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                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                            FORM 20-F

(Mark One)
[  ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
             OF THE SECURITIES EXCHANGE ACT OF 1934

                               OR
[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended  DECEMBER 31, 1999

                               OR
[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from

Commission file number 0-22704

                         FRONTLINE LTD.
----------------------------------------------------------------
     (Exact name of Registrant as specified in its charter)

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                         FRONTLINE LTD.
----------------------------------------------------------------
         (Translation of Registrant's name into English)

                             BERMUDA
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         (Jurisdiction of incorporation or organisation)

    Mercury House, 101 Front Street, Hamilton, HM 12, Bermuda
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            (Address of principal executive offices)

Securities registered or to be registered pursuant to section
12(b) of the Act.

                                      NAME OF EACH EXCHANGE
         TITLE OF EACH CLASS          ON WHICH REGISTERED

              None

Securities registered or to be registered pursuant to section
12(g) of the Act.



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          American Depositary Shares each representing
               one Ordinary Share, $2.50 Par Value
----------------------------------------------------------------
                        (Title of class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.

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

Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period
covered by the annual report.

    60,961,860 Ordinary Shares, $2.50 Par Value of which 522,656
    Ordinary Shares are held in the form of 522,656 American
    Depositary Shares

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

         Yes X                        No
            ---

Indicate by check mark which financial statement item the
registrant has elected to follow.

         Item 17                      Item 18    X
                 ------                        ------


















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                             PART I

ITEM 1. DESCRIPTION OF BUSINESS.

THE COMPANY

Frontline Ltd. (the "Company" or "Frontline") is a Bermuda based
shipping company engaged primarily in the ownership and operation
of oil tankers. The Company operates vessels 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 through
subsidiaries and partnerships located in Bermuda, Liberia,
Norway, Panama, Singapore and Sweden. Since 1996, Frontline has
emerged as a leading tanker company within the VLCC and Suezmax
sectors of the market.

The Company has its origin in Frontline AB, which was founded in
1985, and which was listed on the Stockholm Stock Exchange from
1989 to 1997. In May 1997, a decision was made to redomicile
Frontline AB from Sweden to Bermuda and to list its shares on the
Oslo Stock Exchange. The change of domicile was executed through
a share for share exchange offer from the then newly formed
Frontline Ltd. in Bermuda.

In September 1997 Frontline initiated an amalgamation with London
& Overseas Freighters Limited ("LOF"). This process was completed
in May 1998. In the business combination (discussed in detail
below), which left LOF as the surviving company, Frontline's
shareholders exchanged Frontline shares for LOF shares and LOF
was subsequently renamed Frontline Ltd. As a result of this
transaction, Frontline became listed on the London Stock Exchange
and on the NASDAQ National Market in addition to its listing on
the Oslo Stock Exchange.

The Company is a world leader in the international seaborne
transportation of crude oil. The Company's tanker fleet, which is
one of the largest and most modern in the world, consists of 16
owned or controlled VLCCs and 29 owned or controlled Suezmax
tankers, of which 8 are Suezmax OBOs. In 1998 and 1999, the
Company took delivery of a total of three Suezmax tankers and
five VLCC newbuildings. In 2000 to date, the Company has taken
delivery of three additional Suezmax newbuildings. In addition,
the Company has acquired one VLCC newbuilding, two second-hand
VLCCs and has acquired a forty per cent interest in a second-hand
VLCC. The Company also has a minority interest in two older
Suezmax tankers built in 1978 and 1979, and charters in two
modern VLCCs and two modern Suezmax tankers. The two VLCC
newbuildings acquired by the Company in 1998 were subsequently
sold and leased back on bareboat charters for periods of eight
years with the option on the buyer's side to extend the charter


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for 2+1+1 years. One Suezmax newbuilding acquired by the Company
in 1998 was subsequently sold and leased back on a bareboat
charter for a period of eight years with the option on the
buyer's side to extend the charter for 2+1+1 years. Through the
acquisition of ICB Shipping AB (publ) ("ICB") in 1999 (See
"Business Acquisitions and Combinations") the Company acquired
two VLCCs and six Suezmax tankers, plus one chartered-in Suezmax
tanker. The fleet operated by the Company has a total tonnage of
approximately 8.5  million dwt, and its vessels have an average
age of 6 years compared with an estimated industry average of
over 12 years. The Company believes that its vessels comply with
the most stringent of generally applicable environmental
regulations for tankers.

The Company is committed to providing quality transportation
services to all of its customers and to developing and
maintaining long term relationships with the major charterers of
tankers. Increasing global environmental concerns have created a
demand in the petroleum products/crude oil seaborne
transportation industry for vessels that are able to conform to
the stringent environmental standards currently being imposed
throughout the world. The Company's fleet of modern single hull
VLCCs may discharge crude oil at the Louisiana Offshore Oil Port
("LOOP") until the year 2015, and its modern single hull Suezmax
tankers may call at US ports until the year 2010 under the phase-
in schedule for double hull tankers presently prescribed under
the Oil Pollution Act of 1990 ("OPA 90"). See "Regulation".

The shipping industry is highly cyclical, experiencing volatility
in profitability, vessel values and charter rates. In particular,
freight and charterhire rates are strongly influenced by the
supply of vessels and the demand for oil transportation. Freight
rates weakened in the second half of 1998 and further
deteriorated in 1999 as a result of OPEC oil production cuts to
support oil prices, relatively high world oil inventories,
weakness in oil demand due to the continued Southeast Asian
economic crisis as well as the onset of a recession in Latin
America and the relatively large tanker newbuilding delivery
schedule. Towards the end of 1999, Suezmax rates started to
improve followed by improving VLCC rates at the end of the first
quarter of 2000. The improving market conditions were supported
by a reduction of transportation capacity through the scrapping
of elderly tonnage in 1999. More stringent practises among
charterers in selection of tonnage following the sinking of the
23 year old tanker, Erika, off Brittany in December 1999, also
contributed to the reduction of tonnage supply as older vessels
were excluded from certain trades. Following OPEC's decision to
increase its quota for oil production in March 2000, the increase
in demand for tonnage resulted in further improvement of the
supply/demand balance for tankers and thereby rates in the market
strengthened further.


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Currently, in June 2000, the tanker industry is experiencing
booming charter rates, at levels higher than have been achieved
for several years. VLCCs are currently chartered at above $40,000
per day and Suezmaxes at approximately $30,000 per day.

The Company's plan is to create one of the world's largest
publicly traded shipping companies, with a modern, high quality
VLCC and Suezmax fleet. The Company's business strategy is
primarily based upon the following principles: (i) emphasising
operational safety and quality maintenance for all of its
vessels; (ii) complying with all current and proposed
environmental regulations; (iii) outsourcing technical operations
and crewing; (iv) controlling operational costs of vessels; (v)
owning one of the most modern and homogeneous fleets of tankers
in the world; (vi) achieving high utilisation of its vessels;
(vii) achieving competitive financing arrangements and (viii)
developing and maintaining relationships with major oil companies
and industrial charterers. After having delivered their cargo,
spot market vessels typically operate in ballast until being
rechartered. It is the time element associated with these ballast
legs which the Company seeks to minimise by efficiently
chartering its OBO carriers and tankers. The Company seeks to
maximise earnings in employing vessels in the spot market, under
time charters or under contracts of affreightment.

In December 1999, the Company, together with A.P. Moller, Euronav
Luxembourg SA, Osprey Maritime Ltd., Overseas Shipholding Group,
Inc and Reederei "Nord" Klaus E. Oldendorff agreed to form
Tankers International LLC ("Tankers") to pool the commercial
operation of the participating companies' modern VLCC fleets (the
"Tankers Pool"). Tankers began operations on February 1, 2000,
with an initial fleet of 39 modern VLCCs (of which the Company
contributed twelve vessels). Tankers' fleet currently constitutes
10 per cent of the world VLCC fleet. By 2002, as the participants
take delivery of newbuildings and vessels are redelivered from
time charters, Tankers' fleet is expected to exceed 50 vessels.
Tankers mainly employs ships in the spot market, although it also
from time to time enters into Contracts of Affreightment ("COAs")
and time charters. Revenues to each shipowner who participates in
Tankers are calculated on the basis of the pool's total earnings
and the tonnage committed into Tankers by the shipowner.

By consolidating the commercial operation of its substantial VLCC
fleet into a unified transportation system, Tankers offers its
customers "one stop shopping" for high quality modern VLCC
tonnage. The size of the fleet enables Tankers to become the
logistics partner of major customers, providing new and improved
tools to manage shipping programs, inventories and risk. The
Company believes that Tankers will enhance the financial
performance of pool vessels through higher utilisation and other
operating efficiencies. Tankers also seeks to reduce vessel


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operating costs by facilitating joint purchasing of goods and
services by pool participants.

In 1998, in order to increase the Company's market share in the
Suezmax trades and increase the trading flexibility, the Company
and OMI Corporation, a major international shipping company,
combined Suezmax tanker fleets for commercial purposes and
created Alliance Chartering LLC ("Alliance"). Alliance currently
markets 40 Suezmax tankers, of which the majority are employed in
the Atlantic market, comprising approximately 30 per cent of the
total Suezmaxes trading in the spot market in the Atlantic basin.
Alliance's control of the largest modern fleet of Suezmaxes has
enabled it to strengthen relationships and obtain contracts with
a number of customers. These contracts may allow Alliance the
opportunity to increase its Suezmax fleet utilisation through
backhauls when cargo is available (that is, transporting cargo on
the return trip when a ship would normally be empty) which would
improve vessel earnings.

Alliance mainly employs ships in the spot market, although it
also from time to time enters into COAs and time charters.
Revenues to each shipowner who participates in Alliance is based
on the actual earnings from the ships contributed into Alliance
by the shipowner. Two of the Suezmax tankers contributed by
Frontline into Alliance, "Lillo" and "Granite", are chartered on
time charters. Part of the employment for Frontline's Suezmax
OBOs is secured by a COA with a steel mill in Saudi Arabia for
transport of iron ore from Norway. The contract is for three-year
periods, subject to renewal, and currently secures employment for
1.5 ship per year. Two part-owned Suezmax tankers which are
employed outside of Alliance, "Polytrader" and "Polytraveller",
are chartered to Navion ASA until April 2001 and January 2003,
respectively.

The Company is registered in Bermuda (No. EC-17460). Its
registered and principal executive offices are located at Mercury
House, 101 Front Street, Hamilton, HM 12, Bermuda, and its
telephone number is +1 (441) 295-6935.

BUSINESS ACQUISITIONS AND COMBINATIONS

AMALGAMATION WITH LONDON & OVERSEAS FREIGHTERS LIMITED
On September 22, 1997, LOF and Frontline announced that they had
entered into an Agreement and Plan of Amalgamation (the
"Amalgamation Agreement"), providing for a business combination
in a three-step transaction. On September 29, 1997, pursuant to
the Amalgamation Agreement, Frontline commenced a cash tender
offer (the "Offer") for at least 50.1 per cent and up to 90 per
cent of the outstanding LOF Ordinary Shares and ADSs for a price
of $1.591 (restated to $15.91) per Ordinary Share ($15.91 per
ADS). The Offer expired on October 28, 1997, and effective


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November 1, 1997 Frontline acquired approximately 79.74 per cent
of the outstanding LOF Ordinary Shares.

In the second step, Frontline amalgamated (the "Amalgamation")
with Dolphin Limited, a Bermuda subsidiary of LOF. Each ordinary
share of Frontline was cancelled in consideration for which the
stockholders of Frontline received (i) 3.2635 (restated to
0.32635) Ordinary Shares of LOF and (ii) 0.1902 (restated to
0.01902) of a newly issued warrant ("Frontline Warrants") to
purchase one LOF Ordinary Share. In the third step of the
combination, in order to combine the assets and liabilities, LOF
purchased the assets and liabilities of Frontline which were
vested in the amalgamated company at fair market value in
exchange for a promissory note. LOF is the legally surviving
entity in this business combination and has been renamed
Frontline Ltd. with effect from May 11, 1998. Frontline is
treated as the accounting acquirer and the transaction treated as
a reverse acquisition. The share capital of the Company has been
restated accordingly to reflect the transaction. For periods on
or after May 11, 1998, the term "Company" refers to Frontline
Ltd. (formerly London & Overseas Freighters Limited).

ACQUISITION OF ICB
On September 1, 1997, Frontline announced its intention to submit
an offer to acquire all of the shares of ICB . The final form of
the offer was an offer to acquire all of the shares of ICB (the
"ICB Shares") in exchange for SEK 130 in cash for each of the A-
shares and SEK 115 in cash for each of the B-shares. The total
acquisition price was estimated to be $423 million, financed
primarily by a US $300 million loan facility ("ICB facility")
with Chase Manhattan Bank ("Chase"). Through the tender offer, by
October 1997 Frontline acquired 51.7 per cent of the outstanding
shares of ICB at a purchase price of approximately $215 million.
However, the shares purchased, 14,428,078 Class B shares and
148,663 Class A shares, provided Frontline with only 31.4 per
cent of the ICB voting rights. On January 8, 1998, Frontline
withdrew its bid for the remaining outstanding shares of ICB.
During 1998, Frontline made further purchases of ICB Shares in
the market and at December 31, 1998 had 34.2 per cent of the
voting power.

On September 23, 1999, pursuant to an agreement (the "ICB
Agreement"), Frontline acquired ICB Shares previously owned by
the so-called "A group" consortium including those controlled by
board members of ICB and ICB shares controlled by the
Angelicoussis family. In connection with the ICB Agreement, four
of the VLCCs owned by ICB were sold to companies controlled by
the Angelicoussis family. As a result of the acquisitions,
Frontline increased its shareholding in ICB to approximately 90
per cent of the capital and 93 per cent of the voting rights. In
October 1999, a new Board of Directors was appointed in ICB and


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is consequently controlled by Frontline. In December 1999,
Frontline commenced a compulsory acquisition for the remaining
shares in ICB and ICB was delisted from the Stockholm Stock
Exchange. The operations of ICB have been incorporated into those
of the Company and the eight vessels acquired as a result of the
transaction have been transferred to the Company's management
structure.

In the two year period prior to September 1999, Frontline was
unable to control, or exercise significant influence over, ICB.
Accordingly, the Company previously accounted for its investment
in ICB as an available-for-sale security in accordance with SFAS
115. As a result of Frontline acquiring control over ICB, the
Company's financial statements have been restated. For the years
ended December 31, 1997 and 1998, the investment in ICB is
accounted for in accordance with the equity method. For the year
ended December 31, 1999, ICB has been consolidated with effect
from January 1, 1999.

Through the acquisition of ICB, Frontline, through an indirect
subsidiary, has taken over responsibility for the management
function for Knightsbridge Tankers Limited (Knightsbridge"), a
company whose shares are listed on the Nasdaq National Market
under the symbol "VLCCF". Knightsbridge owns five VLCCs (built
1995-96) which are chartered to Shell International Petroleum
Company Limited. Knightsbridge reports to the US Securities and
Exchange Commission pursuant to Section 13 of the Securities
Exchange Act of 1934. Frontline also has a 2.0 per cent ownership
interest in Knightsbridge as of June 14, 2000.

INDEPENDENT TANKERS CORPORATION TRANSACTION
In May 1998, the Company acquired control of three shipowning
and/or leasing structures which are organised in a non-recourse
holding company, Independent Tankers Corporation ("ITC"). The
Company acquired ITC for $9.5 million. The Company's investment
in ITC was subsequently sold to Hemen Holding Ltd. ("Hemen"), the
principal shareholder in the Company, for $9.5 million with
effect from July 1, 1998. The acquisition and sale of ITC are
treated as occurring on the same date for accounting purposes as
a result of the common control relationship between the Company
and Hemen. The results of ITC are therefore not consolidated in
the Company's financial statements for any period in 1999 and
1998. The Company is the manager of the underlying operating
companies and has received a five year fair value call option
from Hemen to buy back ITC.








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SIGNIFICANT RECENT DEVELOPMENTS

In February, March and April 2000, Frontline acquired Golden
Ocean Group Limited ("Golden Ocean") US$ 291 million Senior Notes
due in August 2001 and at June 13, 2000 held Senior Notes with a
face amount of $76.8 million. Golden Ocean is a shipping group
which holds interest in 14 VLCCs and 10 bulk carriers. Most of
the delivered tonnage is presently employed on medium to long
term charters. Golden Ocean filed for bankruptcy protection under
Chapter 11 of the U.S. Bankruptcy Code, on January 14, 2000, and
through this protection received  an exclusive period of up to
120 days to file a Plan of Reorganisation. As one of Golden
Ocean's largest creditors, Frontline announced that it would seek
to be actively involved in the reorganisation process.

On May 25, 2000, the Company and Golden Ocean signed a term sheet
(the "Frontline/Golden Ocean Term Sheet") relating to a Proposed
Joint Plan of Reorganisation (the "Joint Plan") for Golden Ocean.
Upon the effective date of the Golden Ocean Plan, Golden Ocean
would become a wholly-owned subsidiary of Frontline. The Official
Committee of Unsecured Creditors of Golden Ocean announced that
it would fully support and would be a co-proponent of the Joint
Plan. The Frontline/Golden Ocean Term Sheet provided for a
payment to all unsecured creditors in Golden Ocean including the
holders of Golden Ocean Senior Notes. Pursuant to the
Frontline/Golden Ocean Term Sheet, Frontline committed to pay up
to $33.0 in cash, or to issue up to 4.1 million shares and 1.9
million warrants in Frontline valued to $48.4 million to take
over all unsecured debt and all upstream guarantees. These
amounts do not include a takeout of the $77.75 million Golden
Ocean debt currently controlled by Frontline. The old share
capital would, according to the Frontline/Golden Ocean Term
Sheet, be cancelled while new share capital will be injected by
Frontline. In addition, the Frontline/Golden Ocean Term Sheet
provided for the release of upstream guarantees in favour of the
holders of Golden Ocean Senior Notes. During the negotiations
over the Frontline/Golden Ocean Term Sheet, another bidder,
Bentley Investments S.A. ("Bentley") took control of Golden
Ocean's Board of Directors and caused Golden Ocean to withdraw
its support of, and object to, the approval of the
Frontline/Golden Ocean Term Sheet.

On June 6, 2000, the Bankruptcy Court in the Golden Ocean
bankruptcy case terminated Golden Ocean's exclusive period to
file a plan of reorganisation, which permits any party in
interest to propose a plan. As of the date of this report, the
Court has scheduled the filing of all plans and related
disclosure statements for no later than the close of business on
July 7, 2000.  The Court has set July 28, 2000 for a hearing on
the adequacy of each disclosure statement filed by a plan
proponent.


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Also at the June 6, 2000, hearing, with Frontline's consent,
Bentley replaced Frontline as debtor-in-possession lender to
Golden Ocean, by paying Frontline the outstanding balance of the
loan, plus interest, fees and expenses, with Frontline reserving
all rights to final payment of its expenses, premiums owing to
it.

In view of the termination of exclusivity and Golden Ocean's
failure to support the Joint Plan, Frontline reserves the right
to submit a plan on different terms from those contained in the
Frontline/Golden Ocean Term Sheet.

OPERATIONS

Similar to structures commonly used by other shipping companies,
the Company's vessels are all owned by, or chartered to, separate
subsidiaries or associated companies. Frontline Management AS
("Frontline Management"), a wholly-owned subsidiary of the
Company, supports the Company in the implementation of its
decisions. Frontline Management is responsible for the commercial
management of the Company's shipowning subsidiaries, including
chartering and insurance. Each vessel owned by the Company is
registered under Bahamas, Liberian, Singaporean, Norwegian or
Panamanian flag.

Frontline has a strategy of extensive outsourcing. Ship
management, crewing and accounting services are provided by a
number of independent and competing suppliers.

--  Frontline's vessels are managed by independent ship
    management companies. Pursuant to management agreements, each
    of the independent ship management companies provides
    operations, ship maintenance, crewing, technical support,
    shipyard supervision and related services to Frontline. A
    central part of Frontline's strategy is to benchmark
    operational performance and cost level amongst the Company's
    ship managers.
--  Independent ship managers provide crewing for Frontline's
    vessels. Currently, most vessels are crewed with full Russian
    crews, while others have full Indian or full Filipino crews,
    or combinations of these nationalities.
--  The accounting management services for each of the shipowning
    subsidiaries of Frontline are provided by the ship managers.

FURTHER EXPANSION OF FLEET

The Company believes that fleet size in the industrial shipping
sector is increasingly important in negotiating terms with major
clients and charterers. The Company believes that a large, high-
quality VLCC and Suezmax fleet will enhance its ability to obtain



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competitive terms from suppliers and shipbuilders and to produce
cost savings in chartering and operations.

