million |
|--------------------|-------------------------------------------------------------------------|

| ·   | Debt      repayments totalling $122.4 million |
|--------------------|-----------------------------------------------|

| 5.     | SEGMENT      INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|        | The      Company and the chief operating decision maker (“CODM”) measure      performance based on the Company’s overall return to shareholders based on      consolidated net income. Consequently, the Company has only one reportable      segment: tankers  The tankers segment includes crude oil      tanker vessels and OBO or oil/bulk/ore vessels. Both types of vessel are      managed as part of this one segment. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      consolidated financial statements include the results of rigs and      containerships as discontinued operations.                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      Company’s management does not evaluate performance by geographical region      as this information is not meaningful.                                                                                                                                                                                                                                                                                                                            |

|   |                                                                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company performs in two markets, the wet      market whereby crude oil is transported, and the dry market whereby dry      cargo is transported. An analysis of revenues from these services is as      follows: |

|   |  (in      thousands of $)                   |   |   | 2007      |   |   |   | 2006      |   |   |   | 2005      |   |
|--------|--------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|
|   | Total      operating revenues – wet market |   |   | 1,171,000 |   |   |   | 1,461,901 |   |   |   | 1,387,009 |   |
|   | Total      operating revenues – dry market |   |   | 120,170   |   |   |   | 90,699    |   |   |   | 104,668   |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | During      the year ended December 31, 2007, the Company reported total income from      one customer of $247.3 million which represented approximately 19% of      consolidated operating revenues (2006: one customer which represented      approximately 13% and 2005: one customer which represented approximately      10.4%). These revenues are reported under the tanker    segment. |

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| 6.     | TAXATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Bermuda                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Under      current Bermuda law, the Company is not required to pay taxes in Bermuda      on either income or capital gains. The Company has received written      assurance from the Minister of Finance in Bermuda that, in the event of      any such taxes being imposed, the Company will be exempted from taxation      until the year 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | United      States                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | The      Company does not accrue U.S. income taxes as, in the opinion of U.S.      counsel, the Company is not engaged in a U.S. trade or business and is      exempted from a gross basis tax under Section 883 of the U.S. Internal      Revenue Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | A      reconciliation between the income tax expense resulting from applying the      U.S. Federal statutory income tax rate and the reported income tax expense      has not been presented herein as it would not provide additional useful      information to users of the financial statements as the Company’s net      income is subject to neither Bermuda nor U.S. tax.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Other      Jurisdictions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Certain      of the Company’s subsidiaries in Singapore, Norway and the United      Kingdom are subject to taxation in their respective jurisdictions.      The tax paid by subsidiaries of the Company that are subject to taxation      is not material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      Company adopted FASB Interpretation No. 48 Accounting for Uncertainty in      Income Taxes (“FIN 48”) on January 1, 2007. FIN 48 clarifies the      accounting for uncertainty in income taxes recognised in financial      statements in accordance with Statement of Financial Accounting Standard      109 Accounting for      Income Taxes. FIN 48 requires companies to determine whether it is      more likely than not that a tax position taken or expected to be taken in      a tax return will be sustained upon examination. If a tax position meets      the more likely than not recognition threshold, it is measured to      determine the amount of benefit to recognise in the financial statements.      The Company has not recognised any additional liabilities or expenses on      adoption of FIN 48 and does not have any unrecognised tax benefits,      material accrued interest or penalties relating to income      taxes. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 7.     | EARNINGS      PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      computation of basic earnings per share (“EPS”) is based on the weighted      average number of shares outstanding during the year. The computation of      diluted EPS assumes the foregoing and the exercise of stock options using      the treasury stock method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      components of the numerator for the calculation of basic EPS and diluted      EPS for net income from continuing operations and net income are as      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

| (in      thousands of $)                   |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Net      income from continuing operations |   |   | 564,976 |   |   |   | 502,486 |   |   |   | 592,743 |   |
| Discontinued      operations               |   |   | 5,442   |   |   |   | 13,514  |   |   |   | 14,096 |   |
| Net      income available to stockholders  |   |   | 570,418 |   |   |   | 516,000 |   |   |   | 606,839 |   |

----

|   | The      components of the denominator for the calculation of basic EPS and diluted      EPS are as follows: |
|--------|--------------------------------------------------------------------------------------------------------------|

| (in      thousands)                                         |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Basic      earnings per share:                              |   |   |   |   |   |   |   |   |   |
| Weighted      average number of ordinary shares outstanding |   |   | 74,825 |   |   |   | 74,825 |   |   |   | 74,825 |   |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per share:                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of ordinary shares outstanding |   |   | 74,825 |   |   |   | 74,825 |   |   |   | 74,825 |   |
| Stock      options                                          |   |   | 42     |   |   |   | -      |   |   |   | - |   |
|                                                        |   |   | 74,867 |   |   |   | 74,825 |   |   |   | 74,825 |   |

|                       |   | 2007   |   |   | 2006   |   |    | 2005   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Anti-dilutive      options |   |   | -      |   |   |   | 100,000 |   |   |   | - |   |

|   | The      Company has reclassified 2007 and prior years for discontinued operations      relating to container ships and rigs. The effect on EPS of this      reclassification is as follows: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in      thousands of $)                                      |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Discontinued      operations – containers and rigs |   |   | 5,442  |   |   |   | 13,514 |   |   |   | 5,311 |   |
| Basic      and diluted EPS – containers and rigs        |   | $      | 0.07   |   |   | $      | 0.18   |   |   | $ | 0.07 |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued      operations – drybulk             |   |   | -      |   |   |   | -      |   |   |   | 8,785 |   |
| Basic      and diluted EPS – drybulk                    |   |   | -      |   |   |   | -      |   |   | $ | 0.12 |   |

| 8.     | LEASES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | As      of December 31, 2007, the Company leased in 56 vessels on long-term time      charters and bareboat charters from third parties and related      parties.  Three of these leases are classified as operating      leases and 53 as capital leases.   With the exception of      the Company’s long-term leases with Ship Finance, the Company’s long-term      leases of vessels generally contain optional renewal periods and purchase      and put options. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Rental      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Charter      hire payments to third parties for certain contracted-in vessels are      accounted for as operating leases. The Company is also committed to make      rental payments under operating leases for office premises. The future      minimum rental payments under the Company’s non-cancellable operating      leases are as follows:                                                                                                                                                    |

| (in      thousands of $)          |   |   |    |
|-----------------------------------|--------|--------|---------|
| Year      ending December 31,     |   |   |    |
| 2008                              |   |   | 38,857  |   |
| 2009                              |   |   | 35,786  |   |
| 2010                              |   |   | 34,067  |   |
| 2011                              |   |   | 27,845  |   |
| 2012                              |   |   | 8,741   |   |
| 2013      and later               |   |   | 5,928   |   |
| Total      minimum lease payments |   |   | 151,224 |   |

|   | Total      rental expense for operating leases was $59.0 million, $26.5 million and      $12.9 million for the years ended December 31, 2007, 2006 and 2005,      respectively. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | The      following table discloses information about the terms of the Company’s      long term leases for vessels contracted in which are accounted for as      operating leases: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Vessel      Type             | Expiry      of Mandatory Lease Period |   | Extended      Lease Periods at Lessor’s Option |      |   | Extended      Lease Periods at Company’s Option |   |      | Company’s      Purchase Option Periods |   | Lessor’s      Put Option Exercise Date |
|------------------------------|---------------------------------------|--------|------------------------------------------------------|-----------|--------|-------------------------------------------------------|--------|-----------|----------------------------------------------|--------|----------------------------------------------|
| Front      Warrior (Suezmax) | 2007                                  |   |                                                 | 2008-2011 |   |                                                  |   | 2010-2011 |                                         |   |                                         | 2007-      2011 |   | 2011 |
| Hampstead                    | 2012                                  |   | none                                                 |      |   | none                                                  |   |      | none                                         |   | none                                         |
| Kensington                   | 2011                                  |   | none                                                 |      |   | none                                                  |   |      | none                                         |   | none                                         |

|   | The      lease for Front Warrior was extended for an additional two years at the      lessor’s option on January 1, 2008. The minimum lease payments for this      optional period have been included in the analysis  above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | A      liability for put options on vessels leased on operating leases is      recorded at such time that market conditions make it likely that a put      option will be exercised on the exercise date.  A liability is      recognised based on the amount, if any, by which the put option price      exceeds the fair market value of the related vessel. As of December 31,      2007, no such liability had arisen.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Nine      of the vessels leased by the Company are leased from special purpose      lessor entities which were established and are owned by independent third      parties who provide financing through debt and equity participation. Each      entity owns one vessel, which is leased to the Company, and has no other      activities.  Prior to the adoption of FIN 46(R), these special      purpose entities were not consolidated by Frontline. One of these leases      is accounted for as operating leases and eight of these leases are      accounted for as capital leases.  The Company has determined      that due to the existence of certain put and call options over the leased      vessels, these entities are variable interest entities.  The      determination of the primary beneficiary of a variable interest entity      requires knowledge of the participations in the equity of that entity by      individual and related equity holders.  Our lease agreements      with the leasing entities do not give us any right to obtain this      information and the Company has been unable to obtain this information by      other means.  Accordingly the Company is unable to determine the      primary beneficiary of these leasing entities. As of December 31, 2007,      the original cost to the lessor of the assets under such arrangements was      $618.5 million. As of December 31, 2007 and 2006, the Company's residual      value guarantees associated with these leases, which represent the maximum      exposure to loss, are $85.0 million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The      following table discloses information about the Company’s activity with      these non-consolidated lessor entities in the three year period ended      December 31, 2007:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|                                                          |   | Year      ended December 31, |   |
|---------------------------------------------------------------|--------|------------------------------|--------|
|                                                          |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
| Repayments      of principal obligations under capital leases |   |                         | 28,857 |   |   |   | 25,142 |   |   |   | 22,205 |   |
| Interest      expense for capital leases                      |   |                         | 32,605 |   |   |   | 34,867 |   |   |   | 36,850 |   |
| Charterhire      expense for operating leases                 |   |                         | 5,311  |   |   |   | 5,402 |   |   |   | 5,211 |   |