Based on these considerations, the Company intends to look for
further opportunities to expand its fleet and acquire additional
VLCCs and Suezmax tankers. Frontline believes that VLCC and
Suezmax freight rates and market values will support such
expansion. Due to the ageing profile of the existing world fleet,
enforcement of environmental regulations and customer demand, the
Company believes that there will be increased demand for modern
VLCCs and Suezmax tankers needed to carry the world oil trade
during the early 2000s. As a result, opportunities exist for
selective investment in VLCC and Suezmax tankers built in the
1990s that are in good operating condition, with prospects to
yield operating profits and capital gains over the next several
years. Although VLCC freight rates and market values are
volatile, the Company believes that investment in such VLCC and
Suezmax tankers in today's market carries a limited amount of
downside risk while offering the prospect of significant upside
potential.

As part of its vessel acquisition policy, the Company conducts a
physical inspection of each tanker and examines its construction,
prior ownership, operating history and classification records.
Among the second-hand VLCC and Suezmax tankers which the Company
may purchase are tankers subject to existing bareboat charters or
leases with major oil companies such as in the case of ITC's
subsidiaries. The Company may also purchase options to acquire
such tankers at the expiration of such bareboat charters or
leases. The Company cannot guarantee that its policy will be
successful.

INSPECTION BY A CLASSIFICATION SOCIETY

Every commercial vessel's hull and machinery is "classed" by a
classification society authorised by its country of registry. The
classification society certifies that the vessel has been built
and maintained in accordance with the rules of such
classification society and complies with applicable rules and
regulations of the country of registry of the vessel and the
international conventions to which that country is a member. The
Company's vessels have all been certified as "in class."

Each vessel is inspected by a surveyor of the classification
society every year, every two and a half years and every four to
five years. Should any defects be found, the classification
surveyor will issue a "recommendation" for appropriate repairs
which have to be made by the shipowner within the time limit
prescribed.




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CUSTOMERS

Customers of the Company include major oil companies, petroleum
products traders, government agencies and various other entities.
During the years ended December 31, 1999 and 1998, no customer
accounted for 10 per cent or more of consolidated freight
revenues. In the year ended December 31, 1997, Valero Refining
and Marketing accounted for 10 per cent or more of consolidated
freight revenues.

COMPETITION

The market for international seaborne crude oil transportation
services is highly fragmented and competitive. Seaborne crude oil
transportation services generally are provided by two main types
of operators: major oil company captive fleets (both private and
state-owned) and independent shipowner fleets. In addition,
several owners and operators pool their vessels together on an
ongoing basis, and such pools are available to customers to the
same extent as independently owned and operated fleets. Many
major oil companies and other oil trading companies, the primary
charterers of the vessels owned or controlled by the Company,
also operate their own vessels and use such vessels not only to
transport their own crude oil but also to transport crude oil for
third party charterers in direct competition with independent
owners and operators in the tanker charter market. Competition
for charters is intense and is based upon price, location, size,
age, condition and acceptability of the vessel and its manager.
Competition is also affected by the availability of other size
vessels to compete in the trades in which the Company engages.

EMPLOYEES

As of June 13, 2000, the Company and its subsidiaries employ 28
people in their respective offices in Bermuda, London, Oslo and
Korea. The Company contracts with the ship managers to manage and
operate its vessels. See "Operations" above.

RISK OF LOSS AND INSURANCE

The business of the Company is affected by a number of risks,
including mechanical failure of the vessels, collisions, property
loss to the vessels, cargo loss or damage and business
interruption due to political circumstances in foreign countries,
hostilities and labour strikes. In addition, the operation of any
ocean-going vessel is subject to the inherent possibility of
catastrophic marine disaster, including oil spills and other
environmental mishaps, and the liabilities arising from owning
and operating vessels in international trade.




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Frontline Management is responsible for arranging for the
insurance of the Company's vessels in line with standard industry
practice. In accordance with that practice, the Company maintains
marine hull and machinery and war risks insurance, which includes
the risk of actual or constructive total loss, and protection and
indemnity insurance with mutual assurance associations. The
Company from time to time carries insurance covering the loss of
hire resulting from marine casualties in respect of some of its
vessels. Currently, the amount of coverage for liability for
pollution, spillage and leakage available to the Company on
commercially reasonable terms through protection and indemnity
clubs and providers of excess coverage is $1 billion per vessel
per occurrence. Protection and indemnity clubs are mutual marine
indemnity associations formed by shipowners to provide protection
from large financial loss to one member by contribution towards
that loss by all members.

The Company believes that its current insurance coverage is
adequate to protect against the accident-related risks involved
in the conduct of its business and that it maintains appropriate
levels of environmental damage and pollution insurance coverage,
consistent with standard industry practice. However, there is no
assurance that all risks are adequately insured against, that any
particular claims will be paid or that the Company will be able
to procure adequate insurance coverage at commercially reasonable
rates in the future.

REGULATION

The business of the Company and the operation of its vessels are
materially affected by government regulation in the form of
international conventions, national, state and local laws and
regulations in force in the jurisdictions in which the vessels
operate, as well as in the country of their registration. Because
such conventions, laws and regulations are often revised, the
Company cannot predict the ultimate cost of complying with such
requirements or the impact of such requirements on the resale
price or useful life of its vessels. The Company is required by
various governmental and quasi-governmental agencies to obtain
certain permits, licenses and certificates with respect to its
operations. Subject to the discussion below and to the fact that
the kinds of permits, licenses and certificates required for the
operation of the vessels owned by the Company will depend upon a
number of factors, the Company believes that it has been and will
be able to obtain all permits, licenses and certificates material
to the conduct of its operations.

The Company believes that the heightened environmental and
quality concerns of insurance underwriters, regulators and
charterers will impose greater inspection and safety requirements
on all vessels in the tanker market and will accelerate the


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scrapping of older vessels throughout the industry. Increasing
environmental concerns have created a demand in the seaborne
refined petroleum products transportation industry for vessels
that are able to conform to the stricter environmental standards
currently being imposed throughout the world. All of the
Company's vessels built since 1990 comply with the requirements
of OPA 90 for trading in the United States and with the rules and
regulations of the International Maritime Organisation ("IMO").
In addition, the Company maintains operating standards for all of
its vessels that emphasise operational safety, quality
maintenance, continuous training of its crews and officers and
compliance with United States and international regulations.

On March 6, 1992, the IMO adopted regulations which set forth new
and upgraded requirements for pollution prevention for tankers.
These regulations apply to owners and operators of vessels, the
country under whose flag the Company's vessels are registered and
provide, in part, that (i) tankers between 25 and 30 years old
must be of double hull construction or of a mid-deck design with
double side construction, unless they have wing tanks or double
bottom spaces, not used for the carriage of oil, which cover at
least 30 per cent of the length of the cargo tank section of the
hull or are capable of hydrostatically balanced loading which
ensures at least the same level of protection against oil spills
in the event of collision or stranding, (ii) tankers 30 years or
older must be of double hull construction or mid-deck design with
double side construction, and (iii) all tankers will be subject
to enhanced inspections. Some classification societies, the
certificates of which evidence compliance with the IMO
regulations, may implement these enhanced inspection requirements
prior to the effective date of such regulations. Also, under the
IMO regulations, a tanker must be of double hull construction or
a mid-deck design with double-side construction or be of another
approved design ensuring the same level of protection against oil
pollution in the event that such tanker (i) is the subject of a
contract for a major conversion or original construction on or
after July 6, 1993, (ii) commences a major conversion or has its
keel laid on or after January 6, 1994, or (iii) completes a major
conversion or is a newbuilding delivered on or after July 6,
1996.

In addition, many countries have adopted the International
Convention on Civil Liability for Oil Pollution Damage 1969
("CLC"), as amended by a 1976 protocol, a 1984 protocol and a
1992 protocol. Under the CLC, a vessel's registered owner is
strictly liable for pollution damage caused in the territorial
waters of a contracting state by discharge of persistent oil,
subject to certain complete defenses. Liability is currently
limited to certain US dollar amounts based on the size of the
vessel. The limit of liability is tied to a unit of account which
varies according to a basket of currencies. At May 30, 2000, that


                               14



<PAGE>

limit was approximately $79.1 million if the country in which the
damage results is a party to the 1992 protocol, which raised the
maximum limit to that level. The right to limit liability is
forfeited where the spill is caused by the owner's actual fault
or privity and, under the 1992 protocol, where the spill is
caused by the owner's intentional or reckless conduct. In
jurisdictions where the CLC has not been adopted, various
legislative schemes or common law govern and liability is imposed
either on the basis of fault or in a manner similar to the CLC.

All of the Company's newbuildings delivered since 1995 are of
double hull construction and comply with the IMO regulations upon
their effective date. The Company cannot at the present time
evaluate the likelihood of whether compliance with the new
regulations regarding inspections of all vessels will adversely
affect the Company's operations, or the magnitude of any such
adverse effect, due to uncertainty of interpretation of the IMO
regulations.

OPA 90 established an extensive regulatory and liability regime
for the protection and cleanup of the environment from oil
spills. OPA 90 affects all owners and operators whose vessels
trade to the United States or its territories or possessions or
whose vessels operate in United States waters, which include the
United States territorial sea and the two hundred nautical mile
exclusive economic zone of the United States.

Under OPA 90, vessel owners, operators and demise charterers are
"responsible parties" and are jointly, severally and strictly
liable (unless the spill results solely from the act or omission
of a third party (subject to certain statutory qualifications the
effects of which have not been determined by any judicial
interpretation), an act of God or an act of war) for all oil
spill containment and clean-up costs and other damages arising
from oil spills pertaining to their vessels. These other damages
are defined broadly to include (i) natural resources damage and
the costs of assessment thereof, (ii)  real and personal property
damages, (iii) net loss of taxes, royalties, rents, fees and
other lost revenues, (iv) lost profits or impairment of earning
capacity due to property or natural resources damage, (v) net
cost of public services necessitated by a spill response, such as
protection from fire, safety or health hazards, and (vi) loss of
subsistence use of natural resources. OPA 90 limits the liability
of responsible parties to the greater of $1,200 per gross tonne
or $10 million per tanker (subject to possible adjustment for
inflation). These limits of strict liability would not apply if
the incident were proximately caused by violation of applicable
United States federal safety, construction or operating
regulations or by the responsible party's gross negligence or
wilful misconduct, or if the responsible party fails or refuses
to report the incident or to cooperate and assist in connection


                               15



<PAGE>

with oil removal activities. The Company currently insures and,
provided such insurance remains available at a commercially
reasonable cost, plans to insure each of its vessels with
pollution, spillage and leakage liability insurance in the amount
of $1 billion per vessel per occurrence. This is the amount
currently available to the Company in the insurance market on
commercially reasonable terms. The liability resulting from a
catastrophic spill could exceed the insurance coverage available,
in which event there could be a material adverse effect on the
Company. See "Risk of Loss and Insurance."  Additionally, under
OPA 90, the liability of responsible parties, United States or
foreign, with regard to oil pollution damage in the United States
is not pre-empted by any international convention.

Under OPA 90, with certain limited exceptions, all newly built or
converted tankers operating in United States waters must be built
with double hulls conforming to particular specifications.
Existing vessels which do not comply with the double hull
requirement must be phased out over a 20-year period (1995-2015)
based on size, age and place of off-loading, unless retrofitted
with double hulls.

Notwithstanding the phase-in period, OPA 90 currently permits
existing single hull tankers to operate until the year 2015 if
(i) their operations within United States waters are limited to
discharging at LOOP or off-loading by means of lightering
activities within authorised lightering zones more than 60 miles
off-shore and (ii) they are otherwise in compliance with
applicable laws and regulations.

OPA 90 expands the pre-existing financial responsibility
requirements for vessels operating in United States waters and
requires owners and operators of vessels to establish and
maintain with the US Coast Guard evidence of insurance or of
qualification as a self-insurer or other evidence of financial
responsibility sufficient to meet their potential strict
liability limit under OPA 90. The US Coast Guard has adopted
regulations which require evidence of financial responsibility
equal to the strict liability limit demonstrated by insurance,
surety bond, self-insurance or guaranty. Under OPA 90, an owner
or operator of more than one tanker is required only to
demonstrate evidence of financial responsibility for the tanker
having the greatest maximum strict liability limit under OPA 90.

The US Coast Guard's regulations concerning certificates of
financial responsibility provide, in accordance with OPA90, that
claimants may bring suit directly against an insurer or guarantor
that furnishes certificates of financial responsibility; and, in
the event that such insurer or guarantor is sued directly, it is
prohibited from asserting any defense that it may have had
against the responsible party and is limited to asserting those


                               16



<PAGE>

defenses available to the responsible party and the defense that
the incident was caused by the wilful misconduct of the
responsible party. The Company currently maintains evidence of
financial responsibility through Shoreline Mutual (Bermuda) Ltd.
and The Shipowners Insurance and Guaranty Company Ltd. (SIGCO),
commercial providers of such evidence.

Owners or operators of tankers operating in United States waters
must file vessel response plans with the US Coast Guard and their
tankers must operate in compliance with their US Coast Guard
approved plans. Such response plans must, among other things,
(i) identify and ensure, through contract or other approved
means, the availability of necessary private response resources
to respond to a "worst case" discharge, (ii) describe crew
training and drills, and (iii) identify a qualified individual
with full authority to implement removal actions.

OPA 90 specifically permits individual states to impose their own
liability regimes with regard to oil pollution incidents
occurring within their boundaries, and many states have enacted
legislation providing for unlimited liability for oil spills. In
some cases, states which have enacted such legislation have not
yet issued implementing regulations defining tanker owners'
responsibilities under these laws. The Company intends to comply
with all applicable state regulations in ports where the
Company's vessels call.

The European Community ("EC") is considering legislation that
will affect the operation of oil tankers. It is impossible to
predict what legislation, if any, may be promulgated by the EC or
any other country or authority.

The operation of the Company's vessels is also affected by the
International Ship Management Code ("ISM Code"), which as of July
1, 1998, requires shipowners and bareboat charterers to develop
an extensive "Safety Management System," which includes policy
statements, manuals, standard procedures and lines of
communication. Non-compliance with the ISM Code may subject the
shipowner or bareboat charterer to increased liability and may
lead to decreases in available insurance coverage for affected
vessels, denial of permission to enter ports or detention by port
authorities. Although compliance with the ISM Code is the
responsibility of a bareboat charterer where its vessels are
subject to such charters, the Company may become primarily
responsible for compliance with the ISM Code if a bareboat
charterer were to default in its obligations under its charters.
All of the Company's vessels and their operators have received
ISM certification.





                               17



<PAGE>

THE COMPANY'S VESSELS

The Company operates a substantially modern fleet of 45 vessels
consisting of eight Suezmax OBO carriers, sixteen VLCCs and
twenty one Suezmax tankers. The Company owns 38 of such vessels
through indirect wholly-owned subsidiaries, one such vessel
through a investment in a joint venture and two of such vessels
through limited partnerships. The following table sets forth the
fleet operated by the Company as of June 14, 2000:












































                               18



<PAGE>

OWNED TONNAGE
                     APPROXIMATE                              TYPE OF
VESSEL             BUILT     DWT.       CONSTRUCTION   FLAG   EMPLOYMENT

VLCCs
Front Sabang*        1990     285,000    Single-hull    SG     Tankers Pool
Front Vanadis*       1990     285,000    Single-hull    SG     Tankers Pool
Front Highness       1991     284,000    Single-hull    SG     Tankers Pool
Front Lady           1991     284,000    Single-hull    SG     Tankers Pool
Front Lord           1991     284,000    Single-hull    SG     Tankers Pool
Front Duke           1992     284,000    Single-hull    SG     Tankers Pool
Front Duchess        1993     284,000    Single-hull    SG     Tankers Pool
Front Tobago (40%)   1993     261,000    Single-hull    LR     Tankers Pool
Front Tartar         1993     300,000    Single-hull    LR     Tankers Pool
Front Tarim          1993     307,000    Single-hull    LR     Tankers Pool
Front Chief          1999     311,000    Double-hull    BA     Tankers Pool
Front Commander      1999     311,000    Double-hull    BA     Tankers Pool
Front Crown          1999     311,000    Double-hull    BA     Tankers Pool
Front Tina           2000     308,000    Double-hull    LR     Tankers Pool

SUEZMAX OBO CARRIERS
Front Breaker        1991     169,000    Double-hull    NIS    Spot market
Front Climber        1991     169,000    Double-hull    SG     Spot market
Front Driver         1991     169,000    Double-hull    NIS    Spot market
Front Guider         1991     169,000    Double-hull    SG     Spot market
Front Leader         1991     169,000    Double-hull    SG     Spot market
Front Rider          1992     169,000    Double-hull    SG     Spot market
Front Striver        1992     169,000    Double-hull    SG     Spot market
Front Viewer         1992     169,000    Double-hull    SG     Spot market

SUEZMAXES
Polytrader (40%)     1978     126,000    Single-hull    NO     Time charter
Polytraveller (35%)  1979     126,000    Single-hull    NO     Time charter
Lillo                1991     147,000    Single-hull    LR     Time charter
Front Birch*         1991     152,000    Double-side    NIS    Spot market
Front Maple*         1991     152,000    Double-side    NIS    Spot market
Front Granite*       1991     142,000    Single-hull    BA     Time Charter
Front Emperor        1992     147,000    Single-hull    SG     Spot market
Front Sunda*         1992     142,000    Single-hull    NIS    Spot market
Front Spirit         1993     147,000    Single-hull    NIS    Spot market
Front Comor*         1993     142,000    Single-hull    NIS    Spot market
Front Pride          1993     150,000    Double-hull    LR     Spot market
Front Glory          1995     150,000    Double-hull    NIS    Spot market
Front Splendour      1995     150,000    Double-hull    NIS    Spot market
Mindanao*            1998     158,000    Double-hull    SG     Spot market
Front Fighter        1998     153,000    Double-hull    NIS    Spot market
Front Hunter         1998     153,000    Double-hull    NIS    Spot market
Front Archer         2000     153,000    Double-hull    NIS    Spot market
Front Sun            2000     153,000    Double-hull    BA     Spot market
Front Sky            2000     153,000    Double-hull    BA     Spot market



                               19



<PAGE>

CHARTERED IN TONNAGE
                     APPROXIMATE                              TYPE OF
VESSEL             BUILT     DWT.       CONSTRUCTION   FLAG   EMPLOYMENT

VLCCs
Front Century        1998     311,000    Double-hull    BA     Spot market
Front Champion       1998     311,000    Double-hull    BA     Spot market

SUEZMAX
Front Warrior        1998     153,000    Double-hull    BA     Spot market
Kim Jacob*           1998     158,000    Double-hull    SG     Spot market

1.   BA - Bahamas, LR - Liberia, NO - Norway, NIS - Norwegian International
     Ship Register, SG - Singapore

*    Vessels obtained through the acquisition of ICB





































                               20



<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY.

Other than its interests in the vessels described in Item 1, the
Company owns no material physical properties. The Company leases
office space in Hamilton, Bermuda. Frontline Management leases
office space, at market rates, in Oslo, Norway from Sea Shipping
AS, a company indirectly affiliated with Hemen, the Company's
principal shareholder.  One of the Company's subsidiaries leases
office space in London, England.

ITEM 3. LEGAL PROCEEDINGS.

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's
management believes that the resolution of such claims will not
have a material adverse effect on the Company's operations or
financial condition.

ITEM 4. CONTROL OF REGISTRANT.

The Company is indirectly controlled by another corporation (see
below). The following table presents certain information
regarding the current ownership of the Ordinary Shares with
respect to (i) each person who is known by the Company to own
more than 10 per cent of the Company's outstanding Ordinary
Shares; and (ii) all directors and officers as a group as of June
13, 2000.

                                          ORDINARY SHARES
OWNER                                  AMOUNT            PER CENT

Hemen Holding Ltd. (1)                 34,579,054        46.25%
All Directors and Officers
  as a group (7 persons) (2)           34,657,506        46.35%

(1)  Hemen Holding Ltd. is a Cyprus holding company indirectly
     controlled by Mr. John Fredriksen, Chairman and Chief
     Executive Officer of the Company.
(2)  Includes Ordinary Shares held by Hemen Holding Ltd.

ITEM 5.  NATURE OF TRADING MARKET.

The Company's Ordinary Shares are traded on the Oslo Stock
Exchange ("OSE") under the Symbol "FRO" and on the London Stock
Exchange ("LSE") under the symbol "FRO" ("LOFS" prior to May 13,
1998). The Company's ADSs, each of which represents one Ordinary
Share, are traded on the Nasdaq National Market under the symbol
"FRONY" ("LOFSY" prior to May 12, 1998). The ADSs are evidenced


                               21



<PAGE>

by American Depositary Receipts ("ADRs"). The ADRs are issued by
The Bank of New York as Depositary.

The Nasdaq National Market is the Company's "primary listing". As
an overseas company with a secondary listing on the LSE, the
Company is not required to comply with certain listing rules
applicable to companies with a primary listing on the LSE. The
listing on the OSE is also considered to be a secondary listing.

The following table sets forth, for the two most recent fiscal
years, the high and low closing prices for the Ordinary Shares on
the OSE, the high and low closing prices for the ADSs as reported
by the Nasdaq National Market and the high and low closing middle
market quotations for the Ordinary Shares on the LSE as derived
from its Daily Official List.

                                     OSE      NASDAQ             LSE (1)
                      HIGH       LOW        HIGH     LOW     HIGH       LOW
                                                            (pound    (pound
                                                           sterling) sterling)
FISCAL YEAR ENDED
  DECEMBER 31, 1998

First quarter         NOK92      NOK65      $14.50   $12.00     9.20     6.50
Second quarter        NOK82      NOK45      $13.00    $6.50     7.25     6.75
Third quarter         NOK54      NOK19       $8.75    $4.25     7.25     5.25
Fourth quarter        NOK21      NOK8        $5.00    $3.13     6.25     3.00

FISCAL YEAR ENDED
  DECEMBER 31, 1999

First quarter         NOK23.50   NOK16.50    $3.63    $3.00     3.05     2.35
Second quarter        NOK29.30   NOK16.00    $3.75    $3.00     3.00     2.35
Third quarter         NOK33.00   NOK26.00    $4.25    $3.00     3.00     1.78
Fourth quarter        NOK45.00   NOK32.30    $4.13    $3.50     1.93     1.73


(1)  The middle market quotations are computed from the daily official prices
     as derived from the "Daily Official List" of the LSE as of the close of
     such exchange on the relevant dates and do not necessarily reflect the
     actual price of the last transaction on the relevant dates.

As of June 13, 2000, the number of record holders of Ordinary
Shares and ADSs in the United States was 28 and 4, respectively,
excluding the Bank of New York as Depositary. At that date, an
aggregate of 4,546,634 Ordinary Shares and 1,520,756 ADSs were
held of record in the United States, excluding the Bank of New
York as Depositary. Such holdings represent 8.11 per cent of the
Ordinary Shares outstanding on that date.




                               22



<PAGE>

ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING
SECURITY HOLDERS.

The Company is classified by the Bermuda Monetary Authority as a
non-resident of Bermuda for exchange control purposes.

The transfer of ADSs or Ordinary Shares between persons regarded
as resident outside Bermuda for exchange control purposes may be
effected without specific consent under the Exchange Control Act
of 1972 and regulations thereunder and the issuance of Ordinary
Shares (including shares to be represented by ADSs) to persons
regarded as resident outside Bermuda for exchange control
purposes may be effected without specific consent under the
Exchange Control Act of 1972 and regulations thereunder. Issues
and transfers of ADSs or Ordinary Shares involving any person
regarded as resident in Bermuda for exchange control purposes
require specific prior approval under the Exchange Control Act of
1972.

The owners of ADSs or Ordinary Shares who are ordinarily resident
outside Bermuda are not subject to any restrictions on their
rights to hold or vote their shares. Because the Company has been
designated as a non-resident for Bermuda exchange control
purposes, there are no restrictions on its ability to transfer
funds in and out of Bermuda or to pay dividends to US residents
who are holders of ADSs, other than in respect of local Bermuda
currency.

As an "exempted company", the Company is exempt from Bermuda laws
which restrict the percentage of share capital that may be held
by non-Bermudians.

As of May June 13, 2000, 124,558 of the authorised and unissued
Ordinary Shares were reserved for issue pursuant to subscription
under existing warrants which can be exercised at any time up to
December 31, 2003. As of June 13, 2000, 2,600,000 of the
authorised and unissued Ordinary Shares were reserved for issue
pursuant to subscription under Frontline Warrants which can be
exercised at any time up to May 11, 2001. See Item 12 "Options to
Purchase Securities from Registrant or Subsidiaries". Under the
conditions upon which the warrants were issued, certain
restrictions and conditions apply to the Company for so long as
the subscription rights under the warrants remain exercisable.

In connection with the Amalgamation, on May 11, 1998, the Company
adopted revised Bye-laws. These Bye-laws contain certain
restrictions with respect to the registration of shares which are
summarised below:

(i)  The Board may decline to register the transfer of any share
     held through the Verdipapirsentralen ("VPS"), the


                               23



<PAGE>

     computerised central share registry maintained in Oslo,
     Norway, for bodies corporate whose shares are listed for
     trading on the OSE, if the registration of such transfer
     would be likely, in the opinion of the Board, to result in
     fifty per cent or more of the aggregate issued share capital
     of the Company or shares of the Company to which are
     attached fifty per cent or more of the votes attached to all
     outstanding shares of the Company being held or owned
     directly or indirectly, (including, without limitation,
     through the VPS) by a person or persons resident for tax
     purposes in Norway (or such other jurisdiction as the Board
     may nominate from time to time).

(ii) If fifty per cent or more of the aggregate issued share
     capital of the Company or shares to which are attached fifty
     per cent or more of the votes attached to all outstanding
     shares of the Company are found to be held or owned directly
     or indirectly (including, without limitation, through the
     VPS) by a person or persons resident for tax purposes in
     Norway (or such other jurisdiction as the Board may nominate
     from time to time), other than the Registrar in respect of
     those shares registered in its name in the Register as
     nominee of persons whose interests in such shares are
     reflected in the VPS, the Board shall make an announcement
     to such effect through the OSE, and the Board and the
     Registrar shall thereafter be entitled and required to
     dispose of such number of shares of the Company or interests
     therein held or owned by such persons as will result in the
     percentage of the aggregate issued share capital of the
     Company held or owned as aforesaid being less than fifty per
     cent.

ITEM 7.  TAXATION.

BERMUDA TAX CONSIDERATIONS

Bermuda currently imposes no tax (including a tax in the nature
of an income, estate duty, inheritance, capital transfer or
withholding tax) on profits, income, capital gains or
appreciations derived by, or dividends or other distributions
paid to US Shareholders of ADSs or Ordinary Shares. Bermuda has
undertaken not to impose any such Bermuda taxes on US
Shareholders of ADSs or Ordinary Shares prior to the year 2016
except in so far as such tax applies to persons ordinarily
resident in Bermuda.

There is no income tax treaty between the United States and
Bermuda pertaining to the taxation of income except in the case
of insurance enterprises. There also is no estate tax treaty
between the United States and Bermuda.



                               24



<PAGE>

ITEM 8. SELECTED FINANCIAL DATA.

The selected income statement data of the Company with respect to
the fiscal years ended December 31, 1999, 1998 and 1997 and the
selected balance sheet data of the Company with respect to the
fiscal years ended December 31, 1999 and 1998 have been derived
from the Company's Consolidated Financial Statements included
herein and should be read in conjunction with such statements and
the notes thereto.  The selected income statement data with
respect to the fiscal years ended December 31, 1996 and 1995 and
the selected balance sheet data with respect to the fiscal years
ended December 31, 1997, 1996 and 1995 has been derived from
consolidated financial statements of the Company not included
herein. The selected financial data with respect to the fiscal
years ended December 31, 1998 and 1997 has been restated to
reflect the treatment of ICB as an investment accounted for in
accordance with the equity method. (See Item 1. "Description of
Business - Business Acquisitions and Combinations - Acquisition
of ICB"). The following table should also be read in conjunction
with Item 9 "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Company's
Consolidated Financial Statements and Notes thereto included
herein.






























                               25



<PAGE>

                                    Fiscal Year Ended December 31,

                          1999       1998         1997     1996       1995
                               (restated)   (restated)
                               (in thousands, except per Ordinary Share data)


INCOME STATEMENT DATA:
Net operating revenues   $253,214    $203,860    $197,197  $110,471  $134,953
Net operating (loss)
  income after
  depreciation          $(12,210)     $72,455     $55,476    $5,127   $22,164
Net (loss) income       $(86,896)     $31,853     $22,794 $(13,981)    $2,574
Earnings (loss) per
  Ordinary Share
 - basic and diluted      $(1.76)       $0.69       $0.63   $(0.92)     $0.20
Cash dividends
  per Ordinary Share           $-          $-          $-        $-        $-

BALANCE SHEET DATA
  (AT END OF PERIOD):
Cash and cash equivalents $65,467     $74,034     $86,870   $58,003   $70,989
Newbuildings under
  construction            $32,777     $75,681     $48,474        $-         -
Vessels and
  equipment, net       $1,523,112  $1,078,956    $970,590  $831,981  $450,398
Total assets           $1,726,793  $1,505,414  $1,369,849  $921,113  $549,879
Long-term debt
  (including current
  portion)             $1,079,694    $883,021    $773,150  $561,942  $358,579
Stockholders' equity     $557,300    $583,574    $556,010  $327,700  $165,723






















                               26



<PAGE>

ITEM 9.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

The following discussion should be read in conjunction with Item
8 "Selected Financial Data" and the Company's audited
Consolidated Financial Statements and Notes thereto included
herein.

The Company's principal focus and expertise are to serve major
integrated oil companies and other customers that require
transportation of crude oil and oil products cargoes. The Company
owns and operates 41 vessels and operates a further 4 vessels as
of June 14, 2000. In mid 1998, the Company took delivery of three
Suezmax newbuildings and in each of July and December 1998, the
Company took delivery of a VLCC newbuilding. The VLCC
newbuildings were subsequently sold to German KG Structures and
leased back on bareboat charters for a period of eight years with
the option on the buyer's side to extend the charter for 2+1+1
years. The Company has the right to extend the charter for 2
years, provided the buyer's options are exercised. In 1999, the
Company took delivery of a further three VLCC newbuildings and in
February and April 2000, took delivery of a further two Suezmax
newbuildings. The delivery of the Suezmax newbuildings in the
first part of 2000 completed the Company's existing newbuilding
program.  However, in the first half of 2000 the Company also
entered into a number of transactions to acquire second-hand and
newbuilding vessels. The Company acquired one VLCC newbuilding,
one Suezmax newbuilding, two second-hand VLCCs and has acquired a
forty per cent interest in a second-hand VLCC.

Through the acquisition of ICB in 1999 (See Item 1. "Description
of Business - Business Acquisitions and Combinations-Acquisition
of ICB") the Company acquired two VLCCs and six Suezmax tankers
and chartered-in one Suezmax tanker. In the two year period prior
to September 1999, Frontline was unable to control, or exercise
significant influence over, ICB. Accordingly, the Company
previously accounted for its investment in ICB as an available-
for-sale security in accordance with SFAS 115. As a result of
Frontline acquiring control over ICB, the Company's financial
statements have been restated. For the years ended December 31,
1997 and 1998, the investment in ICB is accounted for in
accordance with the equity method. For the year ended December
31, 1999, ICB has been consolidated with effect from January 1,
1999.

The Company's vessels are operated under either time charters,
voyage charters or contracts of affreightment ("COAs"). A time
charter is a contract for the use of a vessel for a specific
period of time. A voyage charter is a contract for the use of a


                               27



<PAGE>

vessel for a specific voyage. Under a time charter, the charterer
pays substantially all of the vessel voyage costs. Under a voyage
charter, the vessel owner pays such costs. Vessel voyage costs
are primarily fuel and port charges. Accordingly, for equivalent
profitability, charter income under a voyage charter would be
greater than that under a time charter to take account of the
owner's payment of the vessel voyage costs. However, net
operating revenues would be equal. It is standard industry
practice to measure the revenue performance of a vessel in terms
of average daily time charter equivalent earnings ("TCEs"). For
voyage charters, this is calculated by dividing net operating
revenues by the number of days on charter. Days spent offhire are
excluded from this calculation.

In December 1999, the Company, together with A.P. Moller, Euronav
Luxembourg SA, Osprey Maritime Ltd., Overseas Shipholding Group,
Inc and Reederei "Nord" Klaus E. Oldendorff formed Tankers
International LLC ("Tankers") to pool the commercial operation of
the participating companies' modern VLCC fleets (the "Tankers
Pool"). Tankers began operations on February 1, 2000, with an
initial fleet of 39 modern VLCCs (of which the Company
contributed twelve vessels). Tankers' fleet currently constitutes
10 per cent of the world VLCC fleet. By 2002, as the participants
take delivery of newbuildings and vessels are redelivered from
time charters, Tankers' fleet is expected to exceed 50 vessels.
Tankers mainly employs ships in the spot market, although it also
from time to time enters into COAs and time charters. Revenues to
each shipowner who participates in Tankers are calculated on the
basis of the pool's total earnings and the tonnage committed into
Tankers by the shipowner.

By consolidating the commercial operation of its substantial VLCC
fleet into a unified transportation system, Tankers offers its
customers "one stop shopping" for high quality modern VLCC
tonnage. The size of the fleet enables Tankers to become the
logistics partner of major customers, providing new and improved
tools to manage shipping programs, inventories and risk. The
Company believes that Tankers will enhance the financial
performance of pool vessels through higher utilisation and other
operating efficiencies. Tankers also seeks to reduce vessel
operating costs by facilitating joint purchasing of goods and
services by pool participants.

In 1998, in order to increase the Company's market share in the
Suezmax trades and increase the trading flexibility, the Company
and OMI Corporation, a major international shipping company,
combined Suezmax tanker fleets for commercial purposes and
created Alliance Chartering LLC ("Alliance"). Alliance currently
markets 40 Suezmax tankers, of which the majority are employed in
the Atlantic market, comprising approximately 30 per cent of the
total Suezmaxes trading in the spot market in the Atlantic basin.


                               28



<PAGE>

Alliance's control of the largest modern fleet of Suezmaxes has
enabled it to strengthen relationships and obtain contracts with
a number of customers. These contracts may allow Alliance the
opportunity to increase its Suezmax fleet utilisation through
backhauls when cargo is available (that is, transporting cargo on
the return trip when a ship would normally be empty) which will
improve vessel earnings.

The shipping industry is highly cyclical, experiencing volatility
in profitability, vessel values and charter rates. In particular,
freight and charterhire rates are strongly influenced by the
supply of vessels and the demand for oil transportation. Freight
rates weakened in the second half of 1998 and further
deteriorated throughout 1999 as a result of OPEC oil production
cuts to support oil prices, relatively high world oil
inventories, weakness in oil demand due to the continued
Southeast Asian economic crisis as well as the onset of a
recession in Latin America and the relatively large tanker
newbuilding delivery schedule. Towards the end of 1999, Suezmax
rates started to improve followed by improving VLCC rates at the
end of the first quarter of 2000. The improving market conditions
were supported by a reduction of transportation capacity through
the scrapping of elderly tonnage in 1999. More stringent
practises among charterers in selection of tonnage following the
sinking of the 23 year old tanker, Erika, off Brittany in
December 1999, also contributed to the reduction of tonnage
supply as older vessels were excluded from certain trades.
Following OPEC's decision to increase its quota for oil
production in March 2000, the increase in demand for tonnage
resulted in further improvement of the supply/demand balance for
tankers and thereby rates in the market strengthened further.

Currently, in June 2000, the tanker industry is experiencing
booming charter rates, at levels higher than have been achieved
for several years. VLCCs are currently chartered at above $40,000
per day and Suezmaxes at approximately $30,000 per day.

The following table sets out the daily TCEs earned by the
Company's fleet over the last four years:

                         1999     1998     1997     1996
(in $ per day)
VLCC                     20,000   31,800   32,700   27,700
Suezmax                  16,700   22,400   24,800   26,800
Suezmax OBO              16,800   21,800   25,500   23,000

In the fourth quarter of 1997, management determined that the
useful life of its vessels was 25 years rather than 20 years as
previously estimated. A change in accounting estimate was
recognised to reflect this decision, resulting in an increase in
net income of approximately $3,600,000 in the fourth quarter.


                               29



<PAGE>

SIGNIFICANT RECENT DEVELOPMENTS

See Item 1 - "Description of Business - Significant Recent
Developments".

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999, COMPARED WITH THE YEAR ENDED
DECEMBER 31, 1998

Total net operating revenues increased by 24 per cent in 1999
compared with 1998. This increase reflects the increase in the
size of the fleet due to deliveries of newbuildings during 1998
and 1999 and the consolidation of ICB, offset by lower rates
obtained in the tanker market.  The average daily TCEs earned by
VLCCs, Suezmax tankers, and Suezmax OBO carriers decreased from
1998 to 1999 by $11,800, $5,700 and $5,000, respectively.  Total
days technical off-hire, including drydockings, were 170 in 1999
compared to 135 in 1998.  In 1999, the Company sold one Suezmax
and four VLCCs recording a net loss on sales of $37.8 million.
In 1998, the Company sold two VLCCs and one woodchip carrier,
recording a net loss on sales of $1.5 million.

For 1999, earnings before interest, tax, depreciation and
amortisation, including earnings from associated companies
declined 40 per cent to $82.3 million.  The result primarily
reflects the loss on sale of four vessels arising from the
acquisition and consolidation of ICB combined with the effect of
the decline in the market rates achieved.

Average daily operating costs, including provisions for
drydockings, decreased for all size of vessels as the benefits of
the cost reduction program were realised.  The average daily
operating costs were $6,800, $6,000 and $6,400 for the VLCCs, the
Suezmaxes and Suezmax OBOs respectively, compared to $7,600,
$6,400 and $6,700 for 1998.  Administrative expenses increased
due to ICB being consolidated in 1999.  As ICB's Stockholm office
was closed down in early 2000, costs are expected to decrease.

Depreciation increased 77 per cent from 1998 to 1999, due to the
consolidation of ICB and the additional vessels delivered in 1998
and 1999.  Net other expenses for 1999 were $78.9 million
compared to $40.6 million in 1998.  The increase is due to the
consolidation of ICB which lead to higher debt levels and lower
income from associated companies, as well as increased debt
levels due to the fleet expansion.  The average rate of interest
of the debt at year end 1999 was 7.2 per cent compared to 7.0 per
cent in 1998.





                               30



<PAGE>

YEAR ENDED DECEMBER 31, 1998, COMPARED WITH THE YEAR ENDED
DECEMBER 31, 1997

Total net operating revenues increased by 3 per cent in 1998 from
$197.2 million to $203.9 million. This increase reflects the
increase in the size of the fleet, offset by lower trading
results prevailing in the tanker market. The average daily TCEs
earned by the VLCCs, Suezmax tankers, and Suezmax OBO carriers
were $31,800, $22,400 and $21,800 compared with $32,700, $24,800
and $25,500 for 1997. The total days technical offhire, including
drydockings, were 135 in 1998 compared with 122 in 1997.

In 1998, the Company sold two VLCCs and one woodchip carrier,
thereby recording a net loss on the sales of $1.5 million.

For 1998, earnings before interest, tax, depreciation and
amortization, including earnings from associated companies were
$137.1 million, compared with $122.2 million for the comparable
period. This result reflects the contribution of the expanded
fleet, the inclusion of ICB under the equity method for the whole
year in 1998 and reduced administrative expenses, offset by lower
trading results in all sectors in which the Company operates and
a loss on the sale of the two VLCCs to German KGs.

Average daily operating costs, including provisions for
drydockings, decreased for the Suezmax and Suezmax OBO fleets in
1998 as the benefits of a new ship management and cost reduction
program were realised. The average daily operating costs of the
VLCCs, Suezmax tankers, and OBOs, including dry-docking and
insurance costs, were $7,600, $6,400 and $6,700 in 1998 compared
with $6,700, $7,500 and $7,000 for 1997. The increase in the
average daily operating costs of the VLCCs reflects expenditure
on structural maintenance for two of the older vessels.
Administrative expenses decreased by 31 per cent, primarily due
to a non-recurring charge for re-domiciling costs in 1997.

Depreciation decreased by nine per cent in 1998 due to the change
in the depreciation schedule for the fleet from 20 to 25 years in
the fourth quarter of 1997.

Net other expenses for 1998 were $53.6 million (1997 - $42.6
million). This increase reflects the increased average level of
debt associated with the fleet expansion.

LIQUIDITY AND CAPITAL RESOURCES

The Company operates in a capital intensive industry and has
historically financed its purchase of tankers and other capital
expenditures through a combination of cash generated from
operations, equity capital and borrowings from commercial banks.
The liquidity requirements of the Company relate to servicing its


                               31



<PAGE>

debt, funding the equity portion of investments in vessels,
funding working capital and maintaining cash reserves against
fluctuations in operating cash flows.

Revenues from time charters are received monthly in advance while
revenues from voyage charters are received upon completion of the
voyage. Accounts receivable are generally collected on a timely
basis. Inventory requirements, consisting primarily of fuel,
lubricating oil and spare parts, are higher for voyage charters,
due to the majority of these items being paid for by the
charterer under a time charter. The expansion of the fleet in
fiscal years 1998 and 1999 has resulted in increased working
capital requirements.

As of December 31, 1999 and 1998, the Company has cash and cash
equivalents of $65.5 million and $74.0 million, respectively. The
Company generated cash from operations of $46.5 million in 1999,
compared with $69.6 million in 1998. Net cash from investing
activities was $169.4 million in 1999 compared to $283.3 million
used in 1998. In 1999, investing activities consisted primarily
of payments for vessel acquisitions, totalling $200.7 million,
proceeds from sale of four VLCCs and one Suezmax of $239.0
million and net proceeds from acquisition of ICB of $126.0
million. In 1998, investing activities consisted primarily of
payments for vessel acquisitions, totalling $352 million. The
sale of the two VLCCs generated cash of approximately $165.0
million in 1998. A further $10.4 million was invested in ICB in
1998.