----

|   | As      of December 31, 2007, the Company leased out 34 of its vessels to third      parties on time and bareboat charters with initial periods ranging between      three months and five years. All of those leases are classified as      operating leases. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                           |
|   | Rental      income                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                           |
|   | The      minimum future revenues to be received on time and bareboat charters which      are accounted for as operating leases and other contractually committed      income as of December 31, 2007 are asfollows:                                            |

| (in      thousands of $)          |   | Total  |    |
|-----------------------------------|--------|--------|---------|
| 2008                              |   |   | 362,982 |   |
| 2009                              |   |   | 264,508 |   |
| 2010                              |   |   | 109,095 |   |
| 2011                              |   |   | 28,468  |   |
| 2012                              |   |   | 15,627  |   |
| 2013      and later               |   |   | -       |   |
| Total      minimum lease revenues |   |   | 780,680 |   |

|   | The      cost and accumulated depreciation of the vessels leased to third parties      as of December 31, 2007 were approximately $1,825.2 million and $513.5      million, respectively, and as of December 31, 2006 were approximately      $2,167.4 million and $849.3 million, respectively. Two of the vessels      currently leased to third parties are leased in on operating leases by the      Company. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                              |
| 9.     | MARKETABLE      SECURITIES                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Marketable      securities held by the Company are equity securities considered to be      available-for-sale securities.                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                              |

| (in      thousands of $)             |   | 2007   |   |   | 2006   |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|
| Cost                                 |   |   | 16,008 |   |   |   | 1,198 |   |
| Net      unrealised (loss) gain |   |   | (324   | )      |   |   | 271 |   |
| Fair      value                      |   |   | 15,684 |   |   |   | 1,469 |   |

|   | The      net unrealised loss on marketable securities, including a component of      foreign currency translation, included in comprehensive income is $0.3      million – a decrease of $0.6 million for the year ended December 31,      2007 (2006 – net unrealised gain of $0.3 million).  During the      year ended December 31, 2007, the net unrealised gain as of December 31,      2006 was released into the income statement as a result of the sale of the      shares held. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in      thousands of $)                                                        |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|---------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Proceeds      from sale of available-for-sale securities                        |   |   | 162,392 |   |   |   | 154,409 |   |   |   | 152,752 |   |
| Realised      gain (including amounts classified in discontinued    operations) |   |   | 49,023  |   |   |   | 9,782   |   |   |   | 28,035 |   |

| Realised      loss (including amounts classified in discontinued      operations) |   |   | (40 | )  |   |   | - |   |   |   | - |   |
|-----------------------------------------------------------------------------------|--------|--------|-----|---------|--------|--------|---|--------|--------|--------|---|--------|

|   | The      cost of sale of available-for-sale marketable securities is calculated on      an average cost basis. Realised gains and losses are recorded as gain on      sale of securities in the consolidated statement of operations. Refer to      Note 27 for further information on gains recorded in gain on sale of      securities resulting from sales of assets not previously classified as      marketable securities. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.    | TRADE      ACCOUNTS RECEIVABLE, NET                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                  |
|   | Trade      accounts receivable are presented net of allowances for doubtful accounts      relating to demurrage claims amounting to $1.3 million and $3.0 million as      of December 31, 2007 and 2006 respectively. |
|   |                                                                                                                                                                                                                  |
| 11.    | OTHER      RECEIVABLES                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                  |

| (in      thousands of $)            |   | 2007   |   |   | 2006   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|
| Agent      receivables              |   |   | 3,537  |   |   |   | 7,039 |   |
| Claims      receivables             |   |   | 6,355  |   |   |   | 8,458 |   |
| Receivable      from sale of assets |   |   | 13,372 |   |   |   | 13,372 |   |
| Other      receivables              |   |   | 5,300  |   |   |   | 8,466 |   |
|                                |   |   | 28,564 |   |   |   | 37,335 |   |

|   | Other      receivables are presented net of allowances for doubtful accounts      amounting to $nil as of December 31, 2007 and 2006. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                  |
| 12.    | OTHER      CURRENT ASSETS                                                                                                             |

| (in      thousands of $)               |   | 2007   |   |   | 2006   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
| Security      deposits on newbuildings |   |   | -      |   |   |   | 11,222 |   |
| Other                                  |   |   | 64     |   |   |   | 349 |   |
| Other      current assets              |   |   | 64     |   |   |   | 11,571 |   |

|   | Security      deposits on newbuildings relate to deposits paid plus related interest      accrued by Ship Finance in relation to containership newbuildings. The      Company stopped consolidating the results of Ship Finance with effect from      March 31, 2007. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                  |
| 13.    | NEWBUILDINGS                                                                                                                                                                                                                                                          |

| (in      thousands of $) |   | 2007   |    |   | 2006   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|
| Newbuildings             |   |   | 160,298 |   |   |   | 166,851 |   |

|   | The      carrying value of newbuildings represents the accumulated costs which the      Company has paid by way of purchase instalments and other capital      expenditures together with capitalised loan interest.  Interest      capitalised in the cost of newbuildings amounted to $10.4 million in 2007      (2006: $3.6 million, 2005: $nil).                                                                                                                                                     |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | As      of December 31, 2007, there were seven newbuilding contracts representing      costs of $113.1 million (2006: six contracts representing costs of $71.0      million) and two conversion projects representing costs of $47.2 million      (2006: two projects representing costs of $95.9 million). The conversion      projects are for the conversion of two single hull Suezmax tankers into      heavy lift vessels which are already subject to a sales agreement as      discussed in Note 27. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The      conversion projects reported in 2006 were for the conversion of a single      hull Suezmax tanker into a heavy lift vessel which was sold to Dockwise in      March 2007 and the conversion of an Aframax tanker into a Floating      Production Storage and Offloading (“FPSO”) vessel which was sold to Sea      Production in February 2007.                                                                                                                                     |

----

|   |                            |
|--------|---------------------------------|
| 14.    | VESSELS      AND EQUIPMENT, NET |
|   |                            |

| (in      thousands of $)           |   | 2007   |    |   | 2006   |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|
| Cost                               |   |   | 273,399 |   |   |   | 3,567,607 |   |
| Accumulated      depreciation      |   |   | (64,883 | )      |   |   | (1,121,329 | ) |
| Net      book value at end of year |   |   | 208,516 |   |   |   | 2,446,278 |   |

|   | Included      in the above amounts as of December 31, 2007 and 2006 is equipment with a      net book value of $3.6 million and $3.5 million respectively.                                                                                                                                                                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The      Company stopped consolidating the results of Ship Finance with effect from      March 31, 2007. This has resulted in a net book value of vessels totalling      $2,181.6 million that were reported as wholly owned vessels in 2006 no      longer being reported as these are now recorded as vessels under capital      lease.                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Depreciation      expense for vessels and equipment was $46.3 million, $157.6 million and      $198.8 million for the years ended December 31, 2007, 2006 and 2005,      respectively, including amounts recorded in discontinued operations.      Depreciation expense for the year ended December 31, 2007 includes $32.1      million relating to vessels leased from Ship Finance which are now      accounted for as vessels under capital leases. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 15.    | VESSELS      UNDER CAPITAL LEASE, NET                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

| (in      thousands of $)           |   | 2007   |      |   | 2006   |   |
|------------------------------------|--------|--------|-----------|--------|--------|--------|
| Cost                               |   |   | 3,153,602 |   |   |   | 853,169 |   |
| Accumulated      depreciation      |   |   | (828,813  | )      |   |   | (226,795 | ) |
| Net      book value at end of year |   |   | 2,324,789 |   |   |   | 626,374 |   |

|   | Depreciation      expense for vessels under capital lease was $174.9 million, $46.2 million      and $46.2 million for the years ended December 31, 2007, 2006 and 2005,      respectively. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                        |
|   | The      outstanding obligations under capital leases are payable as      follows:                                                                                                          |

| (in      thousands of $)                               |   |   |       |
|--------------------------------------------------------|--------|--------|------------|
| Year      ending December 31,                          |   |   |       |
| 2008                                                   |   |   | 345,231    |   |
| 2009                                                   |   |   | 427,108    |   |
| 2010                                                   |   |   | 476,348    |   |
| 2011                                                   |   |   | 343,333    |   |
| 2012                                                   |   |   | 241,181    |   |
| 2013      and later                                    |   |   | 1,726,150  |   |
| Minimum      lease payments                            |   |   | 3,559,351  |   |
| Less:      imputed interest                            |   |   | (1,060,953 | ) |
| Present      value of obligations under capital leases |   |   | 2,498,398  |   |

|   | As      of December 31, 2007, the Company held 54 vessels under capital leases      (2006 – twelve), of which, 41 are leased from Ship Finance. These leases      are for terms that range from six to 24 years.                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                  |
|   | The      Company has purchase options over eight of these vessels at certain      specified dates and the lessor has options to put these vessels to the      Company at the end of the lease term. Gains arising from the sale and      leaseback transactions have been deferred and are being amortised over the      lease terms. |

----

|   | The      following table discloses information about the terms of the Company’s      capital leases for vessels excluding those leased from Ship      Finance: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Vessel      Type                  | Expiry      of Mandatory Lease Period |   | Extended      Lease Periods at Lessor’s Option |      |   | Extended      Lease Periods at Company’s Option |   | Company’s      Purchase Option Periods | Lessor’s      Put Option Exercise Date |
|-----------------------------------|---------------------------------------|--------|------------------------------------------------------|-----------|--------|-------------------------------------------------------|--------|----------------------------------------------|----------------------------------------------|
| Front      Crown (VLCC)           | 2009                                  |   |                                                 | 2010-2014 |   |                                                  |   | 2013-2014                                    |                                         | 2009      to 2014 | 2014 |
| Front      Chief (VLCC)           | 2009                                  |   |                                                 | 2010-2014 |   |                                                  |   | 2013-2014                                    |                                         | 2009      to 2014 | 2014 |
| Front      Commander (VLCC)       | 2009                                  |   |                                                 | 2010-2014 |   |                                                  |   | 2013-2014                                    |                                         | 2009      to 2014 | 2014 |
| Front      Eagle (VLCC)           | 2010                                  |   |                                                 | 2011-2015 |   |                                                  |   | 2014-2015                                    |                                         | 2010      to 2015 | 2015 |
| Front      Melody (Suezmax)       | 2011                                  |   |                                                 | 2012-2015 |   |                                                  |   | 2014-2015                                    |                                         | 2011      to 2015 | 2015 |
| Front      Symphony (Suezmax)     | 2011                                  |   |                                                 | 2012-2015 |   |                                                  |   | 2014-2015                                    |                                         | 2011      to 2015 | 2015 |
| Front      Tina  (VLCC) | 2011                                  |   |                                                 | 2012-2015 |   |                                                  |   | 2014-2015                                    |                                         | 2011      to 2015 | 2015 |
| Front      Commodore (VLCC)       | 2011                                  |   |                                                 | 2012-2015 |   |                                                  |   | 2014-2015                                    |                                         | 2011      to 2015 | 2015 |
| British      Pioneer (VLCC)       | 2024                                  |   | none                                                 |      |   | Note      (2)                                         |   | Note      (1)                                | none                                         |
| British      Progress (VLCC)      | 2025                                  |   | none                                                 |      |   | Note      (2)                                         |   | Note      (1)                                | none                                         |
| British      Purpose (VLCC)       | 2025                                  |   | none                                                 |      |   | Note      (2)                                         |   | Note      (1)                                | none                                         |
| British      Pride (VLCC)         | 2025                                  |   | none                                                 |      |   | Note      (2)                                         |   | Note      (1)                                | none                                         |

|   | Put      options on vessels leased under leases classified as capital leases are      recorded as part of the lease’s minimum lease payments.  Lease      liabilities are amortised so that the remaining balance at the date the      put option becomes exercisable is equal to the put option      amount.  An additional liability is recognised based on the      amount, if any, by which the put option price exceeds the fair market      value of the related vessel. As of December 31, 2007 no such additional      liability had arisen. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (1) | The      Company does not have options to purchase the vessel but it has first      refusal if the vessel’s owner offers the vessel for  sale. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|        (2) | The      Company has the right to terminate the lease at any time but only with      permission of the charterer. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

----

|   | The      Company’s capital leases for vessels leased from Ship Finance are      long-term, fixed rate leases which extend for various periods depending on      the age of the vessels The following table discloses information about the      terms of these leases: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Vessel      Type                                  |   | Expiry      of Mandatory Lease Period |      | Company’s      Optional Termination Date | Company’s      Purchase Option Periods | Lessor’s      Put Option Exercise Date |
|---------------------------------------------------|--------|---------------------------------------|-----------|------------------------------------------------|----------------------------------------------|----------------------------------------------|
| OBO      (8 vessels)                              |   | 2015                                  |      | none                                           | none                                         | none                                         |
| Non      double hull Suezmax and VLCC (9 vessels) |   | 2013                                  |      | 2010                                           | none                                         | none                                         |
| Double      hull Suezmax (6 vessels)              |   |                                  | 2017-2021 |                                           | none                                         | none                                         | none |
| Double      hull VLCC (18 vessels)                |   |                                  | 2021-2027 |                                           | none                                         | none                                         | none |

|   | In      conjunction to the leases with Ship Finance, the Company has also entered      into charter ancillary agreements whereby the Company agrees to pay Ship      Finance a profit sharing payment equal to 20% of the charter revenues      earned by the Company in excess of the daily base charterhire paid to Ship      Finance. Subsequent to 2010, non-double hull vessels will be excluded from      this profit sharing calculation. In the year ended December 31, 2007,      total profit share due to Ship Finance was $52.5 million, of which $15.2      million was recorded in the quarter ended March 31, 2007 and subsequently      eliminated as a result of the consolidation of Ship    Finance. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The      Company is obligated to ensure that a charter service reserve be held      which can only be used to make charter payments to Ship Finance and for      reasonable working capital to meet short term voyage expenses. The charter      reserve is based on the number of vessels that the Company charters from      Ship Finance. As of December 31, 2007, the total charter service reserve      is $226.7 million and the balance is recorded as restricted cash in the      Company’s consolidated balance sheet.                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 16.    | EQUITY      METHOD INVESTMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | As      of December 31, 2007, the Company had the following participation in      investments that are recorded using the equity  method:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|                                       |   | 2007   |   |   | 2006   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|
| International      Maritime Exchange ASA   |   |   | -      |   |   |   | 24.49 | % |
| Front      Tobago Shipping Corporation     |   |   | 40.00  | %      |   |   | 40.00 | % |
| Golden      Fountain Corporation           |   |   | 50.00  | %      |   |   | 50.00 | % |
| Front      Shadow Inc                      |   |   | -      |   |   |   | 100.00 | % |
| CalPetro      Tankers (Bahamas I) Limited  |   |   | 100.00 | %      |   |   | 100.00 | % |
| CalPetro      Tankers (Bahamas II) Limited |   |   | 100.00 | %      |   |   | 100.00 | % |

| CalPetro      Tankers (IOM) Limited |   |   | 100.00 | % |   |   | 100.00 | % |
|-------------------------------------|--------|--------|--------|---|--------|--------|--------|---|

----

|   | Summarised      balance sheet information of investees which the Company accounts for      under the equity method investees as of December 31, 2007 is as      follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (in      thousands of $) |   | 2007   |   |   | 2006   |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|
| Current      assets            |   |   | 19,639 |   |   |   | 71,320 |   |
| Non      current assets        |   |   | 64,558 |   |   |   | 139,983 |   |
| Current      liabilities       |   |   | 11,313 |   |   |   | 27,267 |   |
| Non      current liabilities   |   |   | 66,681 |   |   |   | 99,247 |   |

|   | Summarised      statement of operations information of investees which the Company      accounts for under the equity method as of December 31, 2007 is as      follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (in      thousands of $)         |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Net      operating revenues      |   |   | 35,020 |   |   |   | 28,876 |   |   |   | 27,377 |   |
| Net      operating (loss) income |   |   | 5,197  |   |   |   | 10,461 |   |   |   | 27,545 |   |
| Net      (loss) income           |   |   | 5,232  |   |   |   | 3,691  |   |   |   | 20,312 |   |

|   | Dividends      totalling $0.3 million were received from equity method investees in the      year ended December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | In      2007, the Company sold its entire investment in International Maritime      Exchange ASA (“IMAREX”) for net proceeds of $50.5 million resulting in a      gain on sale of $41.9 million which has been reported in gain from sale of      securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Front      Shadow is a wholly owned subsidiary of Ship Finance and      was incorporated during 2006 for the purpose of holding a single      capital asset and leasing that asset to a related party. Up until the      deconsolidation of Ship Finance, the entity was accounted for under the      equity method as it was determined that the entity was a VIE and that Ship      Finance was not the primary beneficiary under FIN 46(R).  As a      result of deconsolidation of Ship Finance in March 2007, Front Shadow is      no longer reported by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The      Company has determined that under FIN 46(R), it is not the primary      beneficiary of the VIEs CalPetro Tankers (Bahamas I) Limited (“CalPetro      BI”), CalPetro Tankers (Bahamas II) Limited (“CalPetro BII”) and CalPetro      Tankers (IOM) Limited (“CalPetro IOM”) and as such, these entities are      being equity accounted for. These companies were incorporated in 1994 for      the purpose of acquiring three oil tankers from Chevron Transport      Corporation (“Chevron”) and concurrently charter these vessels back to      Chevron on long-term charter agreements. The companies were acquired by      Independent Tankers Corporation (“ITC”) which in turn is a wholly owned      subsidiary of the Company. In April 2006, Chevron cancelled its bareboat      contract with CalPetro Tankers (Bahamas III) Limited (“CalPetro BIII”).      Under FIN 46(R) this was considered to be a reconsideration event and the      Company began consolidating the VIE into its accounts from that date. The      Company does not guarantee the debt of these entities and the net assets      of the three entities that are not consolidated total $4.1      million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | In      January 2007, the Company had a 33.3% investment in Sealift and accounted      for this investment under the equity method. In May 2007, the Company’s      investment was reduced to 17.1% and as a result of the Company’s inability      to exercise significant influence, the investment was accounted for as      marketable securities from that date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | In      February 2007, the Company had a 28.3% investment in Sea Production and      accounted for this investment under the equity method until it sold its      entire shareholding in June 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

| 17.    | INVESTMENT      IN FINANCE LEASES                                                                                                                                                                                                                                                                                                                                  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                               |
|   | Ship      Finance’s jack-up drilling rig was chartered on a long term fixed rate      bareboat charter to a subsidiary of Seadrill Limited (“Seadrill”). The      terms of the charter provide the charterer with various call options      throughout the charter period, which expires in 2021. Refer to Note 26 for      further information. |
|   |                                                                                                                                                                                                                                                                                                                                                               |
|   | The      following schedule lists the components of the net investment in finance      lease:                                                                                                                                                                                                                                                                      |

| (in      thousands of $)                                         |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Total      minimum lease payments to be received                 |   |   | -      |   |   |   | 297,277 |   |
| Estimated      residual values of leased property (unguaranteed) |   |   | -      |   |   |   | 60,000 |   |
| Less :      Unearned income                                 |   |   | -      |   |   |   | (158,528 | ) |
| Net      investment in finance leases                            |   |   | -      |   |   |   | 198,749 |   |

|   | As      a result of deconsolidation of Ship Finance, the Company no longer reports      any investments in finance leases.                                                                                                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                            |
| 18.    | DEFERRED      CHARGES                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                            |
|   | Deferred      charges represent debt arrangement fees that are      capitalised.  If a loan is repaid early, any unamortised portion      of the related deferred charges is charged against income in the period in      which the loan is repaid. The deferred charges are comprised of the      following amounts: |

| (in      thousands of $)      |   | 2007   |   |   | 2006   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|
| Debt      arrangement fees    |   |   | 384    |   |   |   | 24,102 |   |
| Accumulated      amortisation |   |   | (335   | )      |   |   | (7,165 | ) |
|                          |   |   | 49     |   |   |   | 16,937 |   |

|   | As      a result of the deconsolidation of Ship Finance, $16.8 million of deferred      charges previously reported in 2006 are no longer reported in the      Company’s results. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                    |
| 19.    | ACCRUED      EXPENSES                                                                                                                                                                   |

| (in      thousands of $)                             |   | 2007   |    |   | 2006   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Voyage      expenses                                 |   |   | 22,707  |   |   |   | 22,064 |   |
| Ship      operating expenses                         |   |   | 21,385  |   |   |   | 22,748 |   |
| Administrative      expenses                         |   |   | 6,634   |   |   |   | 6,618 |   |
| Interest      expense                                |   |   | 31,335  |   |   |   | 37,627 |   |
| Taxes                                                |   |   | 483     |   |   |   | 317 |   |
| Accrued      conversion costs for heavy lift vessels |   |   | 15,233  |   |   |   | - |   |
| Other                                                |   |   | 3,351   |   |   |   | 942 |   |
|                                                 |   |   | 101,128 |   |   |   | 90,316 |   |

| 20. | OTHER      CURRENT LIABILITIES |
|-----|--------------------------------|

| (in      thousands of $)                                    |   | 2007   |    |   | 2006   |   |
|-------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Accrued      charterhire                                    |   |   | 708     |   |   |   | 681 |   |
| Proceeds      from sale and conversion of vessels, deferred |   |   | 124,597 |   |   |   | - |   |
| Other                                                       |   |   | 7,005   |   |   |   | 8,356 |   |
|                                                        |   |   | 132,310 |   |   |   | 9,037 |   |