As of December 31, 1998 and 1997, the Company has cash and cash
equivalents of $74.0 million and $86.9 million, respectively.
The Company generated cash from operations of $69.6 million in
1998, compared with $67.4 million in 1997.  Net cash used in
investing activities decreased from $283.3 million in 1997 to
$144.0 million.  In 1998, investing activities consisted
primarily of payments for vessel acquisitions, totalling $352
million compared with $51.8 million in 1997.  However, the sale
of the two VLCCs generated cash of approximately $165 million in
1998 compared with $50.6 million on the sale of the three
Panamaxes in 1997.  In 1997, Frontline paid a net amount of $69.7
million for the acquisition of LOF and $220.6 million for shares
in ICB.  A further $10.4 million was invested in ICB in 1998.

The Company used net cash in financing activities totalling
$224.5 million in 1999. In 1998 the Company generated net cash
from financing activities of $61.5 million. In 1999, proceeds
from long-term debt were $505.9 million. In 1998, proceeds from
long-term debt were $327.8 million of which $230.2 million
related to traditional bank type financing of vessels and $97.6
million was in the form of loans from Metrogas Holdings and an
affiliated company, see below. See Item 13. " Interest of


                               32



<PAGE>

Management in Certain Transactions". Repayments were $679.2
million and $265.2 million in 1999 and 1998 respectively. In
1999, Frontline generated cash of $54.7 million from issuance of
equity, and used $98.1 million on purchase of minority in ICB.

The Company generated net cash from financing activities of $61.5
million in 1998, compared with $244.7 million in 1997.  In 1998,
proceeds from long-term debt were $327.8 million of which $230.2
million related to traditional bank type financing of vessels and
$97.6 million was in the form of loans from Metrogas Holdings and
an affiliated company.  See Item 13.  "Interest of Management in
Certain Transactions".  Repayments were $265.2 million in 1998.
In 1997, Frontline generated cash of $165.5 million from two
issues of equity.

The Company had total interest bearing debt as of December 31,
1999 in the amount of $1,079.7 million compared to $883.0 million
as of December 31, 1998. All debt related to the ICB transaction
was repaid by December 31, 1999.

On June 16, 1999, the Company's largest bank syndicate, led by
Skandinaviska Enskilda Banken ("SEB"), agreed to change the loan
profile on the facility provided to the Company. Quarterly
instalments at the time were reduced to $8.4 million from $10.5
million with a resultant increase in the final instalment due on
November 28, 2003 from $136.5 million to $174.3 million. This
reduction in quarterly instalments will boost the Company's
liquidity by $37.8 million during the remaining period of the
loan, equivalent to $8.4 million per annum.

On June 29, 1999, the Company signed a loan agreement for
refinancing the vessel "Lillo". The loan was drawn down on June
30, 1999, and partly used to repay the portion relating to Lillo
under the SEB facility discussed above. The net effect of the
refinancing was to improve the Company's liquidity by $9.2
million.

In December 1997, the three Suezmaxes owned originally by LOF
were refinanced. The last and major part of this loan was drawn
down at the time of the Amalgamation in May, 1998. At the same
time, Frontline repaid the related $75 million share acquisition
loan. The first two Suezmax newbuildings delivered in 1998 were
financed by a facility established in December 1997; the third
Suezmax and the first VLCC new building were financed by
facilities signed in May and July 1998. The aforementioned VLCC
was subsequently sold to a German KG along with the second
delivered VLCC, and leased back. By converting the financing of
these two VLCCs from traditional bank financing to sale and lease
back, Frontline was able to free a substantial amount of cash and
thereby improve its liquidity position.



                               33



<PAGE>

In December 1998 and March and July 1999, the three remaining
VLCC newbuildings were financed through traditional bank
financing. In September 1999 a bridge loan facility to acquire
the remaining minority shares in ICB was put in place. This loan
was repaid in December 1999, at the same time Frontline
refinanced six of the vessels acquired through the ICB
transaction.

In February 2000 financing was secured on the last two Suezmax
newbuildings. At the same time financing was secured through
another bank for a Suezmax newbuilding acquired from the Mosvold
Farsund Group. In March 2000 financing was secured for a joint
venture in which Frontline controls 40% to acquire a second-hand
VLCC. In May 2000 the Company secured financing for the two VLCCs
acquired from Wilh. Wilhelmsen. At the same time a separate
financing was secured for the financing of a newbuilding taken
over from the Golden Ocean Group.

Metrogas Holdings ("Metrogas"), a company related to the
Company's Chairman, had outstanding as of December 31, 1998 a
specific loan of $89.0 million provided to the Company. This loan
has since been converted to a separate long-term financing
facility as described below.

As of December 31, 1998, the Company did not comply with the
equity ratio covenants in a number of the loan agreements. During
1999, management initiated discussions with the Company's lending
banks with the purpose of lowering the breached covenant
requirements in such loan agreements at least until January 1,
2001. The requested changes were made with the intention of
making the Company's financing arrangements more flexible in the
event of a prolonged negative market scenario, including falling
second-hand prices. Included in the request for changes was a
proposal to subordinate the $89.0 million loan given by Metrogas
(the "Metrogas Loan") to loans given by the Company's lending
banks. In addition, the proposal included reclassifying the
Subordinated Loan as equity for the purposes of calculating the
Company's equity ratio.

As of July 13, 1999, the discussions with Metrogas and the
Company's lending banks have been finalised and the Company and
Metrogas have signed a Subordinated Convertible Loan Facility
Agreement. Accordingly, the Company received acceptance of
reduced covenant levels from all but one of the Company's 19
lending banks. This one bank, however, was subject to the
authority of the majority lenders, who have agreed to accept
lower covenant levels until January 1, 2001. The aforementioned
bank has since been replaced.

As of December 31, 1999, the Company complied with the debt
covenants of its various debt agreements.


                               34



<PAGE>

During 1999 and the first half of 2000, the Company has issued
equity in a number of transactions. The Company issued
approximately $20 million in equity through a private placement
in September 1999. At the same time $35 million of the Metrogas
Loan was converted to equity.

In February 2000, the Company issued approximately $24 million in
equity through a private placement. At the same time another $30
million of the Metrogas Loan was converted to equity, leaving $24
million plus interest outstanding.

In May 2000, the Company issued approximately $30 million in
equity through a private placement and On June 20, 2000, the
Company approximately $46.8 million through the issuance of
4,000,000 ordinary shares at a price of NOK 104.5 per share in a
private placement to a group of international institutional
investors. The proceeds from these equity issues have been used
for specific vessel acquisitions and general corporate working
capital requirements.

SEASONALITY

Historically, oil trade and therefore charter rates increased in
the winter months and eased in the summer months as demand for
oil in the Northern Hemisphere rose in colder weather and fell in
warmer weather. Seasonal variations in the Company's revenues
still exist but are much less pronounced than they once were due
to a number of factors. The tanker industry in general is less
dependent on the seasonal transport of heating oil than a decade
ago as new uses for oil and oil products have developed,
spreading consumption more evenly over the year.

INFLATION

Although inflation has had a moderate impact on operating
expenses, drydocking expenses and corporate overheads, management
does not consider inflation to be a significant risk to direct
costs in the current and foreseeable economic environment. In
addition, in a shipping downturn, costs subject to inflation can
usually be controlled because shipping companies typically
monitor costs to preserve liquidity and encourage suppliers and
service providers to lower rates and prices. However, in the
event that inflation becomes a significant factor in the world
economy, inflationary pressures could result in increased
operating and financing costs.








                               35



<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARDS AND SECURITIES AND
EXCHANGE COMMISSION RULES

Statement of Financial Accounting Standards No. 133, "Accounting
for Derivatives and Hedging Activities", as amended by Statement
of Financial Accounting Standards No. 137, is effective January
1, 2001 for the Company and requires that all derivative
instruments be recorded on the balance sheet at their fair value.
Changes in the fair value of derivatives are recorded each period
in current earnings or other comprehensive income, depending on
whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction. The Company is
assessing the impact that the adoption of SFAS No. 133 will have
on the Company's consolidated financial statements.

UPDATE ON IMPACT OF THE YEAR 2000 PROBLEM

The common practice of using 2 digits to represent the year in
computer databases, software applications and microprocessors,
which may have caused such computer systems to either shut down
completely or provide incorrect calculations by the year 2000, is
known as the Year 2000 Problem. This problem could have affected
the shipping industry since most ship management companies and
shipowning companies, such as the Company, rely on date dependent
computer systems.

In 1998 and 1999, the Company took steps to evaluate the action
required, and likely costs, to ensure that its systems would be
year 2000 compliant ("Y2K") including its own internal systems,
the systems of its independent ship managers and the systems on
board the Company's vessels. All newbuildings delivered in 1998,
1999 and in 2000, are guaranteed by the shipyard to be Y2K
compliant.

The Company experienced no disruptions in critical information
technology and non-information technology systems and believes
those systems successfully responded to the Year 2000 date
change. The costs associated with Year 2000 compliance activities
were not material to the Company's financial position and such
costs were expensed as incurred. The Company is not aware of any
material problems resulting from Year 2000 issues. The Company
will continue to monitor its computer applications, and those of
its service providers and others whose Year 2000 compliance is
critical to the Company, throughout the year 2000 to ensure that
any Year 2000 related matters that may arise are addressed
promptly.







                               36



<PAGE>

ITEM 9A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

MARKET RISK

The Company is exposed to various market risks, including
interest rates. The exposure to interest rate risk relates
primarily to its debt and related interest rate swaps. The
majority of this exposure is the floating rate debt, which
totalled $904.5 million at December 31, 1999 (1998: $840.7
million). The Company has entered into interest rate swap
agreements to manage its exposure with interest rates by locking
in fixed interest rates from floating rates. At December 31,
1999, there were ten swaps with a total notional principal of
$293.7 million (1998: eleven swaps with notional principal of
$441.2 million). The swap agreements have various maturity dates
from May 2000 to August 2003, and the Company would have a
positive gain $5.6 million if it were to terminate the agreements
as of December 31, 1999. The maximum exposure to the interest
rate fluctuations is $610.8 (1998: $386.7 million). A one per
cent change in interest rates would increase (decrease) the
interest expense by $6.1 million per year as of December 31, 1999
(1998: $4.5 million).

The fair market value of the fixed rate debt on the balance sheet
was $168.5 million as of December 31, 1999 (1998: $18.8 million).
If the interest rate was to increase (decrease) by one per cent
with all other variables remaining constant, the market value of
the fixed rate debt would decrease (increase) by approximately
$3.4 million (1998: $0.3 million).

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. As a result, the
Company's equity is exposed to fluctuations in the share price of
marketable securities considered to be available-for-sale. A ten
per cent change in the market value of such securities would
increase (decrease) equity by $1.1 million as of December 31,
1999.

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, Swedish kronor or Norwegian kroner and risks
of two kinds arise as a result: a transaction risk, that is, the
risk that currency fluctuations will have a negative effect on
the value of the Company's cash flows; and a translation risk,
the impact of adverse currency fluctuations in the translation of
foreign operations and foreign assets and liabilities into U.S.


                               37



<PAGE>

dollars for the Company's consolidated financial statements. The
Company has not entered into forward contracts for either
transaction or translation risk, which may have an adverse effect
on the Company's financial condition and results of operations.

ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT.

Information concerning each director and executive officer of the
Company is set forth below.

NAME                      AGE    POSITION

John Fredriksen           56     Chairman, Chief Executive
                                   Officer, President and
                                   Director
Tor Olav Troim            37     Vice-President and Director
A. Shaun Morris           40     Director
Timothy J. Bridges        35     Director
Kate Blankenship          35     Chief Accounting Officer and
                                   Company Secretary
Ola Lorentzon             50     Managing Director of Frontline
                                   Management
Tom E. Jebsen             42     Chief Financial Officer of
                                   Frontline Management

Certain biographical information about each of the directors and
executive officers of the Company is set forth below.

John Fredriksen has been the Chairman of the Board, Chief
Executive Officer, President and a director of the Company since
November 3, 1997. He was previously the Chairman and Chief
Executive Officer of Frontline. Mr. Fredriksen has served for
over six years as a director of Sea Tankers Management Co. Ltd.
("Sea Tankers"), a ship operating company and an affiliate of the
Company's principal shareholder. Mr. Fredriksen indirectly
controls Hemen.

Tor Olav Troim has been Vice-President and a director of the
Company since November 3, 1997. He previously served as Deputy
Chairman of Frontline from July 4, 1997, and was a director of
Frontline from July 1, 1996. Mr. Troim also serves as a director
of Frontline AB, a wholly-owned subsidiary of the Company, and
until April, 2000 was the Chief Executive Officer of Frontline
Management, which company supports the Company in the
implementation of decisions made by the Board of Directors. Mr.
Troim also serves as a consultant to Sea Tankers and since May
2000, has been a director and Vice-Chairman of Knightsbridge. He
is a director of Aktiv Inkasso ASA and Northern Offshore ASA,
both Norwegian publicly listed companies. Prior to his service
with Frontline, from January 1992, Mr. Troim served as Managing



                               38



<PAGE>

Director and a member of the Board of Directors of DNO AS, a
Norwegian oil company.

A. Shaun Morris has been a non-executive director of the Company
since November 3, 1997. Mr. Morris has been a Partner at Appleby,
Spurling & Kempe since April 1995, after joining the firm in 1988
as an associate, where he specialises in corporate/commercial
law.

Timothy J. Bridges has been a non-executive director of the
Company since June 11, 1999. He has been an attorney at Appleby,
Spurling & Kempe since April 1996. During the period May 1993
through March 1996, Mr. Bridges was an attorney at Wilde Sapte, a
United Kingdom law firm, and for approximately four years prior
thereto, he was an attorney with the United Kingdom law firm of
Norton Rose.

Kate Blankenship is Chief Accounting Officer and Secretary of the
Company. Mrs. Blankenship joined the Company in 1994. Prior to
joining the Company, she was a Manager with KPMG Peat Marwick in
Bermuda. She is a member of the Institute of Chartered
Accountants in England and Wales.

Ola Lorentzon has been Managing Director of Frontline Management
since April 2000. Mr. Lorentzon has also been a director and Vice
Chairman of Knightsbridge since September 18, 1996. Mr. Lorentzon
is also currently a director of the Swedish Protection and
Indemnity Club (SAAF) and the Swedish Ships' Mortgage Bank. Mr.
Lorentzon has been a director and President of ICB since 1987.

Tom E. Jebsen has served as Chief Financial Officer of Frontline
Management since June 1997. From December 1995 until June 1997,
Mr. Jebsen served as Chief Financial Officer of Tschudi & Eitzen
Shipping ASA, a publicly traded Norwegian shipowning company.
From 1991 to December 1995, Mr. Jebsen served as Vice President
of Dyno Industrier ASA, a publicly traded Norwegian explosives
producer.. Mr. Jebsen is also a director of Asuranceforeningen
Skuld, Unitas, a mutual hull and machinery club and Hugin AS, an
internet company.

In accordance with the Bye-laws of the Company the number of
Directors shall be such number not less than two as the Company
by Ordinary Resolution may from time to time determine and each
Director shall hold office until the next annual general meeting
following his election or until his successor is elected.

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.

During the year ended December 31, 1999, the Company paid to its
directors and officers of the Company (six persons) aggregate



                               39



<PAGE>

cash compensation of $520,576 and an aggregate amount of $31,937
for pension and retirement benefits.

Directors and officers of the Company have been granted options
to purchase Ordinary Shares. See Item 12 "Options to Purchase
Securities from Registrant or Subsidiaries".

ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT
OR SUBSIDIARIES.

WARRANTS

As of June 13, 2000, 124,588 of the authorised and unissued
Ordinary Shares were reserved for issue pursuant to subscription
under the existing warrants (the "Old Warrants") which can be
exercised at any time up to December 31, 2003 and 2,600,000
Ordinary Shares are reserved for issue pursuant to subscription
under the Frontline Warrants which can be exercised at any time
up to May 11, 2001.

Each Old Warrant entitles the holder to subscribe in cash for one
Ordinary Share in the Company at a price of 4.00 pound sterling,
payable in full upon subscription, subject to adjustment in the
event of any subdivision or consolidation of Ordinary Shares or
similar event. As of June 13, 2000, of the 220,588 Old Warrants
originally issued, 60,000 Old Warrants have been exercised and
36,030 Old Warrants have been repurchased by the Company.

Each Frontline Warrant entitles the holder to subscribe in cash
for one Ordinary Share in the Company at a price of $15.91,
payable in full upon subscription, subject to adjustment in the
event of any subdivision or consolidation of Ordinary Shares or
similar event. As of June 13, 2000, no Frontline Warrants have
been exercised.

As of June 13, 2000 Hemen has 13,054,471 Frontline Warrants.

OPTIONS

As of June 13, 2000, 329,000 of the authorised and unissued
Ordinary Shares were reserved for issue pursuant to subscription
under options granted under the Company's share option plans.

The Company maintains a Bermuda Employee Share Option Plan (the
"Bermuda Plan") and a United Kingdom Employee Share Option Plan
(the "U.K. Plan"). Under the terms of the plans, the exercise
price for the options may not be less than the average of the
fair market value of the underlying shares for the three dealing
days before the date of grant. The number of shares granted under
the plans may not exceed 7 per cent of the issued share capital



                               40



<PAGE>

of the Company. No consideration is payable for the grant of an
option.

Under the Bermuda Plan, options may be granted to any director or
employee of the Company or any subsidiary. Options are only
exercisable during a maximum period of nine years following the
first anniversary date of the grant or upon the termination of
the option holder from employment with the Company.

The following summarises the share option transactions under the
Bermuda Plan:

                                               SHARES      OPTION
                                                            PRICE
   (in thousands, except per share data)                PER SHARE

         Granted December 13, 1993            108         $15.00
         Granted November 8, 1994               4          13.82
         Granted October 31, 1995               3          13.48
         Granted February 5, 1997              19          11.73
         Granted December 23, 1999            300           5.53
         Granted March 1, 2000                 20           6.92
         Exercised                              -              -
    Cancelled                               (127)              -
                                           ------       --------
    Options outstanding at June 13, 2000      327          $5.53
                                                        to 13.82
                                           ======       ========

    Options exercisable at June 13, 2000        7         $11.73
                                                        to 13.82
                                           ======       ========





















                               41



<PAGE>

Under the U.K. Plan, options may be granted to any full-time
director or employee of the Company or any subsidiary. Options
are only exercisable during the period of seven years following
the third anniversary date of the grant or upon the termination
of the option holder from employment with the Company.

The following summarises the share option transactions under the
U.K. Plan:

                                               SHARES      OPTION
                                                            PRICE
   (in thousands, except per share data)                PER SHARE

         Granted January 5, 1994           46     9.85
                                                  pound
                                                  sterling
         Granted November 8, 1994          50     8.55
         Granted October 31, 1995          51     8.55
         Granted February 5, 1997          33     7.28
         Exercised                        (1)     -
         Cancelled                      (177)     -
                                       ------     ------
    Options outstanding at
    June 13, 2000                           2     7.28
                                                  pound
                                                  sterling
                                                  ======
    Options exercisable at June 13, 2000    2     7.28
                                                  pound
                                                  sterling
                                       ======     ======

As of June 13, 2000, the number of Ordinary Shares over which
directors and officers have options is as follows:

DIRECTOR OR OFFICER                               OPTIONS
John Fredriksen                                         -
Tor Olav Troim                                          -
Timothy J. Bridges                                      -
A. Shaun Morris                                         -
Kate Blankenship                                   24,000
Ola Lorentzon                                      50,000
Tom E. Jebsen                                      20,000
                                                   ------
                                                   94,000
                                                  =======

The options held by the directors and officers have all been
granted under the Bermuda Plan and have exercise prices ranging
from $5.53 to $13.83 and expiration dates from January 1, 2003 to
November 8, 2004.


                               42



<PAGE>

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS.

In June 1998, the Company obtained a loan of $87.5 million from
Metrogas, the Metrogas Loan, to finance the acquisition of the
five VLCC newbuilding contracts described below. This loan bears
interest at the rate of 6.75 per cent per annum. At December 31,
1998, an amount of $89 million was outstanding in respect of the
Metrogas Loan, including interest accrued thereon. In the year
ended December 31, 1998, the Metrogas Loan bore interest at the
rate of 6.75 per cent. Interest expense recorded by the Company
in 1998 in respect of this loan was $3,780,772. On September 30,
1999, $35 million of the $89 million Metrogas Loan was converted
to equity by the issuance of 8,230,000 shares at an issue price
of NOK 33.00. In connection with this conversion, Metrogas
offered $15 million of the resulting Ordinary Shares to existing
Frontline shareholders and warrant holders. In connection with
this secondary offering by Metrogas, Frontline bore costs of the
offering of $15,000. At December 31, 1999, an amount of $56.7
million was outstanding in respect of the Metrogas Loan,
including interest accrued thereon. In the year ended December
31, 1999, the Metrogas Loan bore interest at the rate of 8.0 per
cent and the Company incurred interest of $5.4 million, of which
$2.7 million was expensed.