----

|   | The      Company sold four converted heavy lift vessels and two Suezmax vessels to      Dockwise in March 2007 with the Company being responsible for the      conversion of four Suezmax vessels into heavy lift vessels with delivery      staggered between May 2007 and June 2008. The net proceeds were deferred      with gains being recognised in the consolidated statement of operations as      each converted vessel is delivered to Dockwise. Two converted vessels were      delivered during the year and the balance of proceeds relating to the      remaining two converted vessels is being deferred until delivery of the      last two vessels which is expected in the second quarter of      2008. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 21.    | DEBT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|  (in      thousands of $)                                                       |   | 2007   |    |   | 2006   |   |
|--------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| US      Dollar denominated floating rate debt (LIBOR + 0.50% ) due through      2008 |   |   | 80,000  |   |   |   | 1,602,920 |   |
| 8.5%      Senior Notes due 2013                                                      |   |   | -       |   |   |   | 449,080 |   |
| Serial      Notes (6.5% to 6.68%) due through 2010                                   |   |   | 17,100  |   |   |   | 30,800 |   |
| Term      Loans (8.52%) due 2015                                                     |   |   | 11,328  |   |   |   | 12,744 |   |
| Term      Notes (7.84% to 8.04%) due through 2021                                    |   |   | 364,860 |   |   |   | 366,200 |   |
|                                                                                 |   |   | 473,288 |   |   |   | 2,461,744 |   |
| Credit      facilities                                                               |   |   | 246     |   |   |   | 1,550 |   |
| Total      debt                                                                      |   |   | 473,534 |   |   |   | 2,463,294 |   |
| Less:      short-term and current portion of long-term debt                          |   |   | (96,811 | )      |   |   | (281,409 | ) |
|                                                                                 |   |   | 376,723 |   |   |   | 2,181,885 |   |

|   | The      outstanding debt as of December 31, 2007 is repayable as      follows: |
|--------|---------------------------------------------------------------------------------|

| (in      thousands of $)      |   |   |    |
|-------------------------------|--------|--------|---------|
| Year      ending December 31, |   |   |    |
| 2008                          |   |   | 96,811  |   |
| 2009                          |   |   | 13,144  |   |
| 2010                          |   |   | 13,045  |   |
| 2011                          |   |   | 17,425  |   |
| 2012                          |   |   | 22,120  |   |
| 2013      and later           |   |   | 310,989 |   |
|                          |   |   | 473,534 |   |

|   | The      weighted average interest rate for the floating rate debt denominated in      US dollars was 5.93% as of December 31, 2007 (2006 – 5.39%). The 2006      interest rate takes into consideration related interest rate swaps held by      Ship Finance.                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                     |
|   | As      a result of the deconsolidation of Ship Finance, $1,915.2 million of debt      as of December 31, 2006 is no longer reported in the Company’s      consolidated balance sheet.                                                                                             |
|   |                                                                                                                                                                                                                                                                                     |
|   | US      DOLLAR DENOMINATED FLOATING RATE DEBT EXCLUDING SHIP    FINANCE                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                     |
|   | $20.0      million term loan facility                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                     |
|   | In      October 2004, the Company entered into a $20.0 million secured term loan      facility. The facility bore interest at LIBOR plus a margin. The loan was      repaid in full in February 2007.                                                                                    |
|   |                                                                                                                                                                                                                                                                                     |
|   | $69.0      million term loan facility                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                     |
|   | In      December 2005, the Company entered into a $69.0 million loan facility with      DnB NOR Bank ASA. The facility bore interest at LIBOR plus a margin and      was secured by certain marketable securities and cash deposits. The      facility was repaid in full in August2006. |

----

|   | $24.0      million term loan facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | In      September 2006, the Company entered into a $24.0 million secured term loan      facility.  The facility bore interest at LIBOR plus a margin.      The facility was repaid in April 2007.                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | $20.0      million term loan facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | In      January 2005, the Company entered into a $20.0 million secured term loan      facility. The facility bore interest at LIBOR plus a margin. The facility      was repaid in full in July 2007.                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | $80.0      million term loan facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | In      June 2006, the Company entered into a $80.0 million secured term loan      facility.  The facility bears interest at LIBOR plus a margin.      The facility is due June 2008 and is expected to be refinanced. The      facility contains a minimum value covenant and covenants that require the      Company to maintain a minimum level of free cash and positive working      capital.                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | TERM      AND SERIAL NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | ITC      is the holding company for three separate structures involved in financing      and leasing transactions. One of these structures has Serial Notes      maturing between 2007 and 2010 and two of these structures have Term Notes      maturing between 2019 and 2021. The Notes are collateralised by first      preferred mortgages on the vessels owned by the ITC subsidiaries. As of      December 31, 2007, the effective interest rate for the Term and Serial      Notes was 7.85% (2006 – 7.80%). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The      7.84% First Preferred Mortgage Term Notes due 2021 and the 8.04% First      Preferred Mortgage Term Notes due 2019 are each subject to redemption      through the operation of mandatory sinking funds according to the schedule      of sinking fund redemption payments set forth below.  The      sinking fund redemption price is 100% of the principal amount of Term      Notes being redeemed, together with accrued and unpaid interest to the      date fixed for redemption.                 |

| (in      thousands of $)      |   |   |    |
|-------------------------------|--------|--------|---------|
| Year      ending December 31, |   |   |    |
| 2008                          |   |   | 5,765   |   |
| 2009                          |   |   | 7,600   |   |
| 2010                          |   |   | 11,115  |   |
| 2011                          |   |   | 16,635  |   |
| 2012                          |   |   | 21,270  |   |
| 2013      and later           |   |   | 302,475 |   |
|                          |   |   | 364,860 |   |

----

|   | TERM      LOANS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Principal      is repayable on the 8.52% Term Loans due 2015 in accordance with a      remaining eight year sinking fund schedule. Of the four entities reporting      these term loans, only one entity, CalPetro BIII is consolidated as the      remaining three entities are accounted for under the equity method under      FIN 46(R). As discussed above, CalPetro BIII’s initial charter with      Chevron was terminated on April 1, 2006 and as such, the revised sinking      fund redemption amounts and final principal payment is as      follows: |

| Scheduled      payment date |   | Amount$’000 |   |
|-----------------------------|--------|-------------------|--------|
| 2008                        |   |              | -      |   |
| 2009                        |   |              | 444    |   |
| 2010                        |   |              | 730    |   |
| 2011                        |   |              | 790    |   |
| 2012                        |   |              | 850    |   |
| 2013      and later         |   |              | 8,514  |   |
|                        |   |              | 11,328 |   |

|   | US      DOLLAR DENOMINATED FLOATING RATE DEBT INCURRED BY SHIP FINANCE AS OF      DECEMBER 31, 2006                                                                                                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | $1,131.4      million secured term loan facility                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In      February 2005, Ship Finance entered into a $1,131.4 million term loan      facility with a syndicate of banks.  The proceeds from the      facility were used to repay the $1,058.0 million syndicated senior secured      credit facility and for general corporate purposes. The facility bears      interest at LIBOR plus a margin. The facility is repayable over a term of      six years. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In      September 2006, Ship Finance signed an agreement whereby the existing debt      facility, which had been partially repaid, was increased by $219.7 million      to the original amount of $1,131.4 million.  The increase is      available on a revolving basis.                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | $350.0      million combined senior and junior secured term loan    facility                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In      June 2005, Ship Finance entered into a combined $350.0 million senior and      junior secured term loan facility with a syndicate of      banks.  The proceeds from the facility were used to fund the      acquisition of five new VLCCs. The facility bears interest at LIBOR plus a      margin. The facility is repayable over a term of seven    years.                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | $210.0      million secured term loan facility                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In      April 2006, Ship Finance entered into a $210.0 million secured term loan      facility with a syndicate of banks to partly fund the acquisition of five      new container vessels.  The facility bears interest at LIBOR      plus a margin and is repayable over a term of 12 years.                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | $165.0      million secured term loan facility                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In      June 2006, Ship      Finance entered into a $165.0 million secured term loan facility with a      syndicate of banks. The proceeds of the facility were used to partly fund      the acquisition of the jack up drilling rig West Ceres. The facility      currently bears interest at LIBOR plus a margin and is repayable over a      term of six years.                                                 |

----

|   | 8.5%      SENIOR NOTES DUE 2013                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | On      December 15, 2003, Ship Finance issued $580 million of senior notes.      Interest on the notes is payable in cash semi-annually in arrears on      June 15 and December 15. The notes are not redeemable prior to      December 15, 2008 except in certain circumstances. After that date, Ship      Finance may redeem notes at redemption prices which reduce from 104.25 per      cent in 2008 to 100 per cent in 2011 and thereafter.                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      February 2006, Ship Finance entered into a total return bond swap line      with a bank for a term of 12 months.  The bond swap line has      been extended for a period up to August 2009. As of December 31, 2006,      Ship Finance held bonds with a principal amount of $52 million under this      agreement.  In February 2007, Ship Finance entered into an      additional bond swap line with a second bank for a term of 12      months. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      2006, Ship Finance bought back and cancelled notes with a principal amount      of $8.0 million. As of December 31, 2006, the outstanding amount of Notes      was $449.1 million.                                                                                                                                                                                                                                                                                      |

| (in      thousands of $)                                                               |   | 2007   |    |   | 2006   |   |
|----------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Ship      mortgages                                                                    |   |   | 204,876 |   |   |   | 2,494,526 |   |
| Restricted      bank deposits (excluding amounts held in charter service      reserve) |   |   | 424,677 |   |   |   | 408,432 |   |

| 22.    | SHARE      CAPITAL             |
|--------|--------------------------------|
|   |                           |
|   | Authorised      share capital: |

| (in      thousands of $, except share data)    |   | 2007   |    |   | 2006   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|
| 125,000,000      ordinary shares of $2.50 each |   |   | 312,500 |   |   |   | 312,500 |   |

|   | Issued      and fully paid share capital: |
|--------|-------------------------------------------|

| (in      thousands of $, except share data)                      |   | 2007   |    |   | 2006   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| 74,825,169      ordinary shares of $2.50 each (2006: 74,825,169) |   |   | 187,063 |   |   |   | 187,063 |   |

|   | The      Company’s ordinary shares are listed on the New York Stock Exchange, the      Oslo Stock Exchange and the London Stock Exchange.                                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                        |
|   | In      September 2007, the Company reduced its additional paid in capital account      by $480.8 million and the amount resulting from the reduction was credited      to the Company’s contributed surplus account. |
|   |                                                                                                                                                                                                                        |
| 23.    | ACCUMULATED      OTHER COMPREHENSIVE INCOME                                                                                                                                                                                 |
|   | The      activity in Accumulated Other Comprehensive Income may be summarised as      follows:                                                                                                                              |

|                                                                        |   | Unrealised      investment gains (losses) |    |   | Translation      adjustments and other |   |   | Total  |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------------|---------|--------|----------------------------------------|--------|--------|--------|--------|
| Balance      at December 31, 2004                                           |   |                                      | 10,427  |   |                                   |   | (5,013 | )      |   |   | 5,414 |   |
| Translation      adjustment for the year                                    |   |                                      | -       |   |                                   |   | (221   | )      |   |   | (221 | ) |
| Net      unrealised gains and losses for the year                           |   |                                      | 655     |   |                                   |   | -      |   |   |   | 655 |   |
| Reclassification      adjustments for realised gains included in net income |   |                                      | (12,532 | )      |                                   |   | -      |   |   |   | (12,532 | ) |
| Balance      at December 31, 2005                                           |   |                                      | (1,450  | )      |                                   |   | (5,234 | )      |   |   | (6,684 | ) |
| Translation      adjustment for the year                                    |   |                                      | -       |   |                                   |   | 538    |   |   |   | 538 |   |

----

|                                                                        |   | Unrealised      investment gains (losses) |   |   | Translation      adjustments and other |   |   | Total  |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|----------------------------------------|--------|--------|--------|--------|
| Net      unrealised gains and losses for the year                           |   |                                      | 295    |   |                                   |   | -      |   |   |   | 295 |   |
| Reclassification      adjustments for realised gains included in net income |   |                                      | 1,426  |   |                                   |   | -      |   |   |   | 1,426 |   |
| Balance      at December 31, 2006                                           |   |                                      | 271    |   |                                   |   | (4,696 | )      |   |   | (4,425 | ) |
| Translation      adjustment for the year                                    |   |                                      | -      |   |                                   |   | 1,324  |   |   |   | 1,324 |   |
| Net      unrealised gains and losses for the year                           |   |                                      | (324   | )      |                                   |   | -      |   |   |   | (324 | ) |
| Reclassification      adjustments for realised gains included in net income |   |                                      | (271   | )      |                                   |   | -      |   |   |   | (271 | ) |

| Balance      at December 31, 2007 |   |   | (324 | ) |   |   | (3,372 | )  |   |   | (3,696 | ) |
|-----------------------------------|--------|--------|------|---|--------|--------|--------|---------|--------|--------|--------|---|

| 24.    | SHARE      OPTION PLANS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | In      November 2006, the Company’s board of directors approved the Frontline Ltd      Share Option Scheme (the “Frontline Scheme”).  The Frontline      Scheme permits the board of directors, at its discretion, to grant options      to acquire shares in the Company to employees and directors of the Company      or its subsidiaries and will expire in November 2016.  The      subscription price for all options granted under the scheme will be      reduced by the amount of all dividends declared by the Company in the      period from the date of grant until the date the option is exercised,      provided the subscription price is never reduced below the par value of      the share.  Options granted under the scheme will vest at a date      determined by the board at the date of the grant.  The options      granted under the plan to date vest over a period of one to three      years.  There is no maximum number of shares authorised for      awards of equity share options and authorised, unissued or treasury shares      of the Company may be used to satisfy exercised    options. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The      fair value of each option award is estimated on the date of the grant      using a Black Scholes option valuation model with the following      assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

|                         |   | 2006           |   |
|------------------------------|--------|----------------|--------|
| Risk      free interest rate |   |           | 4.74   | % |
| Expected      life           |   | 3.5      years |   |
| Expected      volatility     |   |           | 44     | % |
| Expected      dividend yield |   |           | 0      | % |

|   | The      risk-free interest rate was estimated using the interest rate on 3 year US      treasury zero coupon issues.  The volatility was estimated using      historical share price data.  The dividend yield has been      estimated at 0% as the exercise price is reduced by all dividends declared      by the company from the date of grant to the exercise      date.   It is assumed that all options granted under the      plan will vest. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

|   | The      following summarises share option transactions related to the Frontline      Scheme: |
|--------|-----------------------------------------------------------------------------------------------|

| (in      thousands except per share data)        |   | Options |   |   | Exercise      Price |            |
|--------------------------------------------------|--------|---------|--------|--------|---------------------|-----------------|
| Options      outstanding as of December 31, 2005 |   |    | -      |   |                |            | - |   |
| Granted                                          |   |    | 100    |   |                | NOK      238.50 |   |
| Exercised                                        |   |    | -      |   |                |            | - |   |
| Cancelled                                        |   |    | -      |   |                |            | - |   |
| Options      outstanding as of December 31, 2006 |   |    | 100    |   |                | NOK      238.50 |   |
| Granted                                          |   |    | -      |   |                |            | - |   |
| Exercised                                        |   |    | -      |   |                |            | - |   |
| Cancelled                                        |   |    | -      |   |                |            | - |   |
| Options      outstanding as of December 31, 2007 |   |    | 100    |   |                | NOK      175.70 |   |
|                                             |   |    |   |   |                |            |   |   |
| Exercisable      options                         |   |    | 33.3   |   |                | NOK      162.36 |   |

|   | The      weighted average grant-date fair value of options granted during 2006 is      $15.23.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | As      of December 31, 2007, there was $0.6 million in unrecognised compensation      cost related to non-vested options granted under the Frontline      Scheme.  The compensation expense will be recognised over a      period of three years in accordance with vesting conditions. Compensation      expense recognised in the years ended December 31, 2007 and 2006 were $0.9      million and nil respectively.                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 25.    | FINANCIAL      INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Interest      rate risk management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Interest      rate swaps                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | In      certain situations, the Company may enter into financial instruments to      reduce the risk associated with fluctuations in interest rates. Ship      Finance has a portfolio of swaps that swap floating rate interest to fixed      rate, which from a financial perspective hedge interest rate exposure. The      counterparties to such contracts are Credit Agricole Indosuez, Deutsche      Schiffsbank, DnB NOR ASA, Skandinaviska Enskilda Banken AB, Fortis Bank,      Scotia Bank, Nordea Bank Norge ASA, Citibank, HSH Nordbank, HBOS, and      NIBC. Credit risk exists to the extent that the counterparties are unable      to perform under the contracts.The Company no longer consolidates Ship      Finance and therefore no longer reports Ship Finance’s portfolio of      swaps. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The      Company does not hold or issue instruments for speculative or trading      purposes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

----

|   | The      Company managed its debt portfolio with interest rate swap agreements in      U.S. dollars to achieve an overall desired position of fixed and floating      interest rates. As of December 31, 2006, Ship Finance had entered into the      following interest rate swap transactions involving the payment of fixed      rates in exchange for LIBOR: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Principal(in thousands of      $) |    | Inception      Date | Maturity      Date |                                              | Fixed      Interest Rate |   |
|-----------------------------------|---------|---------------------|--------------------|---------------------------------------------------|--------------------------|--------|
| $                                 | 50,000  |                | February      2004 | February      2009                                |                     |   | 3.49 | % |
| $                                 | 100,000 |                | February      2004 | February      2009                                |                     |   | 3.49 | % |
| $                                 | 50,000  |                | February      2004 | February      2009                                |                     |   | 3.35 | % |
| $                                 | 50,000  |                | February      2004 | February      2009                                |                     |   | 3.49 | % |
| $                                 | 50,000  |                | February      2004 | February      2009                                |                     |   | 3.35 | % |
| $                                 | 50,000  |                | February      2004 | February      2009                                |                     |   | 3.35 | % |
| $                                 | 50,000  |                | February      2004 | February      2009                                |                     |   | 3.37 | % |
| $                                 | 25,000  |                | February      2004 | February      2009                                |                     |   | 3.32 | % |
| $                                 | 25,000  |                | February      2004 | February      2009                                |                     |   | 3.32 | % |
| $                                 | 25,000  |                | February      2004 | February      2009                                |                     |   | 3.33 | % |
| $                                 | 25,000  |                | February      2004 | February      2009                                |                     |   | 3.32 | % |
| $                                 | 41,588  |                | April      2006    |    November      2018              |                     |   | 5.64 | % |
| $                                 | 41,588  |                | April      2006    |    March      2019                 |                     |   | 5.64 | % |
| $                                 | 41,588  |                | April      2006    |      April      2019     |                     |   | 5.64 | % |
| $                                 | 41,588  |                | April      2006    |       May      2019 |                     |   | 5.64 | % |
| $                                 | 41,588  |                | April      2006    |       May      2019 |                     |   | 5.64 | % |
| $                                 | 14,849  |                | February      2004 | August      2008                                  |                     |   | 6.24 | % |
| $                                 | 15,919  |                | February      2004 | August      2008                                  |                     |   | 6.24 | % |

|   | As      of December 31, 2006, the notional principal amounts subject to such swap      agreements were $738.7 million.                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                   |
|   | Foreign      currency risk                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                   |
|   | The      majority of the Company’s transactions, assets and liabilities are      denominated in U.S. dollars, the functional currency of the Company.      Certain of the Company’s subsidiaries report in Sterling or Norwegian      kroner and risks of two kinds arise as aresult: |

| ·   | a      transaction risk, that is, the risk that currency fluctuations will have a      negative effect on the value of the Company’s cash  flows; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a      translation risk, that is, the impact of adverse currency fluctuations in      the translation of foreign operations and foreign assets and liabilities      into U.S. dollars for the Company’s consolidated financial      statements. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Accordingly,      such risk may have an adverse effect on the Company’s financial condition      and results of operations. The Company has not entered into      derivative contracts for either transaction or translation      risk.                                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Forward      freight contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      Company may enter into forward freight contracts, futures and option      contracts in order to manage its exposure to the risk of movements in the      spot market for certain trade routes for speculative purposes. Market risk      exists to the extent that spot market fluctuations have a negative effect      on the Company’s cash flows and consolidated statements of operations. As      of December 31, 2007 and 2006, the Company had no such contracts      outstanding. |