In addition to the lending arrangement described above, Hemen
affiliated parties have, during 1998 and 1999, provided
additional short term financing to the Company. Such financing
bears interest at the rate of 6.75 per cent per annum. Interest
expense recorded by the Company in 1999 in respect of such
financing was $428,291 (1998 - $550,803).

In May 1999, Greenwich Holdings Ltd. ("Greenwich" - a company
indirectly controlled by the Company's Chairman) extended a loan
in the amount of $15,739,173 to the Company. The proceeds from
the loan were used to finance the acquisition of shares in ICB. A
loan agreement has been entered into in order to document the
terms of this loan, such terms including the Company pledging the
relevant shares in ICB to Greenwich's lender. Through this
acquisition, the Company increased its holding in ICB to 64 per
cent of the capital and 38 per cent of the votes.

In May 1998, the Company acquired control of three shipowning
and/or leasing structures which are organised in a non-recourse
holding company, ITC. The Company acquired ITC for $9.5 million.
The Company's investment in ITC was subsequently sold to Hemen,
the principal shareholder in the Company, for $9.5 million with
effect from July 1, 1998. The acquisition and sale of ITC are
treated as occurring on the same date for accounting purposes as
a result of the common control relationship between the Company
and Hemen. The results of ITC are therefore not consolidated in
the Company's financial statements for any period in 1999 and


                               43



<PAGE>

1998. The Company is the manager of the underlying operating
companies and has received a five year call option from Hemen to
buy back ITC.

In September 1997, Frontline entered into an agreement with a
company indirectly controlled by its Chairman, Mr. Fredriksen, to
acquire the shares of Fourways Marine Limited, the owner of the
1993 built Suezmax tanker Sea Spirit (renamed Front Spirit), in
exchange for 979,050 shares of Frontline at NOK 107.25 per share
plus assumption of the company's debt. Operational control of the
vessel was assumed on September 25, 1997. The share issuance to
purchase Sea Spirit was valued and recorded at $41.7 million,
which was $1 million less than three independent appraisals of
the vessel's fair market value.

In connection with the formation of Frontline in April 1997,
Frontline Management has leased office space in Oslo, Norway at
market rates from Sea Shipping AS, a company indirectly
affiliated with  Hemen.

During 1996, 1997 and January 1998, Frontline received options to
assume newbuilding contracts for the construction and purchase of
five Suezmax tankers at the Hyundai Heavy Industries Co. Ltd.
shipyard in South Korea for delivery in 1998 and 2000 from
single-ship owning companies (the "Suezmax Newbuilding
Companies") affiliated with Hemen Holding Ltd. ("Hemen"). Hemen
is the Company's largest shareholder and is indirectly controlled
by Mr. John Fredriksen, Chairman and Chief Executive Officer of
the Company. The first three of the Suezmax tankers were
delivered during 1998. The remaining two vessels were delivered
in February and April, 2000.

During 1997, Frontline received options from companies affiliated
with Hemen to assume five contracts for the construction and
purchase of five VLCCs to be built by Hyundai Heavy Industries
Co. Ltd. in South Korea at a price of $81.5 million per vessel.
These options were exercised in March 1998. No additional
consideration in excess of the newbuilding contract prices was
payable by Frontline upon exercise of such options. The first two
VLCC newbuildings were delivered in 1998, the third in January
1999 and the remaining two were delivered in mid 1999.

During 1997, a company indirectly controlled by Frontline's
Chairman purchased six Ultra Large Crude Carriers (ULCCs) from
third parties. Subsequently, two of these vessels were sold.
Frontline Management has entered into technical supervision
agreements and commercial management agreements in respect of the
remaining four vessels at market rates.

In addition, Frontline Management has entered into agreements for
the technical management of the gas carriers Northern Snow,


                               44



<PAGE>

Northern Ice and Northern Lights I, and the woodchip carrier Sea
Prince, and for the commercial management of Sea Prince, each
owned by companies indirectly controlled by the Company's
Chairman.

















































                               45



<PAGE>

                             PART II

ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED.

Inapplicable.


                            PART III

ITEM 15. DEFAULTS UPON SENIOR SECURITIES.

Inapplicable.

ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY
FOR REGISTERED SECURITIES.

On December 6, 1996, the Company's Board of Directors adopted a
Shareholder Rights Plan (the "Plan"). The Company adopted the
Plan to protect shareholders against unsolicited attempts to
acquire control of the Company that do not offer an adequate
price to all shareholders or are otherwise not in the best
interests of the Company and its shareholders. Under the Plan,
each shareholder of record on December 20, 1996 received one
right for each Ordinary Share held, and each registered holder of
outstanding warrants received one right for each Ordinary Share
for which they are entitled to subscribe. In addition, in
connection with the Amalgamation, the Company issued in the
aggregate 47,212,536 rights to Frontline's shareholders
(44,612,536 of which rights were attached to the Ordinary Shares
issued and 2,600,000 of which rights were attached to the
Ordinary Shares underlying the New Warrants issued). The rights
generally may not detach from the related Ordinary Shares. Each
right entitles the holder to purchase from the Company one-
quarter of an Ordinary Share at an initial purchase price of
$1.50. The rights will become exercisable and will detach from
the Ordinary Shares a specified period of time after any person
has become the beneficial owner of 20 per cent or more of the
Company's Ordinary Shares. The Plan was amended as of October 29,
1997 to provide that Frontline's purchase of Ordinary Shares
pursuant to its tender offer in connection with its acquisition
of LOF, would not result in the rights becoming exercisable.

If any person becomes the beneficial owner of 20 per cent or more
of the Company's Ordinary Shares, each right will entitle the
holder, other than the acquiring person, to purchase for the
purchase price, that number of Ordinary Shares having a market
value of eight times the purchase price.

If, following an acquisition of 20 per cent or more of the
Company's Ordinary Shares, the Company is involved in certain
amalgamations or other business combinations or sells or


                               46



<PAGE>

transfers more than 50% of its assets or earning power, each
right will entitle the holder to purchase for the purchase price
ordinary shares of the other party to the transaction having a
market value of up to eight times the purchase price.

The Company may redeem the rights at a price of $0.001 per right
at any time prior to a specified period of time after a person
has become the beneficial owner of 20 per cent or more of its
Ordinary Shares. The rights will expire on December 31, 2006,
unless earlier exchanged or redeemed.

In connection with the Company's one-for-ten reverse stock split,
the rights were adjusted pursuant to the Plan, so that there are
currently ten rights attached to each outstanding Ordinary Share.







































                               47



<PAGE>

                             PART IV

ITEM 17. FINANCIAL STATEMENTS.

Inapplicable.

ITEM 18. FINANCIAL STATEMENTS.

See the financial statements listed in Item 19 below and set
forth in pages F-1 through F-[XXX ].

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS.

The following documents are filed as a part of this Annual
Report:

a)  Financial Statements

                                                            Page

Financial Statements for Frontline Ltd.

Index to Consolidated Financial Statements                   F-1

Report of Independent Accountants                            F-2

Report of Independent Accountants                            F-3

Consolidated Statements of Operations for the years ended
December 31, 1999, 1998 and 1997                             F-4

Consolidated Balance Sheets as of
December 31, 1999 and 1998                                   F-5

Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997                             F-6

Consolidated Statements of Changes in
Stockholders' Equity for the years
ended December 31, 1999, 1998 and 1997                       F-7

Notes to Consolidated Financial Statements                   F-8

FINANCIAL STATEMENTS FOR ICB SHIPPING AB.

Index to Consolidated Financial Statements                  F-28

Report of Independent Accountants                           F-29





                               48



<PAGE>

Consolidated Statements of Operations for
the years ended December 31, 1998 and 1997                  F-30

Consolidated Balance Sheets as of
December 31, 1998 and 1997                                  F-31

Consolidated Statements of Changes in
Financial Position for the years ended
December 31, 1998 and 1997                                  F-32

Notes to Consolidated Financial Statements                  F-33

All financial statement schedules are omitted because of the
absence of conditions under which they are required or because
the required information is set forth in the Consolidated
Financial Statements and Notes thereto included herein.

b)  Exhibits

Exhibit
Number   Description of Exhibit

3.1      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").



























                               49



<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF FRONTLINE LTD.

Report of Independent Accountants

Report of Independent Accountants

Consolidated Statements of Operations for the years ended
December 31, 1999, 1998 and 1997

Consolidated Balance Sheets as of December 31, 1999 and 1998

Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997

Consolidated Statements Changes in Stockholders' Equity for the
years ended December 31, 1999, 1998 and 1997

Notes to Consolidated Financial Statements



































                               50



<PAGE>

Report of Independent Accountants


TO THE BOARD OF DIRECTORS
AND STOCKHOLDERS OF FRONTLINE LTD.


In our opinion, based on our audits and the report of other
auditors, the accompanying consolidated balance sheets and the
related consolidated statements of operations, cash flows and
changes in stockholders' equity present fairly, in all material
respects, the consolidated financial position of Frontline Ltd.
at December 31, 1999 and 1998, and the consolidated results of
its operations and its cash flows for each of the three years in
the period ended December 31, 1999 in conformity with generally
accepted accounting principles in the United States.  These
financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these
financial statements based on our audits.  We did not audit the
financial statements of ICB Shipping AB, the investment in which
is reflected in the financial statements referred to above on a
consolidated basis as of and for the year ended December 31, 1999
and using the equity method of accounting as of and for each of
the two years in the period ended December 31, 1998.  The
financial statements of ICB Shipping AB reflect total assets of
approximately $462.5 million as of December 31, 1999 and total
revenues of approximately $125.8 million for the year ended
December 31, 1999, in conformity with generally accepted
accounting principles in Sweden.  The Company's net investment in
ICB Shipping AB was approximately $196.4 million and $175.1
million at December 31, 1998 and 1997, respectively, and the
share in results from ICB Shipping AB for the years ended
December 31, 1998 and 1997 was approximately $14.2 million and
$20.0 million, respectively, in conformity with generally
accepted accounting principles in the United States.  Those
statements were audited by other auditors whose reports thereon
have been furnished to us.  We have audited adjustments necessary
to convert the 1999 ICB Shipping AB financial statements to
generally accepted accounting principles in the United States.
Our opinion expressed herein, insofar as it relates to the
amounts included for ICB Shipping AB, is based solely on the
reports of the other auditors and our audit of the adjustments
necessary for a presentation in accordance with generally
accepted accounting principles in the United States.  We
conducted our audits of these statements in accordance with
generally accepted auditing standards in the United States, which
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used


                               51



<PAGE>

and significant estimates made by management, and evaluating the
overall financial statement presentation.  We believe that our
audits and the reports of other auditors provide a reasonable
basis for the opinion expressed above.


PricewaterhouseCoopers DA


Oslo, Norway
June 28, 2000










































                               52



<PAGE>

Report of Independent Accountant


To the Board of Directors and Stockholders
ICB Shipping AB


We have audited the accompanying consolidated balance sheet of
ICB Shipping AB and subsidiaries as of December 31, 1999, and the
related consolidated statements of income and changes in
financial position for the year then ended.  These consolidated
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on the
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in Sweden that are substantially equivalent to
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of ICB Shipping AB and subsidiaries as of December 31,
1999 and the results of their operations and their changes in
financial position for the year then ended in conformity with
accounting principles generally accepted in Sweden.

Stockholm, Sweden
March 30, 2000.


Per Bergman
Authorized Public Accountant
KPMG











                               53



<PAGE>

Frontline Ltd.
Consolidated Statements of Operations for the years ended
December 31, 1999, 1998 and 1997
(in thousands of $, except per share data)

                                   1999    1998        1997
                                           (restated)  (restated)

Operating revenues
  Freight revenues               369,876     270,405     259,695
  Voyage expenses              (116,662)    (66,545)    (62,498)
-----------------------------------------------------------------

  Net operating revenues         253,214     203,860     197,197
-----------------------------------------------------------------
(Loss) gain on sale
  of vessels                    (37,779)     (1,514)           -
Operating expenses
  Ship operating expenses         92,708      55,586      48,076
  Charterhire expenses            31,719      14,889      25,734
  Administrative expenses         11,783       7,757      11,190
-----------------------------------------------------------------

Total operating expenses         136,210      78,232      85,000
-----------------------------------------------------------------
Net operating income before
  depreciation                    79,225     124,114     112,197
-----------------------------------------------------------------
  Depreciation and amortisation   91,435      51,659      56,721
-----------------------------------------------------------------
Net operating (loss) income
  after depreciation            (12,210)      72,455      55,476
Other income (expenses)
  Interest income                  7,561       2,998       3,126
  Interest expense              (88,728)    (59,320)    (45,945)
  Share in results from
  associated companies             3,067      12,985       9,997
  Other financial items            (840)       2,765         183
-----------------------------------------------------------------
  Net other expenses            (78,940)    (40,572)    (32,639)
-----------------------------------------------------------------
Net (loss) income before
  income taxes and
  minority interest             (91,150)      31,883      22,837
Minority interest                  4,245           -           -
Income taxes                         (9)          30          43







                               54



<PAGE>

Net (loss) income               (86,896)     31,8532       2,794
=================================================================
Earnings (loss) per share
  Basic and diluted              $(1.76)       $0.69       $0.63
=================================================================

See accompanying Notes that are an integral part of these
Consolidated Financial Statements













































                               55



<PAGE>

Frontline Ltd.
Consolidated Balance Sheets as of December 31, 1999 and 1998
(in thousands of $)

                                         1999         1998
                                                      (restated)
ASSETS
Current Assets
  Cash and cash equivalents              65,467         74,034
  Restricted cash                           800          1,916
  Marketable securities                  10,867              -
  Trade accounts receivable              12,528          7,683
  Other receivables                      15,765          5,545
  Inventories                            14,280          6,813
  Voyages in progress                    14,412          8,844
  Prepaid expenses and
  accrued income                          3,628          1,554
-----------------------------------------------------------------
  Total current assets                  137,747        106,389
Newbuildings                             32,777         75,681
Vessels and equipment, net            1,523,112      1,078,956
Investment in associated
  companies                              16,274        239,887
Deferred charges                          4,680          4,501
Goodwill                                 12,203              -
-----------------------------------------------------------------
Total assets                          1,726,793      1,505,414
=================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Short-term debt and current
  portion of long-term debt             116,814        170,551
  Trade accounts payable                  8,001          7,724
  Accrued expenses                       37,880         18,414
  Deferred charter revenue                    -             81
  Provisions for drydocking               6,517          1,733
----------------------------------------------------------------
  Total current liabilities             169,212        198,503
Long-term liabilities
  Long-term debt                        962,880        712,470
  Provisions for drydocking              16,562          9,615
  Other long-term liabilities             1,888          1,252
----------------------------------------------------------------
  Total liabilities                   1,150,542        921,840
Commitments and contingencies
Minority interest                        18,951              -
Stockholders' equity
  Share capital                         152,405        115,267
  Additional paid in capital            462,474        435,932
  Warrants and options                    9,333          9,333



                               56



<PAGE>

  Accumulated other comprehensive
  income                                (6,603)        (3,545)
  Retained earnings
  (accumulated deficit)                (60,309)         26,587
----------------------------------------------------------------
  Total stockholders' equity            557,300        583,574
----------------------------------------------------------------
Total liabilities and
  stockholders' equity                1,726,793      1,505,414
================================================================

See accompanying Notes that are an integral part of these
Consolidated Financial Statements








































                               57



<PAGE>

Frontline Ltd.
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
(in thousands of $)
                                   1999    1998        1997
                                           (restated)  (restated)
Operating activities
Net (loss) income               (86,896)      31,853      22,794
Adjustments to reconcile net
 (loss) income to net cashp
 rovided by operating activities:
  Depreciation and amortisation   91,435      51,659      56,721
  Amortisation of deferred charges 2,922       3,021         247
  Loss (gain) from sale of
   vessels                        37,779       1,514       (985)
  Gain on sale of marketable
   securities                      (580)       (389)       (894)
  Loss on repurchase of
   outstanding debentures              -           -         723
  Share in results from associated   companies(3,067)   (12,985)
  (9,997)
  Other, net                                   2,532         972
  Changes in operating assets
   and liabilities:
  Trade accounts receivable      (2,676)     (2,710)       2,235
  Other receivables                1,521       1,089     (1,829)
  Inventories                    (4,915)     (1,351)       1,228
  Voyages in progress            (1,153)       1,072       (115)
  Prepaid expenses and
   accrued income                  2,049       5,208     (3,094)
  Trade accounts payable         (1,824)       1,513       1,458
  Accrued expenses                 2,805     (5,001)     (1,383)
  Provisions for drydocking        7,158       2,408     (1,835)
  Other, net                       1,928     (4,777)       1,203
----------------------------------------------------------------
  Net cash provided by
   operating activities           46,486      69,592      67,449
----------------------------------------------------------------
Investing activities
  Maturity (placement) of
   restricted cash                 1,116     (1,916)           -
  Additions to newbuildings,
   vessels and equipment       (200,736)   (352,003)    (51,772)
  Proceeds from sale of vessels
   and equipment                 239,043     211,954      50,610
  Acquisition of businesses
   (net of cash acquired)        126,000           -    (69,646)
  Purchase of goodwill           (6,091)           -           -





                               58



<PAGE>

  Investment in associated
   companies                       4,210    (10,430)   (220,592)
  Dividends received from
   associated companies            3,246       8,048       4,424
  Proceeds from sales of
   marketable securities           2,653         392       3,677
----------------------------------------------------------------
  Net cash provided by (used in)
   investing activities          175,532   (143,955)   (283,299)
----------------------------------------------------------------
Financing activities
  Proceeds from long-term debt   505,875     327,849     257,784
  Repayments of long-term debt
   and debentures              (679,210)   (265,211)   (176,700)
  Debt fees paid                 (3,068)     (1,113)     (1,862)
  Cash dividends paid            (4,714)           -           -
  Purchase of minority
   interest                    (104,148)           -           -
  Proceeds from issuance of
   equity                         54,680           2     165,495
----------------------------------------------------------------
  Net cash (used in) provided
   by financing activities     (230,585)      61,527     244,717
----------------------------------------------------------------
Net (decrease) increase in
 cash and cash equivalents       (8,567)    (12,836)      28,867
Cash and cash equivalents at
 beginning of year                74,034      86,870      58,003
Cash and cash equivalents at
 end of year                      65,467      74,034      86,870
================================================================
Supplemental disclosure of cash
 flow information:
  Interest paid, net of
   capitalised interest           94,633      60,944      40,834
  Income taxes paid                    -          31          15
================================================================

See accompanying Notes that are an integral part of these
Consolidated Financial Statements













                               59



<PAGE>

Frontline Ltd.
Consolidated Statements of Changes in Stockholders' Equity for
the years ended
December 31, 1999, 1998 and 1997
(in thousands of $, except number of shares)

                                   1999    1998        1997
                                           (restated)  (restated)
NUMBER OF SHARES OUTSTANDING
Balance at beginning of year  46,105,860  46,105,860  32,161,955
Shares in Frontline AB
 not exchanged                         -           -   (113,894)
LOF minority shares                    -           -   1,493,324
Shares issued and options/
 warrants exercised           14,855,000       1,000  12,564,475
----------------------------------------------------------------
Balance at end of year        60,961,860  46,106,860  46,105,860
----------------------------------------------------------------

SHARE CAPITAL
Balance at beginning of year     115,267     115,265      80,405
Shares in Frontline AB not
 exchanged                             -           -       (285)
LOF minority shares                    -           -       3,734
Shares issued and options/
 warrants exercised               37,138           2      31,411
----------------------------------------------------------------
Balance at end of year           152,405     115,267     115,265
----------------------------------------------------------------

ADDITIONAL PAID IN CAPITAL
Balance at beginning of year     435,932     435,932     275,331
Shares issued and options/
 warrants exercised               26,542           -     148,262
LOF minority shares--20,025
Warrants issued on Amalgamation        -           -     (7,686)
----------------------------------------------------------------
Balance at end of year           462,474     435,932     435,932
----------------------------------------------------------------

WARRANTS AND OPTIONS
Balance at beginning of year       9,333       9,333           -
Options and warrants assumed on
  Amalgamation                         -           -       1,647
Warrants issued on Amalgamation        -           -       7,686
----------------------------------------------------------------
Balance at end of year             9,333       9,333       9,333
----------------------------------------------------------------





                               60



<PAGE>

ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance at beginning of year     (3,545)         746          24
Other comprehensive income       (3,058)     (4,291)         722
----------------------------------------------------------------
Balance at end of year           (6,603)     (3,545)         746
----------------------------------------------------------------

RETAINED EARNINGS (ACCUMULATED DEFICIT)
Balance at beginning of year      26,587     (5,266)    (28,060)
Net (loss) income               (86,896)      31,853      22,794
----------------------------------------------------------------
Balance at end of year          (60,309)      26,587     (5,266)
----------------------------------------------------------------
Total Stockholders' Equity       557,300     583,574     555,450
----------------------------------------------------------------

COMPREHENSIVE INCOME
Net (loss) income               (86,896)      31,853      22,794
Unrealised holding (losses)
 gains                           (2,843)           -         162
Unrealised holding (losses)
 gains in associated companies         -     (3,013)         621
Foreign currency translation       (215)     (1,278)        (61)
----------------------------------------------------------------
Other comprehensive income       (3,058)     (4,291)         722
----------------------------------------------------------------
Comprehensive income            (89,954)      28,122      22,956
----------------------------------------------------------------

See accompanying Notes that are an integral part of these
Consolidated Financial Statements






















                               61



<PAGE>

1.  GENERAL

    Frontline Ltd. (the "Company") is a holding company for
    investments in a number of subsidiaries engaged primarily in
    the ownership and operation of oil tankers and oil/bulk/ore
    ("OBO") carriers. The Company operates vessels 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 160,000 dwt. The Company operates
    through subsidiaries and partnerships located in Bermuda,
    Liberia, Norway, Panama, Singapore and Sweden. The Company is
    also involved in the charter, purchase and sale of vessels.