----

|   | Fair      Values                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The      carrying value and estimated fair value of the Company’s financial      instruments as of December 31, 2007 and 2006 are as    follows: |

|                                               |   | 2007                |    |   | 2006            |   |
|----------------------------------------------------|--------|---------------------|---------|--------|-----------------|--------|
|  (in      thousands of $)                     |   | Carrying      Value |    |   | Fair      Value |   |   | Carrying      Value |   |   | Fair      Value |   |
| Non-Derivatives:                                   |   |                |    |   |            |   |   |   |   |   |   |   |
| Cash      and cash equivalents                     |   |                | 168,432 |   |            |   | 168,432 |   |   |   | 197,181 |   |   |   | 197,181 |   |
| Restricted      cash                               |   |                | 651,377 |   |            |   | 651,377 |   |   |   | 677,533 |   |   |   | 677,533 |   |
| Marketable      securities                         |   |                | 15,684  |   |            |   | 15,684 |   |   |   | 1,469 |   |   |   | 1,469 |   |
| Floating      rate debt and credit facilities      |   |                | 80,246  |   |            |   | 80,246 |   |   |   | 1,604,470 |   |   |   | 1,604,470 |   |
| 8.5%      Senior notes                             |   |                | -       |   |            |   | - |   |   |   | 449,080 |   |   |   | 448,799 |   |
| Serial      Notes (6.5% to 6.68%) due through 2010 |   |                | 17,100  |   |            |   | 17,405 |   |   |   | 30,800 |   |   |   | 31,307 |   |
| 8.52%      Term Loan, due 2015                     |   |                | 11,328  |   |            |   | 12,169 |   |   |   | 12,744 |   |   |   | 13,588 |   |
| Term      Notes (7.84% to 8.04%) due through 2019  |   |                | 364,860 |   |            |   | 405,923 |   |   |   | 366,200 |   |   |   | 383,492 |   |
|                                               |   |                |    |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives:                                       |   |                |    |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate swap transactions receivable    |   |                | -       |   |            |   | - |   |   |   | 17,807 |   |   |   | 17,807 |   |
| Interest      rate swap transactions payable       |   |                | -       |   |            |   | - |   |   |   | (8,743 | ) |   |   | (8,743 | ) |
| Bond      swaps                                    |   |                | -       |   |            |   | - |   |   |   | 2,931 |   |   |   | 2,931 |   |

|   | The      carrying value of cash and cash equivalents, which are highly liquid, is a      reasonable estimate of fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      estimated fair value of marketable securities is based on the quoted      market price of these or similar instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      estimated fair value for floating rate long-term debt is considered to be      equal to the carrying value since it bears variable interest rates, which      are reset on a quarterly basis. The estimated fair value for fixed rate      long-term senior notes is based on the quoted market price. The estimated      fair value for the remaining fixed rate long-term loans and notes is based      on the quoted market price of these or similar instruments when      available.                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      fair value of interest rate swaps is estimated by taking into account the      cost of entering into interest rate swaps to offset the Company’s      outstanding swaps.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      February 2006, Ship Finance entered into a total return bond swap line      with Fortis Bank for a term of twelve months. This swap facilitated the      repurchase of Ship Finance’s 8.5% Senior Notes in the amount of $50.0      million. The fair value of the bond swap is estimated by taking into      account the cost of entering into the bond swap to offset Ship Finance’s      outstanding bond swap.                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Concentrations      of risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | There      is a concentration of credit risk with respect to cash and cash      equivalents to the extent that substantially all of the amounts are      carried with Skandinaviska Enskilda Banken (“SEB”), The Bank of New York      and Nordea Bank Norge (“Nordea”). There is a concentration of credit risk      with respect to restricted cash to the extent that substantially all of      the amounts are carried with SEB, Nordea, Pacific Life, The Bank of New      York, HSBC Midland, CIBC World Markets and JP Morgan Chase. However, the      Company believes this risk is remote as these banks are high credit      quality financial institutions. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      majority of the vessels’ gross earnings are receivable in U.S. dollars.      During the year ended December 31, 2007, one customer accounted for      more than 10% of our consolidated operating revenues (2006 and 2005: one      customer).                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

| 26.    | RELATED      PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      June 2006, Ship Finance purchased the jack-up rig West Ceres from a      subsidiary of Seadrill for a total consideration of $210.0 million. Upon      delivery to Ship Finance, the rig was immediately chartered back to the      subsidiary under a 15-year bareboat charter agreement, fully guaranteed by      Seadrill, who has options to buy back the rig after three, five, seven,      10, 12 and 15 years.                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      September 2006, Ship Finance acquired the Panamax Golden Shadow for $28.4      million from Golden Ocean. The vessel was chartered back to Golden Ocean      for a period of 10 years.  As part of the agreement, Golden      Ocean provided an interest free and non-amortizing seller’s credit of $2.6      million.  Golden Ocean has been granted fixed purchase options      after three, five, seven and 10 years.  At the end of the      charter, Ship Finance has an option to sell the vessel back to Golden      Ocean at an agreed fixed price of $10.4 million, including the $2.6      million seller’s credit. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      August 2007, the Company sold the single hull vessel Front Horizon to a      subsidiary of Farahead Holdings Limited for net proceeds of $28.0 million      resulting in a net gain of $6.2 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | As      of March 31, 2007, the Company is no longer consolidating the results of      Ship Finance. The majority of the Company’s leased vessels are leased from      Ship Finance and under a Charter Ancillary Agreement, Ship Finance is      entitled to a share of the Company’s earnings on these leased vessels. A      summary of leasing transactions with Ship Finance during the year ended 31      December 2007 (excluding amounts prior to deconsolidation) is as      follows:                                                                                                                                                                       |

| (in      thousands of $)                         |   | 2007   |      |
|--------------------------------------------------|--------|--------|-----------|
| Charterhire      paid (principal and interest)   |   |   | 273,239   |   |
| Payments      received for termination of leases |   |   | 29,343    |   |
| Profit      share expense                        |   |   | 37,279    |   |
| Remaining      lease obligation                  |   |   | 1,767,758 |   |

|   | A      summary of net amounts earned and balances with related parties excluding      charterhire is as follows: |
|--------|------------------------------------------------------------------------------------------------------------------|

| Net      amounts earned from related parties            |   | Year      ended December 31, |   |
|---------------------------------------------------------|--------|------------------------------|--------|
| (in      thousands of $)                                |   | 2007                         |   |   | 2006 |   |   | 2005 |   |
| Seatankers      Management Co. Ltd                      |   |                         | 582    |   |   |   | 432 |   |   |   | 265 |   |
| Golar      LNG Limited                                  |   |                         | 284    |   |   |   | 180 |   |   |   | 255 |   |
| Ship      Finance International Limited                 |   |                         | 1,525  |   |   |   | - |   |   |   | - |   |
| Norse      Energy Group ASA (formerly Northern Oil ASA) |   |                         | -      |   |   |   | - |   |   |   | 6 |   |
| Golden      Ocean Group Limited                         |   |                         | 2,099  |   |   |   | 597 |   |   |   | 362 |   |
| Individual      related to John Fredriksen              |   |                         | -      |   |   |   | 12 |   |   |   | - |   |
| Aktiv      Kapital First Investment Ltd                 |   |                         | -      |   |   |   | - |   |   |   | 10 |   |
| Greenwich      Holdings Ltd                             |   |                         | 69     |   |   |   | - |   |   |   | - |   |
| Bryggegata      AS                                      |   |                         | (1,430 | ) |   |   | (1,021 | ) |   |   | (692 | ) |
| Seadrill      Limited                                   |   |                         | (52    | ) |   |   | 545 |   |   |   | (24 | ) |
| CalPetro      Tankers (Bahamas I) Limited               |   |                         | 40     |   |   |   | 40 |   |   |   | 38 |   |
| CalPetro      Tankers (Bahamas II) Limited              |   |                         | 40     |   |   |   | 40 |   |   |   | 38 |   |
| CalPetro      Tankers (Bahamas III) Limited             |   |                         | -      |   |   |   | - |   |   |   | 38 |   |
| CalPetro      Tankers (IOM) Limited                     |   |                         | 40     |   |   |   | 40 |   |   |   | 38 |   |