    Frontline Ltd. (formerly London & Overseas Freighters Limited
    ("LOF") originally commenced operations in 1948 as a U.K.
    company ("LOF plc") and was listed on the London Stock
    Exchange in 1950. The Company was incorporated under the laws
    of Bermuda on June 12, 1992 for the purpose of succeeding to
    the business of LOF plc. In November 1993, the shares of LOF
    were listed on the Nasdaq National Market in the form of
    American Depositary Shares ("ADSs"), each ADS representing
    ten LOF shares. On May 11, 1998, LOF completed a business
    combination, as described below, with another Bermuda
    company, Frontline Ltd. ("Frontline"). LOF, the surviving
    entity, was renamed Frontline Ltd. effective from that date.
    Frontline commenced operations in 1985 as a Swedish company
    listed on the Stockholm Stock Exchange in 1989 ("Frontline
    AB"). Frontline was incorporated under the laws of Bermuda on
    April 29, 1997 for the purpose of succeeding to the business
    of Frontline AB and, commencing in June 1997, the shares in
    Frontline AB were exchanged for shares in Frontline. The
    ordinary shares of Frontline were thereafter listed on the
    Oslo Stock Exchange and delisted from the Stockholm Stock
    Exchange.

    BUSINESS COMBINATIONS AND ACQUISITIONS

    LONDON & OVERSEAS FREIGHTERS LIMITED

    On September 22, 1997, LOF announced that it had entered into
    an Agreement and Plan of Amalgamation (the "Amalgamation
    Agreement") with Frontline, providing for a business
    combination in a three-step transaction. On September 29,
    1997, pursuant to the Amalgamation Agreement, Frontline
    commenced a cash tender offer (the "Offer") for at least 50.1
    per cent and up to 90 per cent of the outstanding LOF
    ordinary shares and American Depositary Shares ("ADSs") for a
    price of $1.591 per ordinary share (or $15.91 per ADS). The
    Offer expired on October 28, 1997 and effective November 1,
    1997 Frontline had acquired approximately 79.74 per cent of
    the outstanding LOF ordinary shares. (see Note 21).


                               62



<PAGE>

    In the second step, which was completed on May 11, 1998,
    Frontline amalgamated (the "Amalgamation") with Dolphin
    Limited, a Bermuda subsidiary of LOF. Each ordinary share of
    Frontline was cancelled in consideration for which the
    stockholders of Frontline received (i) 3.2635 (restated to
    0.32635) ordinary shares of LOF and (ii) 0.1902 (restated to
    0.01902) of a newly issued warrant ("Frontline Warrants") to
    purchase one LOF ordinary share.

    In the third step of the combination, in order to combine the
    assets and liabilities, LOF purchased the assets and
    liabilities of Frontline which were vested in the amalgamated
    company at fair market value in exchange for a promissory
    note. LOF is the legally surviving entity in this business
    combination and has been renamed Frontline Ltd. with effect
    from May 11, 1998. Frontline is treated as the accounting
    acquirer and the transaction treated as a reverse
    acquisition. For the purposes of these financial statements,
    the Amalgamation has been recorded with effect from November
    1, 1997 and the results of LOF have been consolidated from
    that date. The share capital of the Company has been restated
    accordingly to reflect the transaction. For periods on or
    after May 11, 1998, the term Company refers to Frontline Ltd.
    (formerly London & Overseas Freighters Limited).





























                               63



<PAGE>

    ICB SHIPPING AB (PUBL)

    On September 1, 1997, Frontline announced its intention to
    submit an offer to acquire all of the shares of ICB Shipping
    AB (publ) ("ICB"). The final form of the offer was an offer
    to acquire all of the shares of ICB (the "ICB Shares") in
    exchange for SEK 130 in cash for each of the A-shares and SEK
    115 in cash for each of the B-shares. The total acquisition
    price was estimated to be $423 million, financed primarily by
    a US $300 million loan facility ("ICB facility") with Chase
    Manhattan Bank ("Chase"). Through the tender offer, by
    October 1997 Frontline acquired 51.7 per cent of the
    outstanding shares of ICB at a purchase price of
    approximately $215 million. However, the shares purchased,
    14,428,078 Class B shares and 148,663 Class A shares,
    provided Frontline with only 31.4 per cent of the ICB voting
    rights. On January 8, 1998, Frontline withdrew its bid for
    the remaining outstanding shares of ICB. During 1998,
    Frontline made further purchases of ICB Shares in the market
    and at December 31, 1998 had 34.2 per cent of the voting
    power.

    On September 23, 1999, pursuant to an agreement (the "ICB
    Agreement"), Frontline acquired ICB Shares previously owned
    by the so-called "A group" consortium including those
    controlled by board members of ICB and ICB shares controlled
    by the Angelicoussis family. In connection with the ICB
    Agreement, four of the VLCCs owned by ICB, were sold to a
    companies controlled by the Angelicoussis family. As a result
    of the acquisitions, Frontline increased its shareholding in
    ICB to approximately 90 per cent of the capital and 93 per
    cent of the voting rights. In October 1999, a new Board of
    Directors was appointed in ICB and is consequently controlled
    by Frontline. In December 1999, Frontline commenced a
    compulsory acquisition for the remaining shares in ICB and
    ICB was delisted from the Stockholm Stock Exchange.

    In the two year period prior to September 1999, Frontline was
    unable to control, or exercise significant influence over,
    ICB. Accordingly, the Company previously accounted for its
    investment in ICB as an available-for-sale security in
    accordance with SFAS 115. As a result of Frontline acquiring
    control over ICB, the Company's financial statements have
    been restated. For the years ended December 31, 1997 and
    1998, the investment in ICB is accounted for in accordance
    with the equity method.  As a result, net income increased by
    $5.4 million and $4.9 million from amounts previously
    reported for the years ended December 31, 1997 and 1998,
    respectively.




                               64



<PAGE>

    For the year ended December 31, 1999, ICB has been
    consolidated with effect from January 1, 1999.  In connection
    with the ICB Agreement, four of the VLCCs owned by ICB, were
    sold to a companies controlled by the Angelicoussis family.
    This sale has resulted in Frontline recognizing a loss on
    sale of vessels of $37.9 million in its consolidated
    statement of operations for the year ended December 31, 1999.
    Twenty employees of ICB have been made redundant as the
    result of the acquisition by Frontline and severance costs of
    approximately $1.4 million have been incurred in the year
    ended December 31, 1999. These costs are included in the
    determination of the purchase price of ICB.

2.  ACCOUNTING POLICIES

    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. Investments in companies in which the Company
    directly or indirectly holds more than 50 per cent of the
    voting control are consolidated. For the year ended December
    1, 1999, ICB has been consolidated with effect from January
    1, 1999. All intercompany balances and transactions have been
    eliminated on consolidation.

    Investments in companies in which the Company holds between
    20 per cent and 50 per cent of an ownership interest, and
    over which the Company exercises significant influence, are
    accounted for using the equity method. The Company's
    financial statements have been restated for the years ended
    December 31, 1997 and 1998 to reflect the application of the
    equity method for the investment in ICB. The investment in
    ICB was previously accounted for as an available-for-sale
    security in accordance with SFAS 115 prior to this
    restatement (see Note 1). The Company records its investments
    in equity-method investees on the consolidated balance sheets
    as "Investment in associated companies" and its share of the
    investees' earnings or losses in the consolidated statements
    of operations as "Share in results from associated
    companies". The excess of the purchase price over the book
    value basis of the Company's investment in an equity method
    investee is included in the accompanying consolidated balance
    sheets in "Investment in associated companies". This goodwill
    or fair value adjustment is being amortised over a period of
    approximately 17 years in the accompanying consolidated
    statements of operations in "Share of results from associated
    companies.



                               65



<PAGE>

    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.

    Certain of the comparative figures have been reclassified to
    conform with the presentation adopted in the current period.

    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.

    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, which comprise principally of fuel and
    lubricating oils, are stated at the lower of cost and market
    value. Cost is determined on a first-in, first-out basis.

    VESSELS AND EQUIPMENT

    The cost of the vessels less estimated residual value is
    depreciated on a straight-line basis over the vessels'
    remaining economic useful lives. In the fourth quarter of
    1997, management determined that the useful life of its
    vessels was 25 years rather than 20 years from date of
    construction, as previously estimated. A change in accounting
    estimate was recognised to reflect this decision, resulting
    in a decrease in depreciation expense and consequently
    increasing net income by $3.6 million and basic and diluted
    earnings per share by $0.01, for 1997. Other equipment is
    depreciated over its estimated residual life, which
    approximates five years.

    The vessels obtained through the acquisition of ICB have been
    depreciated on a straight-line basis over the vessels'


                               66



<PAGE>

    remaining economic useful lives, which was determined to be
    20 years. In the fourth quarter of 1999, management
    determined that the useful life of these vessels was 25 years
    rather than 20 years, as previously estimated. A change in
    accounting estimate was recognised to reflect this decision,
    resulting in a decrease in depreciation expense and
    consequently increasing net income by $1.8 million and basic
    and diluted earnings per share by $0.04, for 1999.

    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 loan interest and associated finance costs.
    No charge for depreciation is made until the vessel is put
    into operation.

    Impairment of long-lived assets

    Long-lived assets that are held and used by the Company are
    reviewed for impairment whenever events or changes in
    circumstances indicate that the carrying amount of an asset
    may not be recoverable. 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 deferred 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
    statement of operations. Amortisation of loan costs is
    included in interest expense.

    REVENUE AND EXPENSE RECOGNITION

    Revenues and expenses are recognised on the accrual basis.
    Revenues are generated from freight billings and time charter
    hires. The operating results of voyages in progress are
    estimated and recorded pro-rata on a per day basis in the
    consolidated statements of operations. Probable losses on
    voyages are provided for in full at the time such losses can
    be estimated. Time charter revenues are recorded over the
    term of the time charter as service is provided.

    DRYDOCKING PROVISIONS

    Normal vessel repair and maintenance costs are charged to
    expense when incurred. Provisions for future drydocking costs
    are accrued and charged to expense on a pro-rata basis over


                               67



<PAGE>

    the period to the next drydocking. Such provisions are based
    on estimates made by management of expected cost and length
    of time between drydockings.

    GOODWILL

    Goodwill represents the excess of the purchase price over the
    fair value of assets acquired in business acquisitions
    accounted for under the purchase method. Goodwill is
    presented net of accumulated amortisation and is being
    amortised over a period of approximately 17 years.

    DERIVATIVES

    The Company enters into interest rate swap transactions from
    time to time 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.
    Hedge accounting is used to account for these swaps provided
    certain hedging criteria are met. The differential between
    the derivative and the underlying hedged item is accrued as
    interest rates change and recognised as an adjustment to
    interest expense. The related amount receivable from or
    payable to counterparties is included in accrued interest
    income or expense, respectively. The fair values of the
    interest rate swaps are not recognised in the financial
    statements.

    Hedge accounting is applied where the derivative reduces the
    risk of the underlying hedged item and is designated at
    inception as a hedge with respect to the hedged item.
    Additionally, the derivative must result in payoffs that are
    expected to be inversely correlated to those of the hedged
    item. Derivatives are measured for effectiveness both at
    inception and on an ongoing basis.

    If a derivative ceases to meet the criteria for hedge
    accounting, any subsequent gains and losses are currently
    recognised in income. If a hedging instrument is sold or
    terminated prior to maturity, gains and losses continue to be
    deferred until the hedged instrument is recognised in income.
    Accordingly, should a swap be terminated while the underlying
    debt remains outstanding, the gain or loss is adjusted to the
    basis of the underlying debt and amortised over its remaining
    useful life.

    The Company has entered into forward freight contracts in
    order to hedge exposure to the spot market for certain trade
    routes. These transactions involve entering into a contract
    to provide a theoretical voyage at an agreed rate. The fair


                               68



<PAGE>

    values of the forward freight contracts are recognised in the
    financial statements.

    Other than the forward freight contracts discussed above, the
    Company has not entered into any derivative contracts for
    speculative or trading purposes.

    FOREIGN CURRENCIES

    The Company's functional currency is the U.S. dollar as all
    revenues are received in U.S. dollars and a majority of the
    Company's expenditures are made in U.S. dollars. The Company
    reports in U.S. dollars. Most of the Company's subsidiaries
    report in 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 translation
    gains or losses are included in the consolidated statements
    of operations.

    STOCK-BASED COMPENSATION

    Under Statement of Financial Accounting Standards No. 123
    ("SFAS 123"), "Accounting for Stock-Based Compensation",
    disclosures of stock-based compensation arrangements with
    employees are required and companies are encouraged, but not
    required, to record compensation costs associated with
    employee stock option awards, based on estimated fair values
    at the grant dates. The Company has chosen to continue to
    account for stock-based compensation using the intrinsic
    value method prescribed in Accounting Principles Board
    Opinion No. 25 ("APB 25") "Accounting for Stock Issued to
    Employees" and has disclosed the required pro forma effect on
    net income and earning per share as if the fair value method
    of accounting as prescribed in SFAS 123 had been applied.






                               69



<PAGE>

    EARNINGS PER SHARE

    Basic EPS is computed based on the income (loss) 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
    (see Note 5).

    COMPREHENSIVE INCOME

    Comprehensive income is defined as the change in equity of a
    business enterprise during a period from transactions and
    other events and circumstances from nonowner sources. It
    includes all changes in equity during a period except those
    resulting from investments by owners and distributions to
    owners. (See Statement of Changes in Stockholders' Equity).

3.  ADOPTION OF NEW ACCOUNTING STANDARDS

    SFAS No. 133, "Accounting for Derivatives and Hedging
    Activities", is effective from January 1, 2001 for the
    Company and requires that all derivative instruments be
    recorded on the balance sheet at their fair value. Changes in
    the fair value of derivatives are recorded each period in
    current earnings or other comprehensive income, depending on
    whether a derivative is designated as part of a hedge
    transaction and, if it is, the type of hedge transaction. The
    Company is assessing the impact that the adoption of SFAS No.
    133 will have on the Company's consolidated financial
    statements.

4.  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


                               70



<PAGE>

    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 Norway, Singapore
    and Sweden are subject to taxation in their respective
    jurisdictions. The tax paid by subsidiaries of the Company
    which are subject to taxation is not material.

    The tax charge for the year comprises:

    (in thousands of $)             1999        1998        1997
    Current tax                      (9)          30          43
    Deferred tax                       -           -           -
    -------------------------------------------------------------
                                     (9)          30          43
    =============================================================

    Temporary differences and carryforwards which give rise to
    deferred tax assets, liabilities and related valuation
    allowances are as follows:

    (in thousands of $)                         1998        1998
                                                      (restated)
    Deferred tax liability - current               -           -

    Deferred tax liability
     - non current                                 -           -

    Deferred tax asset - current
    Accrued liabilities                            -           -
    Convertible debenture                                    191
    Deferred tax asset - non current
    Pension liabilities                           22          13
    Tax loss carryforwards17,4964,321
    Valuation allowance(17,518)(4,525)
    -------------------------------------------------------------
    Net deferred tax asset (liability)-            -
    =============================================================

    As of December 31, 1999, 1998 and 1997, the Company had $62,
    485,000 $15,431,000 and $46,993,000 of net operating loss
    carryforwards, respectively. The loss carryforward can be
    utilised only against future taxable income for the
    respective subsidiary. Frontline AB and ICB account for a
    total of $14,433,000 and $47,765,000 as of December 31, 1999,
    respectively. These net operating losses do not have an
    expiration date. The Company's deferred tax assets are
    reduced by a valuation allowance when, in the opinion of
    management, it is more likely than not that some portion or



                               71



<PAGE>

    all of the deferred tax assets will not be realised in the
    future.

5.  EARNINGS PER SHARE

    The computation of basic 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 and warrants using the treasury stock method
    (see Note 18). Earnings per share, for the years ended
    December 31, 1997 and 1998 have been restated to reflect the
    change in the accounting treatment of the investment in ICB
    (see Note 1).

    The components of the numerator for the calculation of basic
    EPS and diluted EPS are as follows:

    (in thousands of $)             1999        1998        1997
                                          (restated)  (restated)
    Net income (loss) available
     to stockholders            (86,896)      31,853      22,794
    =============================================================

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

    (in thousands)                  1999        1998        1997
    Basic earnings per share:
    Weighted average number of
     ordinary shares outstanding  49,468      46,107      36,189
    =============================================================

    Diluted earnings per share:
    Weighted average number of
     ordinary shares outstanding  49,468      46,107      36,819
    Warrants and stock options         -          30          84
    -------------------------------------------------------------
                                  49,468      46,137      36,273
    =============================================================

6.  LEASES

    Rental expense

    Charter hire payments to third parties for 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:



                               72



<PAGE>

    Year ending December 31,
    (in thousands of $)
    2000                                                  33,560
    2001                                                  33,517
    2002                                                  33,517
    2003                                                  24,559
    2004                                                  24,361
    2005 and later                                        54,845
    -------------------------------------------------------------
    Total minimum lease payments204,359
    =============================================================

    Total rental expense for operating leases was $31,912,000,
    $15,403,000 and $26,323,000 for the years ended December 31,
    1999, 1998 and 1997, respectively.

    Rental income
    The minimum future revenues to be received on time charters
    and other contractually committed income as of December 31,
    1999 are as follows:

    Year ending December 31,
    (in thousands of $)
    2000                                                  25,675
    200                                                   18,879
    2002                                                       -
    2003                                                       -
    2004                                                       -
    2005 and later                                             -
    -------------------------------------------------------------
    Total minimum lease revenues                          34,554
    -------------------------------------------------------------

    The cost and accumulated depreciation of the vessels leased
    to a third party at December 31, 1999 were approximately
    $86.7 million and $36.5 million, respectively, and at
    December 31, 1998 were approximately $54.3 million and $18.7
    million, respectively.

    In addition to the minimum lease revenues disclosed above,
    the Company has a one year market related timecharter with BP
    Amoco plc ("BP") for one of the Company's VLCCs.











                               73



<PAGE>

7.  MARKETABLE SECURITIES

    Marketable securities held by the Company are equity
    securities considered to be available-for-sale securities.

    (in thousands of $)                         1999        1998
                                          (restated)
    Cost                                      13,710           -
    Gross unrealised gain                          -           -
    Gross unrealised loss                    (2,843)           -
    -------------------------------------------------------------
    Fair value                                10,867           -
    =============================================================

    The unrealised loss on marketable securities, including a
    component of foreign currency translation, included in
    comprehensive income increased by $2,843,000 for the year
    ended December 31, 1999 (1998 - $nil).

8.  TRADE ACCOUNTS RECEIVABLE

    Trade accounts receivable are presented net of allowances for
    doubtful accounts amounting to $500,000 for each of the years
    ended December 31, 1999 and 1998.

9.  OTHER RECEIVABLES

    (in thousands of $)                         1999        1998
    Agent receivables                          9,575       3,661
    Other receivables                          6,190       1,884
    -------------------------------------------------------------
                                              15,765       5,545
    =============================================================

    Other receivables are presented net of allowances for
    doubtful accounts amounting to $nil for each of the years
    ended December 31, 1999 and 1998.

10. VESSELS AND EQUIPMENT

    (in thousands of $)                         1999        1998
    Cost                                   1,861,004   1,336,307
    Accumulated depreciation               (337,892)   (257,351)
    -------------------------------------------------------------
    Net book value at end of year          1,523,112   1,078,956
    -------------------------------------------------------------

    Included in the above amounts as at December 31, 1999 and
    1998 is equipment with a net book value of $561,000 and
    $594,000, respectively. Interest capitalised in the cost of



                               74



<PAGE>

    newbuildings amounted to $3,163,000 and $8,332,000 in 1999
    and 1998, respectively.

11. INVESTMENT IN ASSOCIATED COMPANIES

    At December 31, 1999, the Company has the following
    participation in investments that are recorded using the
    equity method:

                                                      Percentage
    K/S Rasmussen Teamship A/S II                            40%
    K/S Rasmussen Teamship A/S III                           35%
    Floating Storage Inc. SA                                 50%
    Alliance Chartering LLC                                  50%

    At December 31, 1998 and 1997, the investment in ICB has been
    included in the restated consolidated financial statements of
    Frontline as an investment in associated companies.

    Summarised balance sheet information of the Company's equity
    method investees is as follows:

    (in thousands of $)                         1999        1998
    Current assets                            24,164     157,842
    Noncurrent assets                         86,213     588,887
    Current liabilities                       29,587      58,422
    Non current liabilities                   57,824     336,000

    Summarised statement of operations information of the
    Company's equity method investees is as follows:

    (in thousands )                 1999        1998        1997
    Net operating revenues        14,432      50,100      56,491
    Net operating income           9,846      43,934      50,539
    Net income                     8,686      28,244      48,983

12. DEFERRED CHARGES

    Deferred charges represent debt arrangement fees that are
    capitalised and amortised on a straight-line basis to
    interest expense over the life of the debt instrument. The
    deferred charges are comprised of the following amounts:

    (in thousands of $)                         1999        1998
    Debt arrangement fees                     10,810       7,781
    Accumulated amortisation                 (6,130)     (3,208)
    -------------------------------------------------------------
                                               4,680       4,501
    =============================================================




                               75



<PAGE>

13. GOODWILL

    Goodwill is stated net of related accumulated amortisation as
    follows:

    (in thousands of $)                         1999        1998
    Goodwill                                  12,737           -
    Accumulated amortisation                   (534)           -
    -------------------------------------------------------------
                                              12,203           -
    =============================================================

14. ACCRUED EXPENSES

    (in thousands of $)                         1999        1998
    Voyage expenses                           10,947       4,232
    Ship operating expenses                   12,046       6,679
    Administrative expenses                    1,430         685
    Interest expense                          11,054       5,298
    Taxes                                        565          15
    Other                                      1,838       1,505
    -------------------------------------------------------------
                                              37,880      18,414
================================================================

15. DEBT

    (in thousands of $)                         1999        1998
    Floating rate debt
     (LIBOR + 0.70% to 3.50%)
     due through 2009                        904,464     840,658
    Fixed rate debt 6.75% to
     8.00% due through 2002                  168,510      18,833
                                         ----------- -----------
                                           1,072,974     859,491
    Convertible debenture loan
     and credit facilities                     6,720      23,530
    -------------------------------------------------------------
    Total debt                             1,079,694     883,021
    -------------------------------------------------------------
    Less: short-term and current
     portion of long-term debt             (116,814)   (170,551)
    -------------------------------------------------------------
                                             962,880     712,470
    =============================================================

    The outstanding debt as of December 31, 1999 is repayable as
    follows:





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<PAGE>

    Year ending December 31,
    (in thousands of $)
    2000                                                 116,814
    2001                                                 133,716
    2002                                                 191,762
    2003                                                 254,706
    2004                                                  72,469
    2005 and later                                       310,227
    -------------------------------------------------------------
    Total debt                                         1,079,694
    =============================================================

    The weighted average interest rate for debt all of which is
    denominated in US dollars, as of December 31, 1999 was 7.17
    per cent (1998 - 7.2 per cent).

    Included in long-term debt is an amount of $40 million which
    is due to be refinaced in February 2000. However, the Company
    had obtained committed long-term refinancing of this amount
    at December 31, 1999.

    Certain of the fixed rate debt and the floating rate debt are
    secured by ship mortgages and, in the case of some debt,
    pledges of shares by each guarantor subsidiary. Various debt
    agreements of the Company contain certain covenants, which
    among other things limit the payment of dividend and require
    compliance with certain financial ratios. Such ratios include
    equity ratio covenants, minimum value clauses, and minimum
    free cash restrictions. As of December 31, 1999, the Company
    complied with the debt covenants of its various debt
    agreements.

    Metrogas Holdings ("Metrogas"), a company related to the
    Company's Chairman, had outstanding as of December 31, 1999 a
    specific loan of $54.0 million (1998 - $89.0 million) (the
    "Metrogas Loan") provided to the Company. The Metrogas Loan
    was converted to a separate long-term financing facility
    during 1999, as described below.

    As of December 31, 1998, the Company did not comply with the
    equity ratio covenants in a number of the loan agreements.
    During 1999, management initiated discussions with the
    Company's lending banks with the purpose of lowering the
    breached covenant requirements in such loan agreements at
    least until January 1, 2001. The requested changes were made
    with the intention of making the Company's financing
    arrangements more flexible in the event of a prolonged
    negative market scenario, including falling second-hand
    prices. Included in the request for changes was a proposal to
    subordinate the $89.0 million loan Metrogas Loan to loans
    given by the Company's lending banks. In addition, the


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<PAGE>

    proposal included reclassifying the Metrogas Loan as equity
    for the purposes of calculating the Company's equity ratio.

    As of July 13, 1999, the discussions with Metrogas and the
    Company's lending banks were finalised and the Company and
    Metrogas signed a Subordinated Convertible Loan Facility
    Agreement. Accordingly, the Company has received acceptance
    of reduced covenant levels from all but one of the Company's
    19 lending banks. This one bank, however, is subject to the
    authority of the majority lenders, who have agreed to accept
    lower covenant levels until January 1, 2001. The
    aforementioned bank has since been replaced.

    The number of outstanding convertible debenture share
    certificates ("Debentures") in the Company's subsidiary,
    Frontline AB, amounted to nil and 2,654,540 as of December
    31, 1999 and 1998, respectively. The face value of each
    certificate is SEK 10. The conversion period was from June
    25, 1992 to July 30, 1999 and all outstanding debentures were
    repaid on loan maturity on August 24, 1999. The Debentures
    were convertible into shares at a conversion price of SEK 35
    per share. Annual interest of 9 per cent was payable annually
    on June 24 and on the maturity date. During 1997, Frontline
    acquired Debentures with a face value of SEK 182,655,574, and
    at December 31, 1997 held Debentures with a face value of SEK
    183,810,574. Frontline paid approximately $24 million for the
    repurchase of Debentures and recorded a loss of approximately
    $0.7 million. Frontline acquired further Debentures with face
    value SEK 666,048 in 1998 and recorded a gain (loss) of $nil.
    In June 1998, convertible debentures held by the Company with
    face value SEK 184,462,124 were cancelled.

16. SHARE CAPITAL

    The issued and fully paid share capital of the Company has
    been restated for all periods presented to reflect the
    Amalgamation as described in Note 1 and the reverse stock
    split described below.

    Authorised share capital:

    (in thousands of $)                         1999        1998
    100,000,000 ordinary shares
     of $2.50 each               250,000     250,000
    =============================================================

    Issued and fully paid share capital:

    (in thousands of $, except share numbers)   1999        1998




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<PAGE>

    60,961,860 ordinary shares of $2.50 each
     (1998 - 46,106,860)                     152,405     115,267
    =============================================================

    The Company's ordinary shares are listed on the Oslo Stock
    Exchange and the London Stock Exchange. The Company's
    ordinary shares trade on the Nasdaq National Market in the
    form of ADSs. Each ADS represents one ordinary share.

    Of the authorised and unissued ordinary shares, 124,558 are
    reserved for issue pursuant to subscription under warrants
    which can be exercised at any time up to December 31, 2003,
    2,600,000 are reserved for issue pursuant to subscription
    under warrants which can be exercised at any time up to May
    11, 2001 and 415,000 are reserved for issue pursuant to
    subscription under options granted under the Company's share
    option plans. As at December 31, 1999, except for the shares
    which would be issued on the exercise of the warrants and the
    options, and the shares under option as described below, no
    unissued share capital of the Company is under option or is
    conditionally or unconditionally to be put under option.

    On December 20, 1999 the Company issued 1,910,000 ordinary
    shares at a price of NOK 37.00 per share in connection with
    the acquisition of a Suezmax newbuilding. Frontline has a one
    year call option to buy back 430,000 of these shares for NOK
    37.00 per share plus 10 per cent interest per annum
    compensation.

    On September 30, 1999, the Company issued 4,715,000 ordinary
    shares in a private placement with five financial
    institutions at NOK 33.00 per share (with gross proceeds of
    approximately $20 million) to strengthen the equity base of
    the Company. Also on September 30, 1999, $35 million of the
    $89 million Metrogas subordinated loan facility was converted
    to equity by the issuance of 8,230,000 shares at an issue
    price of NOK 33.00 per share. In connection with this
    conversion, Metrogas offered $15 million of the resulting
    ordinary shares to existing Frontline shareholders and
    warrant holders, excluding US persons.

    On October 19, 1998, at the Annual General Meeting of the
    Company, the stockholders approved a share consolidation of
    ten shares of $0.25 par value each to one share of $2.50 par
    value each. This reverse stock split was effective October
    26, 1998. The number of shares authorised, issued and
    outstanding, earnings per share and share options and
    warrants disclosed have been restated for all periods
    presented accordingly.




                               79



<PAGE>

    In connection with the Amalgamation, at a shareholder meeting
    on May 11, 1998 an increase in the authorised share capital
    of the Company to $250,000,000, divided into 100,000,000
    ordinary shares of $2.50 each, was approved. On May 11, 1998,
    the Company issued 44,612,536 shares pursuant to the
    Amalgamation described in Note 1.

    On December 6, 1996, the Company's Board of Directors adopted
    a Shareholder Rights Plan (the "Plan"). The Company adopted
    the Plan to protect shareholders against unsolicited attempts
    to acquire control of the Company that do not offer an
    adequate price to all shareholders or are otherwise not in
    the best interests of the Company and its shareholders. Under
    the Plan, each shareholder of record on December 20, 1996
    received one right for each ordinary share held, and each
    registered holder of outstanding warrants received one right
    for each ordinary share for which they are entitled to
    subscribe. Each right entitles the holder to purchase from
    the Company one-quarter of an ordinary share at an initial
    purchase price of $1.50. The rights will become exercisable
    and will detach from the ordinary shares a specified period
    of time after any person has become the beneficial owner of
    20 per cent or more of the Company's ordinary shares.

    If any person becomes the beneficial owner of 20 per cent or
    more of the Company's ordinary shares, each right will
    entitle the holder, other than the acquiring person, to
    purchase for the purchase price, that number of ordinary
    shares having a market value of up to eight times the
    purchase price.

    If, following an acquisition of 20 per cent or more of the
    Company's ordinary shares, the Company is involved in certain
    amalgamations or other business combinations or sells or
    transfers more than 50 per cent of its assets or earning
    power, each right will entitle the holder to purchase for the
    purchase price ordinary shares of the other party to the
    transaction having a market value of up to eight times the
    purchase price.

    The Company may redeem the rights at a price of $0.001 per
    right at any time prior to a specified period of time after a
    person has become the beneficial owner of 20 per cent or more
    of its ordinary shares. The rights will expire on December
    31, 2006, unless earlier exchanged or redeemed.

    A number of the Company's bank loans contain a clause that
    prohibits dividend payments without the approval from the
    lending banks.




                               80



<PAGE>

17. WARRANTS AND SHARE OPTION PLANS

    At the effective date of the Amalgamation, Frontline recorded
    warrants to purchase 124,558 shares (restated from 1,245,588)
    of LOF and options to purchase 288,000 shares (restated from
    2,880,000) of LOF. These warrants and share options have been
    recorded at fair value, calculated using the Black-Scholes
    option pricing model, as an adjustment to the purchase price
    on the acquisition of LOF. These warrants entitle the holder
    to subscribe for one ordinary share in the Company at a price
    of 4.00 pound sterling and are exercisable at any time up to
    December 31, 2003.

    Pursuant to the terms of the Amalgamation Agreement, warrants
    to purchase 2,600,000 shares (restated from 26,000,000) in
    the Company were granted on the date of Amalgamation. These
    warrants have been recorded at an estimated fair value at
    November 1, 1997 using the Black-Scholes option pricing
    model. These warrants entitle the holder to subscribe for one
    ordinary share in the Company at a price of $15.91 and are
    exercisable at any time up to May 11, 2001.

    The following summarises the warrant transactions:

                                                          Number
    Warrants assumed on Amalgamation                     124,558
    Warrants issued on Amalgamation                    2,600,000
      Exercised                                                -
    Warrants outstanding at December 31, 1997          2,724,558
      Exercised                                                -
    Warrants outstanding at December 31, 1998          2,724,558
      Exercised                                                -
    -------------------------------------------------------------
    Warrants outstanding at December 31, 1999          2,724,558
    =============================================================

    The Company has in place a Bermuda Share Option Plan (the
    "Bermuda Plan") and a United Kingdom Share Option Plan (the
    "U.K. Plan"). Under the terms of the plans, the exercise
    price for the share options may not be less than the average
    of the fair market value of the underlying shares for the
    three dealing days before the date of grant. The number of
    shares granted under the plans may not in any ten year period
    exceed 7 per cent of the issued share capital of the Company.
    No consideration is payable for the grant of an option.

    Under the Bermuda Plan, options may be granted to any
    director or eligible employee of the Company or subsidiary.
    Options are exercisable for a maximum period of nine years
    following the first anniversary date of the grant.



                               81



<PAGE>

    The following summarises the share options transactions
    relating to the Bermuda Plan:

    (in thousands, except per share data)     Shares    Weighted
                                                         average
                                                        exercise
                                                           price
       Assumed on Amalgamation                   129    $  14.45
       Exercised                                   -           -
       Cancelled                                   -           -
    Options outstanding at December 31, 1997     129    $  14.45
       Exercised                                   -           -
       Cancelled                                   -           -
    Options outstanding at December 31, 1998     129    $  14.45
       Granted                                   300    $   5.53
       Exercised                                   -           -
       Cancelled                                (16)    $  12.58
    -------------------------------------------------------------
    Options outstanding at December 31, 1999     413    $   7.89
    =============================================================

    Options exercisable at:
    December 31, 1997                            121    $  14.63
    =============================================================
    December 31, 1998                            129    $  14.45
    =============================================================
    December 31, 1999                            113    $  14.71
    =============================================================

    Under the U.K. Plan, options may be granted to any full-time
    director or employee of the Company or subsidiary. Options
    are only exercisable during the period of seven years
    following the third anniversary date of the grant.

    The following summarises the share options transactions
    relating to the U.K. Plan:

    (in thousands, except per share data)     Shares    Weighted
                                                         average
                                                        exercise
                                                           price
       Assumed on Amalgamation                   159        8.61
                                                           pound
                                                        sterling
       Exercised                                   -           -
       Cancelled                                   -           -
    Options outstanding at December 31, 1997     159        8.61
                                                           pound
                                                        sterling
       Exercised                                 (1)        7.28
                                                           pound


                               82



<PAGE>

                                                        sterling
       Cancelled                               (144)        8.57
                                                           pound
                                                        sterling
    Options outstanding at December 31, 1998      14        9.11
                                                           pound
                                                        sterling
       Exercised                                   -           -
       Cancelled                                (12)        9.42
                                                           pound
                                                        sterling
    -------------------------------------------------------------
    Options outstanding at December 31, 1999       2        7.28
                                                           pound
                                                        sterling
    =============================================================

    Options exercisable at:
    December 31, 1997                            135        8.73
                                                           pound
                                                        sterling
    =============================================================
    December 31, 1998                             12        9.42
                                                           pound
                                                        sterling
    =============================================================
    December 31, 1999                              -           -
    =============================================================

    The weighted average fair value of options granted under the
    Bermuda Plan in the year ended December 31, 1999 was $2.61.
    The fair value of each option grant is estimated on the date
    of grant using the Black-Scholes option pricing model with
    the following weighted average assumptions used for the grant
    in the year ended December 31, 1999: risk free interest rate
    of 6.6 per cent; expected life of three years, expected
    volatility of 63 per cent, expected dividend yield of zero
    per cent.

    The options outstanding under the Bermuda Plan as at December
    31, 1999 and December 31, 1998 have exercise prices between
    $5.32 and $15.00. The options that are not presently
    exercisable vest on January 1, 2001. The options outstanding
    under the Bermuda Plan as at December 31, 1999 have a
    weighted average contractual life of 5.6 years.

    The options outstanding under the U.K. Plan at December 31,
    1999 have an exercise price of 7.28 pound sterling. The
    options that are not presently exercisable vest three years
    from the date of grant, being February 5, 2000. The options



                               83



<PAGE>

    outstanding under the UKPlan as at December 31, 1999 have a
    weighted average contractual life of 6.1 years.

    The Company has recorded no compensation expense for the
    issuance of share options. The share options assumed in
    connection with the Amalgamation with LOF have been treated
    as an adjustment to the purchase price. Had the compensation
    costs for these plans been determined consistent with the
    fair value method recommended in SFAS 123, the Company's net
    income and earnings per share would have been reduced to the
    following pro forma amounts:

    (in thousands, except
     per share data)                1999        1998        1997
                                          (restated)  (restated)
    Net income
       As reported              (86,896)      31,853      22,794
       Pro-forma                (87,679)      31,853      22,794
    Earnings (loss) per share
       As reported              $ (1.76)      $ 0.69      $ 0.63
       Pro-forma               $ (1.77)       $ 0.69      $ 0.63

18. FINANCIAL INSTRUMENTS

    INTEREST RATE RISK MANAGEMENT
    In certain situations, the Company may enter into financial
    instruments to reduce the risk associated with fluctuations
    in interest rates. The Company does not hold or issue
    instruments for speculative or trading purposes. The
    counterparties to such contracts are Chase, Citibank N.A.,
    Christiania Bank og Kreditkasse, Midland Bank and
    Skandinaviska Enskilda Banken. Credit risk exists to the
    extent that the counterparties are unable to perform under
    the contracts.

    The Company manages its debt portfolio with interest rate
    swap agreements in U.S. dollars to achieve an overall desired
    position of fixed and floating interest rates. The Company
    has entered into the following interest rate swap
    transactions involving the payment of fixed rates in exchange
    for LIBOR:

    Principal                  Inception      Maturity     Fixed
                                    Date          Date  Interest
                                                            Rate
    (in thousands of $)
    $10,000                     May 1996      May 2000     5.56%
    $50,000                February 1998 February 2003    5.685%
    $25,000                  August 1998   August 2003    5.755%
    $25,000                  August 1998   August 2003    5.756%
    $50,000                February 1998 February 2003    5.775%


                               84



<PAGE>

    $50,000                   March 1998 February 2003    5.885%
    $20,000                     May 1998      May 2000     5.90%
    $41,454 reducing quarterly
     to $34,051                 May 1997      May 2001     6.84%
    $6,218                 December 1991 November 2000     6.97%
    $16,000 reducing semi-
     annually to $13,000  September 1996  November 200    16.79%

    As at December 31, 1999, the notional principal amounts
    subject to such swap agreements was $293,672,000 (1998 -
    $441,223,000).

    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, Swedish kronor or Norwegian
    kroner and risks of two kinds arise as a result: a
    transaction risk, that is, the risk that currency
    fluctuations will have a negative effect on the value of the
    Company's cash flows; and a translation risk, 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.
    The Company has not entered into derivative contracts for
    either transaction or translation risk. Accordingly, such
    risk may have an adverse effect on the Company's financial
    condition and results of operations.

    FORWARD FREIGHT CONTRACTS
    The Company may enter into forward freight contracts in order
    to manage its exposure to the risk of movements in the spot
    market for certain trade routes. 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.

    FAIR VALUES
    The carrying value and estimated fair value of the Company's
    financial instruments at December 31, 1999 and 1998 are as
    follows:












                               85



<PAGE>

                                    1999        1999        1998          1998
    (in thousands of $)         Carrying        Fair    Carrying          Fair
                                   Value       Value       Value         Value
    Non-Derivatives:
    Cash and cash equivalents     65,467      65,467      74,034        74,034
    Marketable securities         10,867      10,867           -             -
    Short-term debt              116,814     116,814     170,551       170,551
    Long-term debt, including
     convertible debt            962,880     962,880     712,470       712,470

    Derivatives:
    Interest rate swap transactions    -       5,787           -       (7,136)
    Forward freight contracts          -           -           -             -

    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 and the
    convertible debt were based on the quoted market price of
    these or similar instruments when available. The estimated
    fair value for long-term debt was considered to be equal to
    the carrying value since it bears variable interest rates
    which are reset on a quarterly basis.

    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.

    Fair value of forward freight contracts is estimated by
    taking into account the cost of entering into forward freight
    contracts to offset the Company's outstanding contracts.

    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,
    Nordlandsbanken and Christiania Bank og Kreditkasse. 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. In 1997 one customer accounted for 10 per cent
    or more of freight revenues. In 1998 and 1999, no customer
    accounted for more than 10 per cent or more of freight
    revenues.