----

|   | Net      amounts earned from related parties comprise office rental income and      management, technical and commercial advisory, newbuilding supervision,      corporate and administrative service income. Net expenses paid to related      parties comprise primarily of rental for office  space. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Receivables      (payables) with related parties |   | As      of December 31, |    |
|--------------------------------------------------|--------|-------------------------|---------|
| (in      thousands of $)                         |   | 2007                    |    |   | 2006 |   |
| Ship      Finance International Limited          |   |                    | (36,718 | ) |   |   | - |   |
| Seatankers  Management      Co. Ltd    |   |                    | (900    | ) |   |   | 275 |   |
| Golar      LNG Limited                           |   |                    | 93      |   |   |   | (553 | ) |
| Northern      Offshore Ltd                       |   |                    | 13      |   |   |   | 49 |   |
| Golden      Ocean Group Limited                  |   |                    | 1,160   |   |   |   | 942 |   |
| Seadrill      Limited                            |   |                    | 73      |   |   |   | 30 |   |
| Greenwich      Holdings                          |   |                    | 51      |   |   |   | - |   |
| CalPetro      Tankers (Bahamas I) Limited        |   |                    | 13      |   |   |   | 10 |   |
| CalPetro      Tankers (Bahamas II) Limited       |   |                    | 13      |   |   |   | 10 |   |
| CalPetro      Tankers (IOM) Limited              |   |                    | 13      |   |   |   | 10 |   |

|   | Receivables      and payables with related parties comprise unpaid management, technical      advisory, newbuilding supervision, administrative service and rental      charges.  In addition, certain payables and receivables arise      when the Company pays an invoice on behalf of a related party and vice      versa.  The payable with Ship Finance also includes unpaid      profit share due to Ship Finance. Receivables and payables with related      parties are generally settled quarterly in arrears with the exception of      profit share due to Ship Finance which is settled  annually. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Ship      Finance, Golar, Northern Offshore, Norse Energy, Aktiv Kapital, Seadrill,      Bryggegata AS, Golden Ocean, Greenwich, Farahead and Seatankers are each      subject to the significant influence or indirect control of John      Fredriksen.  CalPetro BI, CalPetro BII, CalPetro BIII and      CalPetro IOM were all equity accounted until March 31, 2006 at which      point, the Company began consolidating CalPetro BIII.                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | During      the year ended December 31, 2007, the Company held investments in Sea      Production and Dockwise and earned income from these companies in the form      of rental income and income earned from the provision of accounting      services totalling $1.0 million. During the year, the Company disposed of      its entire investments in these companies and they are no longer      considered to be related parties. Refer to Note 27 for further      discussion on gains from disposal of assets relating to Sea Production and      Dockwise.                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | The      Company also entered into bareboat contracts with Dockwise for five of the      vessels sold with the charters expiring when the vessels entered the yard      for conversion. As of December 31, 2007, charters for the two Suezmax      vessels were still in place with termination expected in the second      quarter of 2008. The Company is not responsible for the conversion of      these two vessels. Charterhire paid to Dockwise in the year ended December      31, 2007 was $13.5 million.                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 27.    | DISPOSAL      OF ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In      March 2007, the Company sold the single hull vessel Front Transporter for      a net gain of $21.3 million which is reported as a gain on sale of      assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As      of December 31, 2006, the Company’s wholly owned subsidiary Sea Production      held a 70% interest in Puffin Ltd (“Puffin”). Frontline FPSO Ltd      (“Frontline FPSO”), a wholly owned subsidiary of Puffin, owned the vessel      Front Puffin which was undergoing conversion into a FPSO vessel. In      January 2007, Sea Production changed its name to Frontline Floating      Production Ltd (“Frontline Floating Production”) and in February 2007, the      Company set up another wholly owned subsidiary named Sea Production Ltd      (“Sea Production”) with a view to spinning off its FPSO activities through      Sea Production. In February 2007, Frontline Floating Production sold all      its assets to Sea Production for a total consideration of $93.7 million.      Simultaneously, Sea Production completed a private placement raising      $180.0 million in equity. Frontline subscribed for 25.5 million shares for      a total consideration of $51.0 million resulting in a 28.33% investment in      Sea Production. A gain of $39.8 million has been recorded as a gain on      issuance of shares by associates. The Company accounted for its investment      in Sea Production under the equity method until the disposal of its entire      shareholding in Sea Production in June 2007 resulting in a net gain of      $31.2 million which has been recorded as gain on sale of      securities.                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      March 2007, Sealift acquired six single hull vessels, of which four were      to be converted to heavy lift vessels, for a total purchase price of      $476.0 million which was based on the estimated market value of the four      converted heavy lift vessels and the two single hull Suezmax vessels. The      purchase price includes $80.0 million short term seller’s credit from the      Company which has been allocated equally to each of the last two remaining      converted heavy lift vessels. This seller’s credit will be payable on      delivery of each vessel. The sale of vessels to Sealift included an      obligation on the Company to manage, supervise and pay the conversion      costs for the four heavy lift vessels. The gain on sale arising from this      transaction has been allocated to each vessel with $60.0 million of the      gain being accounted for as an adjustment against the Company’s      investment. The gain is recognised as each vessel is delivered. The two      Suezmax vessels and two converted vessels were successfully delivered to      Dockwise in 2007 resulting in a net gain of $60.7 million which has been      recorded as a gain on sale of assets. The remaining two converted vessels      are scheduled to be delivered in the second quarter of 2008 and conversion      costs are currently being recorded in newbuildings. As of December 31,      2007, total deferred proceeds of $124.6 million from the sale and      conversion of vessels are recorded in other current      liabilities. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The      Company accounted for its 33.3% investment in Sealift under the equity      method. In May 2007, Sealift issued 94.1 million shares to the      shareholders of Dockwise in exchange for all the shares and convertible      securities of the entities owned by Dockwise. Sealift also completed a      private placement for 39.8 million shares with the Company subscribing for      5 million shares. Sealift subsequently changed its name to Dockwise. A      gain of $43.7 million has been recorded as a gain on issuance of shares by      associates as a result. Subsequent to this transaction, the Company      accounted for its 17.1% investment in Dockwise as marketable securities.      In October 2007, the Company sold its entire investment in Dockwise for a      net gain of $48.7 million which has been recorded as gain on sale of      securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      June 2007, Ship Finance sold the single hull vessel Front Vanadis to a      third party and as a result, terminated the Company’s long-term lease for      the vessel. The Company received a termination payment of $13.2 million      and recorded a net gain of $13.3 million as a gain on sale of      assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      August 2007, the Company sold the single hull vessel Front Horizon for a      net gain of $6.2 million which has been recorded as again on sale of      assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      November 2007, the Company sold its entire investment in International      Maritime Exchange ASA (“IMAREX”) for net proceeds of $50.5 million      resulting in a gain on sale of $41.9 million which has been reported in      gain from sale of securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | In      December 2007, Ship Finance sold the single hull vessel Front Birch to a      third party and as a result, terminated the Company’s long-term lease for      the vessel. The Company received a termination payment of $16.2 million      and recorded a net gain of $16.6 million as a gain on sale of      assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

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| 28.    | MINORITY      INTEREST AND DIVIDEND DISTRIBUTION TO SHAREHOLDERS                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                             |
|   | The      Company accounts for pro-rata distributions to owners in a spin-off at the      book value of shares distributed and accounts for non pro-rata      distributions to owners in a spin-off at the fair value of shares      distributed. |
|   |                                                                                                                                                                                                                                             |
|   | A      summary of pro-rata partial spin offs of Ship Finance by the Company are      as follows:                                                                                                                                                 |

| DistributionDate        |   | %      Frontline holdingDistributed |   |   | Distribution      Ratio (Ship Finance/ Frontline shares held) |   |   | Value      of dividend$      millions |   |
|-------------------------|--------|-------------------------------------|--------|--------|---------------------------------------------------------------|--------|--------|---------------------------------------|--------|
| June      16, 2004      |   |                                | 25.0   | %      |                                                          |   | 1/4    |                                  |   | $ | 142.5 |   |
| September      24, 2004 |   |                                | 9.9    | %      |                                                          |   | 1/10   |                                  |   | $ | 59.8 |   |
| December      15, 2004  |   |                                | 13.3   | %      |                                                          |   | 2/15   |                                  |   | $ | 85.7 |   |
| February      18, 2005  |   |                                | 25.0   | %      |                                                          |   | 1/4    |                                  |   | $ | 154.9 |   |
| March      24, 2005     |   |                                | 10.0   | %      |                                                          |   | 1/10   |                                  |   | $ | 57.0 |   |
| March      20, 2006     |   |                                | 5.14   | %      |                                                          |   | 1/20   |                                  |   | $ | 27.8 |   |
| March      22, 2007     |   |                                | 11.1   | %      |                                                          |   | 3/28   |                                  |   | $ | 162.2 |   |

|   | The      value of the non-cash dividend is valued based on the book value of Ship      Finance at the date of distribution. As a result of the final distribution      on March 2007, the Company no longer consolidates Ship Finance and      therefore no longer reports any related minority  interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | In      November 2006, 30% of shares in Puffin Ltd, a subsidiary of the Company,      were issued to a third party for $7.8 million as part of the proposed spin      off of the Company’s FPSO (Floating Production, Storage and Offloading)      operations. In February 2007, the Company sold its entire investment in      Puffin Ltd to Sea Production and no longer reports any related minority      interest.                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 29.    | COMMITMENTS      AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The      Company insures the legal liability risks for its shipping activities with      Assuranceforeningen SKULD, Assuranceforeningen Gard Gjensidig and      Britannia Steam Ship Insurance Association Limited, all mutual protection      and indemnity associations. As a member of these mutual associations, the      Company is subject to calls payable to the associations based on the      Company’s claims record in addition to the claims records of all other      members of the associations. A contingent liability exists to the extent      that the claims records of the members of the associations in the      aggregate show significant deterioration, which result in additional calls      on the members.                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | As      of December 31, 2007, the Company had nine vessels that were sold by the      Company at various times during the period from November 1998 to December      31, 2003, and leased back on charters that range for periods of eight to      twelve and a half years with options on the lessors’ side to extend the      charters for periods that range up to five years. Eight of these charters      are accounted for as capital leases and one is accounted for as an      operating lease. The Company has purchase options at certain specified      dates and the lessor has options to put the vessels on the Company at the      end of the lease terms for all of these nine vessels. The total amount      that the Company would be required to pay under these put options with      respect to the operating lease is $9.5 million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | As      of December 31, 2007 Chevron charters three vessels on long-term bareboat      charters recorded as investments in finance leases.  Chevron      holds options to purchase each vessel for $1 on April 1, 2015 provided no      earlier optional termination of the bareboat charter has occurred. The      Company has not received notice of Chevron’s intent to terminate any of      these charters.                                                                                                                                                                                                                                                                                                                                                                                                                                |

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|   | As      of December 31, 2007, the Company had seven contracts for the construction      of four VLCC newbuildings scheduled for delivery in 2009 and 2010 and      three Suezmax newbuildings scheduled for delivery in 2008 and 2009. As of      December 31, 2007, the Company was committed to make further instalments      of $523.2 million. As of December 31, 2007, the Company also had a further      five contracts for Suezmax newbuildings scheduled for delivery in 2009 and      2010 with instalments totalling $357.0 million. Refund guarantees from the      shipyards have not yet been received on thesecontracts.                                                                                                                                                                                  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | As      of December 31, 2007, the Company had contracts for the conversion of the      single hull Suezmax vessels Front Traveller and Front Comor into heavy      lift vessels. As of December 31, 2007, the Company was committed to make      further instalments of $49.5 million for these two vessels. If the      converted vessels are not delivered to Dockwise within six months of the      agreed delivery date, Dockwise is entitled to cancel the purchase of the      vessels and receive a full refund of the sale proceeds. The sales proceeds      for these two vessels amounted to $200.0 million. The relevant dates are      July 31, 2008 for Front Traveller and November 30, 2008 for Front Comor.      The Company expects to deliver the converted vessels before the      cancellation date. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The      Company is a party, as plaintiff or defendant, to several lawsuits in      various jurisdictions for demurrage, damages, off-hire and other claims      and commercial disputes arising from the operation of its vessels, in the      ordinary course of business or in connection with its acquisition      activities.  The Company believes that the resolution of such      claims will not have a material adverse effect on the Company’s operations      or financial condition.                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 30.    | SUPPLEMENTAL      INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Non-cash      investing and financing activities include the  following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

| (in      thousands of $)                                         |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                             |   |   |    |   |   |   |    |   |   |
| Dividends      in kind:                                          |   |   |    |   |   |   |    |   |   |
| Spin-off      of Ship Finance                                    |   |   | 162,222 |   |   |   | 27,841  |   |   |   | 211,881 |   |
|                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Purchase      of marketable securities:                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Forward      contract                                            |   |   | -       |   |   |   | -       |   |   |   | 70,850 |   |
|                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Vessels:                                                         |   |   |    |   |   |   |    |   |   |   |   |   |
| Reclassification      of vessel under conversion to newbuildings |   |   | -       |   |   |   | (55,317 | )      |   |   | - |   |
| Vessel      addition on termination of capital lease             |   |   | -       |   |   |   | 13,502  |   |   |   | - |   |
| Additions      to vessels purchased from related party           |   |   | -       |   |   |   | -       |   |   |   | 85,363 |   |

| Equity      contribution from related party |   |   | - |   |   |   | - |   |   |   | (85,363 | )  |
|---------------------------------------------|--------|--------|---|--------|--------|--------|---|--------|--------|--------|---------|---------|

| 31.    | DISCONTINUED      OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | In      2005, the Company’s last remaining dry bulk vessel was sold and in 2007,      due to the deconsolidation of Ship Finance in March 2007, the Company no      longer reports results of Ship Finance’s containerships or jack up      rigs.                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      operations that have been disposed of have been recorded as discontinued      operations in accordance with the requirements of FAS 144 Accounting for the Impairment      or Disposal of Long-Lived Assets (“FAS 144”) as the operations and      cash flows of the operations have been eliminated from the ongoing      operations of the Company. The Company will not have any significant      continuing involvement in these dry bulk, containership or jack-up rig      operations in the future. |

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|   |                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------|
|   | The      following table presents the information required by FAS 144 in respect of      discontinued operations: |

| (in      thousands of $)                          |   | 2007   |    |   | 2006   |   |   | 2005   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Carrying      amount of assets disposed of        |   |   | 524,961 |   |   |   | -      |   |   |   | 12,875 |   |
| Carrying      amount of debt or lease retired     |   |   | 317,543 |   |   |   | -      |   |   |   | 11,246 |   |
|                                              |   |   |    |   |   |   |   |   |   |   |   |   |
| Amounts      recorded in discontinued operations: |   |   |    |   |   |   |   |   |   |   |   |   |
| Operating      revenues                           |   |   | 11,465  |   |   |   | 25,494 |   |   |   | 9,865 |   |
| Net      income                                   |   |   | 5,442   |   |   |   | 13,514 |   |   |   | 14,096 |   |
| Gain      on disposal                             |   |   | -       |   |   |   |   |   |   |   | 5,533 |   |

|   | As      of December 31, 2004, the Company held      23,918,832 Golden Ocean shares representing 10.6% of the shares      outstanding. These were reported under Marketable Securities and in      February 2005, the Company sold these shares for a net gain of $12.8      million, of which $11.8 million was classified as discontinued operations      representing the difference between the cost of the shares sold and the      fair value of the shares at the date of the spin off of Golden      Ocean.                                                       |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      2005 the Company recognised an expense in discontinued operations of $10.2      million in connection with its guarantee of profit sharing payments for      the vessel Channel Alliance.  The Company’s guarantee was issued      as part of the spin off of Golden Ocean in 2004.                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.    | POOL      REVENUES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Voyage      charter revenues include pool revenues. Certain pools are responsible for      paying voyage expenses and distribute net pool revenues to the      participants while other pools require the participants to pay and account      for voyage expenses, and distribute gross pool revenues to the      participants such that the participants’ resulting net pool revenues are      equal to net pool revenues calculated according to the agreed formula. An      analysis of the Company’s pool revenues included within voyage revenues is      as follows: |

|                                        |   | 2007   |   |   | 2006   |   |    | 2005   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Pool      earnings allocated on gross basis |   |   | 34,369 |   |   |   | 131,099 |   |   |   | 128,726 |   |
| Pool      earnings allocated on net basis   |   |   | -      |   |   |   | -       |   |   |   | 25,015 |   |
| Total      pool earnings                    |   |   | 34,369 |   |   |   | 131,099 |   |   |   | 153,741 |   |

| 33.    | GAIN      ON ISSUANCE OF SHARES BY ASSOCIATE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      Company had a 24.49% investment in IMAREX. IMAREX is an authorised      marketplace for the trading of freight derivatives in the global oil and      dry cargo shipping markets and was established in early 2000. On March 31,      2005, IMAREX announced that it had successfully concluded a share issue      prior to its listing on the Oslo Stock Exchange. A total of 432,098 shares      were sold for a price of NOK 81 per share (par value NOK 1) raising a      total of NOK 35 million. The Company did not participate in this share      issue and as a result, its holding changed from 26.56% to 24.84%. On July      14, 2005, IMAREX issued 98,750 shares pursuant to their employee share      option scheme and as a result, in 2005, the Company’s holding changed to      24.49%. A gain of $1.1 million was recorded in the statement of operations      in 2005 as a result of these share issues by IMAREX. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | In      February 2007, the Company’s wholly owned subsidiary Sea Production      completed a private placement for 90.0 million shares at a price of $2 per      share, raising a total of $180.0 million. The Company subscribed for 25.5      million shares which represented a 28.3% investment. A gain of $39.8      million was recorded in the statement of operations as a result of the      issue of shares by Sea Production.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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|   | In      May 2007, Dockwise, which the Company accounted for under the equity      method, completed a private placement for 39.8 million shares at a price      of NOK 30 per share raising a total of NOK 1,194.0 million. The Company      subscribed for five million of these shares and as the subscription was      not sufficient to maintain the Company’s proportionate interest, the      Company’s shareholding was reduced from 33.3% to 17.1%. A gain of $43.8      million was recorded in the consolidated statement of operations as a      result. The Company subsequently accounted for its 17.1% investment as      marketable securities. In September 2007, Dockwise issued a further 0.5      million shares. The Company did not participate in this offering and its      shareholding was further reduced to 16.6%.                                                                                                                                                                                                                                                                                                                                               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 34.    | SUBSEQUENT      EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      January 2008, the Company’s lease with Ship Finance for the Front Maple      was terminated due to the sale of the vessel by Ship Finance. A      termination fee of $16.7 million was received from Ship      Finance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      January 2008, Golden President Shipping Corporation, a wholly owned      subsidiary of Golden Ocean, won a court case against Bocimar N.V.      regarding disputed profit share due on a time charter and was awarded      $14.7 million plus interest. Bocimar N.V. have subsequently appealed this      decision.The Company had previously guaranteed the profit share due to      Golden Ocean in connection with the spin off of Golden Ocean in 2004 and      Golden Ocean is due to repay the amount awarded to the Company when it is      received from Bocimar N.V.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      February 2008, the Company’s Board of Directors declared a cash dividend      of $2.00 per share which was paid on March 10, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      February 2008, the Company invested $20 million in Navig8 Limited      (“Navig8”) which represents a 15.8% investment in  Navig8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      February 2008, the Company announced the appointment of Ms. Katherine      Fredriksen as a director of the Company to fill a vacancy created by the      resignation of Mr. Tor Olav Troim.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      February 2008, as part of the Company’s planned spin-off of its investment      in its Bermuda subsidiary Independent Tankers Corporation Limited (“ITCL”)      to the Company’s shareholders, the Company’s Board of Directors declared a      special dividend-in-kind of 20% of the Company’s investment in ITCL with      the distribution date being March 6, 2008. Eligible shareholders received      one share in ITCL for every five shares held in the Company. ITCL was      registered on the over-the-counter market in Oslo (“Oslo OTC”) on March 7,      2008. Certain of the Company’s U.S. shareholders were excluded from the      distribution with the estimated allotment of shares to these excluded      shareholders being sold by the Company on their behalf over the first five      days’ trading on the Oslo OTC market. The average share price determined      as a result of these sales was NOK 8.78, equivalent to $1.72 per ITCL      share. Accordingly, shareholders who were excluded from the distribution      received a cash payment in lieu of shares of $0.34 per Frontline      share. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      February 2008, the Company’s Board of Directors approved a grant of      760,000 share options to the Board of Directors, senior management and      other employees in the Company under the terms of the Company’s existing      share option scheme. The strike price for the options is NOK 243 per share      and the options will vest over a period of three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      March 2008, the Company entered into a forward contract for 1,366,600      shares in Overseas Shipholding Group, Inc (“OSG”) which represents 4.4% of      the total outstanding shares in OSG. The Company also announced that its      existing holding of shares in OSG together with shares held by companies      indirectly controlled by Mr. John Fredriksen corresponded to a 5.2%      ownership of OSG resulting in a total combined ownership of      9.6%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In      April 2008, the Company entered into a contract for four VLCC newbuildings      for an aggregate cost of $540 million for delivery between June and      December 2011. The Company has also secured options for a further two      similar newbuildings at a fixedprice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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