19. RELATED PARTY TRANSACTIONS

    Management believes transactions with related parties are
    under terms similar to those that would be arranged with
    other parties.


                               86



<PAGE>


    During 1996, 1997 and January 1998, Frontline received
    options to assume newbuilding contracts for the construction
    and purchase of five Suezmax tankers at the Hyundai Heavy
    Industries Co. Ltd. shipyard in South Korea for delivery in
    1998 and 2000 from single-ship owning companies (the "Suezmax
    Newbuilding Companies") affiliated with Hemen Holding Ltd.
    ("Hemen"). Hemen is the Company's largest shareholder and is
    indirectly controlled by Mr. John Fredriksen, Chairman and
    Chief Executive Officer of the Company. The first three of
    the Suezmax tankers were delivered during 1998. The remaining
    two vessels were  delivered in  February and April, 2000.

    During 1997, Frontline received options to assume from other
    Hemen affiliated parties, five newbuilding contracts for the
    construction and purchase of five VLCC tankers. These options
    were exercised in March 1998. The first two VLCC newbuildings
    were delivered in 1998, the third in January 1999 and the
    remaining two were delivered in mid 1999.

    In May 1998, the Company acquired control of three shipowning
    and/or leasing structures which are organised in a non-
    recourse entity, Independent Tankers Corporation ("ITC"). The
    Company acquired ITC for $9.5 million. The Company's
    investment in ITC was subsequently sold to Hemen for $9.5
    million with effect from July 1, 1998. The acquisition and
    sale of ITC are treated as occurring on the same date for
    accounting purposes as a result of the common control
    relationship between the Company and Hemen. The results of
    ITC are therefore not consolidated in the Company's financial
    statements for any period in 1998. The Company has remained
    as the manager of the underlying assets and has received a
    five year fair value call option to buy back ITC.

    In June 1998, the Company obtained a loan of $87.5 million
    from Metrogas, the Metrogas Loan, to finance the acquisition
    of the five VLCC newbuilding contracts described above. This
    loan bears interest at the rate of 6.75 per cent per annum.
    At December 31, 1998, an amount of $89 million was
    outstanding in respect of the Metrogas Loan, including
    interest accrued thereon. In the year ended December 31,
    1998, the Metrogas Loan bore interest at the rate of 6.75 per
    cent. Interest expense recorded by the Company in 1998 in
    respect of this loan was $3,780,772. On September 30, 1999,
    $35 million of the $89 million Metrogas Loan was converted to
    equity by the issuance of 8,230,000 shares at an issue price
    of NOK 33.00 per share. In connection with this conversion,
    Metrogas offered $15 million of the resulting ordinary shares
    to existing Frontline shareholders and warrant holders,
    excluding US persons. In connection with this secondary
    offering by Metrogas, Frontline bore costs of the offering of


                               87



<PAGE>

    $15,000. At December 31, 1999, an amount of $56.7 million was
    outstanding in respect of the Metrogas Loan, including
    interest accrued thereon. In the year ended December 31,
    1999, the Metrogas Loan bore interest at the rate of 8.0 per
    cent and the Company incurred interest of $5.4 million, of
    which $2.7 million was expensed.

    In addition to the lending arrangement described above, Hemen
    affiliated parties have, during 1998 and 1999, provided
    additional short term financing to the Company. Such
    financing bears interest at the rate of 6.75 per cent per
    annum. Interest expense recorded by the Company in 1999 in
    respect of such financing was $428,291 (1998 - $550,803).

20. ACQUISITIONS

    In September 1999, Frontline acquired shares in ICB
    sufficient to provide voting control of the company. This
    acquisition followed a tender offer which commenced in
    September, 1997 and further acquisitions of ICB Shares in
    1998 and in the first half of 1999 (see Note 1). The
    acquisition of ICB was primarily funded by loans from Chase.
    The investment in ICB in 1997 and 1998 was originally
    accounted for as an available-for-sale security in accordance
    with SFAS 115. Following Frontline obtaining control of ICB,
    the financial statements for 1997 and 1998 have been restated
    and the investment accounted for using the equity method. The
    results of ICB have been consolidated with effect from
    January 1, 1999. For the period from the initial acquisition
    of ICB Shares in 1997 to September 30, 1999, the principles
    of step-by-step acquisition accounting have been applied. At
    each step of the acquisition, the purchase price has been
    allocated to the net assets acquired based on their estimated
    fair values. The difference between the purchase price at
    each step, and the net assets acquired, has been assigned to
    the identifiable long-term assets of ICB or has been recorded
    as goodwill, as appropriate.

    Effective November 1, 1997, Frontline acquired 79.74 per cent
    of the outstanding Ordinary Shares of LOF for approximately
    $93.5 million in cash (see Note 1). The acquisition was
    primarily funded by a loan from Chase. In 1997, the results
    of LOF were consolidated with effect from the date of
    acquisition. The acquisition has been accounted for using the
    purchase method of accounting. Accordingly, the total
    purchase price has been allocated to the net assets acquired
    based on their estimated fair values. The difference between
    the total purchase price and net assets acquired was deducted
    from the assigned value of the three Suezmax vessels which
    comprise the identifiable long-term assets of LOF. The



                               88



<PAGE>

    subsequent gain realised on the sale of LOF's Panamax tankers
    was reflected as an adjustment to the purchase price.

    The following table reflects unaudited pro-forma combined
    results of operations of the Company on the basis that the
    acquisitions of ICB and LOF had taken place at January 1,
    1998 and 1997, respectively:

    (in thousands of $, except per share data)  1998        1997
    Net operating revenues                   316,910     234,585
    Net income                                52,099      19,734
    Basic and diluted earnings per share        1.13        0.43

    In management's opinion, the unaudited pro-forma combined
    results of operations are not indicative of the actual
    results that would have occurred had the acquisitions been
    consummated at the beginning of 1997 and 1998 or of future
    operations of the combined companies.

21. COMMITMENTS AND CONTINGENCIES

    Assets Pledged

    (in thousands of $)                         1999        1998
    Ship mortgages                         1,001,669     691,859
    Chattel mortgages and other
     assets pledged                                -      80,152
    Restricted bank deposits                     800       1,916
    -------------------------------------------------------------
                                             813,419     773,927
    =============================================================

    Other Contractual Commitments
    When newbuilding contracts were executed for the tankers
    Front Melody, which was sold in 1992, and Front Rhapsody,
    which was sold in 1993, Frontline also signed an agreement to
    finance a peseta denominated loan in a foreign bank. Under
    the agreements, Frontline was required to make a peseta
    denominated deposit in the same bank. The deposits are being
    used to fulfil the payment commitments on the loan
    agreements. The deposits carry a higher interest rate than
    the loans. The balance was $0.1 million and $0.7 million as
    of December 31, 1999 and 1998 respectively. These balances
    are contractual commitments, since the Company's only risk is
    the interest rate gap between loans and deposits. The loan
    agreements specify assignment of future operating revenue of
    vessels for the benefit of the lender. The assignment applies
    only in case of default under the loan agreements.

    The Company insures the legal liability risks for its
    shipping activities with Assuranceforeningen SKULD and the


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<PAGE>

    United Kingdom Mutual Steamship Assurance Association
    (Bermuda), both 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.

22. SUPPLEMENTAL INFORMATION

    Non-cash investing and financing activities included the
    following:

    (in thousands of $)             1999        1998        1997
                                          (restated)  (restated)
    Unrealised appreciation
     (depreciation) on investments
    Recorded directly to equity  (2,843)     (3,013)         783
    In connection with purchase
     of fixed assets:
    Shares issued                  9,000           -           -

    Acquisition of businesses:
    Assets acquired,
     including goodwill          652,008           -     248,407
    Liabilities assumed and
     incurred                    391,257           -     139,177
    Conversion of equity method
     investment in ICB           236,051           -           -
    Minority interest recorded   150,700
    Shares issued                      -           -      37,937
    Options and warrants assumed       -           -       1,647
    Cash paid (acquired)       (126,000)           -      69,646

23. SUBSEQUENT EVENTS

    In December 1999, Frontline entered into an agreement with
    five other shipowners, A.P. Moller, Euronav Luxembourg SA,
    Osprey Maritime Ltd., Overseas Shipholding Group Inc. and
    Reederei "Nord" Klaus E. Oldendorff to establish a Marshall
    Islands corporation, Tankers International LLC ("Tankers"),
    to operate a pool of their respective VLCC fleets. Tankers
    commenced operations on February 1, 2000 with an initial
    fleet of 39 modern VLCCs.

    On February 7, 2000, the Company signed a loan agreement to
    finance the fourth and fifth Suezmax newbuildings, the Front
    Sky and the Front Sun. The loan is in the amount of $62


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<PAGE>

    million, being $31 million per vessel, and is secured by
    first preferred ship mortgages on each vessel. Concurrent
    with the delivery of the Front Sky and Front Sun,
    respectively, the Company also signed two loan agreements for
    $22.5 million each, such loans being secured by second
    priority ship mortgages. The loans relating to the Front Sky,
    were drawndown on February 10, 2000, and the loans relating
    to the Front Sun were drawndown on April 12, 2000, their
    respective delivery dates.

    On February 7, 2000, the Company signed a loan agreement to
    finance the delivery of the Suezmax newbuilding, the Front
    Archer. The loan is in the amount of $32 million and is
    secured by a first priority statutory ship mortgage on the
    vessel. This vessel was acquired pursuant to a transaction
    with the Mosvold Farsund Group under which Frontline acquired
    the Suezmax newbuilding contract for a purchase price of
    $45.5 million. This purchase price was part financed by the
    issuance of 1,910,000 Frontline ordinary shares in December
    1999 as described in Note 16. The Front Archer was delivered
    to the Company on February 15, 2000.

    On February 25, 2000, the Company issued 3,500,000 ordinary
    shares at NOK 57.50 per share in a private placement to
    institutional shareholders. At the same time, $30 million of
    the Metrogas Loan was converted to equity, resulting in the
    issuance of 4,350,000 ordinary shares at an issue price of
    NOK 57.50 per share. Hemen Holding offered 2,000,000 of the
    shares to certain existing shareholders of the Company (other
    than US persons) by means of a secondary offering. As a
    result of this transaction, as at March 31, 2000, the total
    ordinary shares outstanding increased to 68,811,860.

    In March 2000, Frontline entered into a joint venture with
    Euronav Luxembourg SA and Overseas Shipholding Group Inc. to
    acquire the 1993 built VLCC Toba for $37.25 million.
    Frontline has taken a 40 per cent interest in the vessel,
    which once acquired on March 9, 2000 was renamed Front Tobago
    and entered into the Tankers VLCC pool.

    On March 30, 2000 Frontline entered into an agreement with
    Wilh. Wilhelmsen ASA to buy the two 1993-built VLCCs, Tartar
    and Tarim. The agreed purchase price of $45 million per ship
    has been paid by $62 million in cash and through the issuance
    of 2,957,500 Frontline shares. The shares were issued at NOK
    80.00 per share. Under the agreement, Frontline has given a
    price guarantee for the shares issued. This guarantee becomes
    effective if Frontline's share price six months after the
    date of issuance of the shares to Wilhelmsen is under NOK
    80.00. In such an event, Frontline has, agreed to compensate
    Wilhelmsen for the difference between NOK 80.00 and the


                               91



<PAGE>

    Frontline share price at that time. This guarantee is
    released if Frontline's share price in the period before this
    date has been over NOK 90.00 for more than 20 trading days.
    Tartar and Tarim were delivered to Frontline on May 23, 2000
    and June 14, 2000, respectively and entered into the Tankers
    pool. On May 22, 2000, the Company signed a loan agreement to
    finance the delivery of the Tartar and Tarim. The loan is in
    the amount of $62 million, being $31 million per vessel, and
    is secured by first preferred ship mortgages on each vessel.

    In March 2000, Frontline entered into an agreement to sell
    its 50 per cent share in Floating Storage Inc. SA, which was
    acquired as a part of the ICB acquisition. This sale
    generated a gain of $2.2 million.

    In February, March and April 2000, Frontline acquired Golden
    Ocean Group Limited ("Golden Ocean") US$ 291 million Senior
    Notes due in August 2001 and at June 13, 2000 held Senior
    Notes with a face amount of $76.8 million. Golden Ocean is a
    shipping group which holds interest in 14 VLCCs and 10 bulk
    carriers. Most of the delivered tonnage is presently employed
    on medium to long term charters. Golden Ocean filed for
    bankruptcy protection under Chapter 11 of the U.S. Bankruptcy
    Code, on January 14, 2000, and through this protection
    received  an exclusive period of up to 120 days to file a
    Plan of Reorganisation. As one of Golden Ocean's largest
    creditors, Frontline announced that it would seek to be
    actively involved in the reorganisation process.

    On May 25, 2000, the Company and Golden Ocean signed a term
    sheet (the "Frontline/Golden Ocean Term Sheet") relating to a
    Proposed Joint Plan of Reorganisation (the "Joint Plan") for
    Golden Ocean. Upon the effective date of the Golden Ocean
    Plan, Golden Ocean would become a wholly-owned subsidiary of
    Frontline. The Official Committee of Unsecured Creditors of
    Golden Ocean announced that it would fully support and would
    be a co-proponent of the Joint Plan. The Frontline/Golden
    Ocean Term Sheet provided for a payment to all unsecured
    creditors in Golden Ocean including the holders of Golden
    Ocean Senior Notes. Pursuant to the Frontline/Golden Ocean
    Term Sheet, Frontline committed to pay up to $33.0 million in
    cash, or to issue up to 4.1 million shares and 1.9million
    warrants in Frontline valued to $48.4 million to take over
    all unsecured debt and all upstream guarantees. These amounts
    do not include a takeout of the $77.75 million Golden Ocean
    debt currently controlled by Frontline. The old share capital
    would, according to the Frontline/Golden Ocean Term Sheet, be
    cancelled while new share capital will be injected by
    Frontline. In addition, the Frontline/Golden Ocean Term Sheet
    provided for the release of upstream guarantees in favour of
    the holders of Golden Ocean Senior Notes. During the


                               92



<PAGE>

    negotiations over the Frontline/Golden Ocean Term Sheet,
    another bidder, Bentley Investments S.A. ("Bentley") took
    control of Golden Ocean's Board of Directors and caused
    Golden Ocean to withdraw its support of, and object to, the
    approval of the Frontline/Golden Ocean Term Sheet.

    On June 6, 2000, the Bankruptcy Court in the Golden Ocean
    bankruptcy case terminated Golden Ocean's exclusive period to
    file a plan of reorganisation, which permits any party in
    interest to propose a plan. The Court ruled that all plans
    and related disclosure statements must be filed by close of
    business June 30, 2000. The Court set July 13, 2000 for a
    hearing on the adequacy of each disclosure statement filed by
    a plan proponent.

    Also at the June 6, 2000, hearing, with Frontline's consent,
    Bentley replaced Frontline as debtor-in-possession lender to
    Golden Ocean, by paying Frontline the outstanding balance of
    the loan, plus interest, fees and expenses, with Frontline
    reserving all rights to final payment of its expenses,
    premiums owing to it.

    On May 25, 2000 Frontline entered into an agreement pursuant
    to which Frontline acquired the VLCC newbuilding, Kawasaki
    1638, from Golden Ocean for $73.8 million. The vessel, Front
    Tina, was delivered to Frontline on June 7, 2000 and entered
    the Tankers VLCC pool. Golden Ocean has an option to
    repurchase the Front Tina at a purchase price equal to the
    Company's actual cost for the vessel (including related
    financing and legal expenses) plus $2.5 million. The option
    is exercisable during the period which expires on the earlier
    of December 1, 2000 and the date on which a plan of
    reorganisation relating to Golden Ocean that is sponsored or
    financed by the Company becomes effective. If such
    effectiveness does not occur by October 1, 2000, the option
    shall expire on January 1, 2001. If Golden Ocean exercises
    the option, the parties will enter into an approximately six
    month time charter at the rate of $31,250 per day. In May,
    2000, the Company signed a loan agreement to assist in
    financing the delivery of the Front Tina. The loan is in the
    amount of $50 million and is secured by a first preferred
    ship mortgage on the vessel.

    On May 25, 2000 the Company issued 3,000,000 ordinary shares
    at $10.15 per share in a private placement to a group of
    international institutional investors. The proceeds of the
    issue were used to part finance the acquisition of Front
    Tina.

    In June, 2000 the Company entered into an agreement with
    Euronav to acquire two Suezmax tankers, Ardenne and Brabant


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<PAGE>

    for a total price of $95.0 million. The vessels will be taken
    over by Frontline in September 2000.

    On June 20, 2000, the Company issued 4,000,000 ordinary
    shares at a price of NOK 104.5 per share in a private
    placement to a group of international institutional
    investors. Part of the proceeds of the issue will be used to
    part finance the acquisition of the Ardenne and Brabant. The
    remaining portion of the proceeds will be used to fund
    further acquisitions of vessels in the Suezmax and VLCC
    tanker market.










































                               94



<PAGE>

Index to Consolidated Financial Statements of ICB Shipping AB


Report of Independent Accountants

Consolidated Income Statements for the years ended December 31,
1998 and 1997

Consolidated Balance Sheets as of December 31, 1998 and 1997

Consolidated Statements of Changes in Financial Position for the
years ended December 31, 1998
 and 1997

Notes to Consolidated Financial Statements






































                               95



<PAGE>

Report of Independent Accountants


To the Board of Directors and Stockholders
ICB Shipping AB


We have audited the accompanying consolidated balance sheets of
ICB Shipping AB and subsidiaries as of December 31, 1998 and
1997, and the related consolidated statements of income and
changes in financial position for the years then ended.  These
consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with auditing standards
generally accepted in Sweden that are substantially equivalent to
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of ICB Shipping AB and subsidiaries as of December 31,
1998 and 1997 and the results of their operations and their
changes in financial position for the years then ended in
conformity with accounting principles generally accepted in
Sweden.

Accounting principles generally accepted in Sweden vary in
certain significant respects from accounting principles generally
accepted in the United States.  Application of accounting
principles generally accepted in the United States would have
affected results of operations for the years ended December 31,
1998 and 1997 and stockholders' equity as of December 31, 1998
and 1997 to the extent summarized in Note 21 to the consolidated
financial statements.


Stockholm, Sweden
April 12, 1999, except for the paragraph regarding Note 21 as to
which the date is January 25, 2000



                               96



<PAGE>

Per Bergman
Authorized Public Accountant
KPMG


















































                               97



<PAGE>

ICB Shipping AB
Consolidated Income Statements for the years ended
December 31, 1998 and 1997
(in millions of Swedish Kronor)

                                   Notes        1998        1997
Operating revenues
  Net freight revenues                 1       1,287       1,055
  Result from sale of vessels                    (1)           -
Operating expenses
  Ship operating expenses                        715         582
  Administrative income                         (11)        (12)
  Administrative expenses                         42          49
                                          ----------   ---------

Net operating income before depreciation         540         436
                                          ----------   ---------
  Depreciation                                   245         171
                                          ----------   ---------
Net operating income after depreciation          295         265
                                          ----------   ---------
Other income (expenses)
  Interest income                                 39          38
  Interest expense                             (168)       (117)
  Exchange rate differences                        4          71
  Profit from securities and
    other receivables
    accounted for as non-current assets            3          36
  Other financial items                4         (3)           -
                                          ----------   ---------
Net income before minority
 share and income taxes                          170         293
                                          ----------   ---------
Minority share                                     4           4
Income taxes                           5           1           -
                                          ----------   ---------
Net income                                       165         289
                                          ==========   =========















                               98



<PAGE>

ICB Shipping AB
Consolidated Balance Sheets as of December 31, 1998 and 1997
(in millions of Swedish Kronor)

                                   Notes        1998        1997
ASSETS
Non-current assets
  Vessels                              6       4,353       3,214
  Newbuilding contracts                            -         322
  Call options on vessels                          -         363
  Participation in group and
   associated companies                7           2           2
  Receivables from associated
   companies                           9         138          66
  Other securities accounted
   for as fixed assets                10         129         175
  Other long-term receivables                      2           3
                                          ----------   ---------
  Total non-current assets                     4,624       4,145

Current assets
  Trade accounts receivable                      124         159
  Other receivables                               26          24
  Prepaid expenses and accrued income 11          54          67
  Short-term investments              12         830         151
  Cash and bank balances                         192         458
                                          ----------   ---------
  Total current assets                         1,226         859
                                          ----------   ---------
  Total assets                                 5,850       5,004
                                          ==========   =========

SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity                  13
Restricted Shareholders Equity
  Share Capital                                   70          70
  Restricted Reserves                          1,997       1,877
                                          ----------   ---------
  Total restricted shareholders'
   equity                                      2,067       1,947
Unrestricted shareholders' equity
  Unrestricted reserves                          445         293
  Profit for the year                            165         289
                                          ----------   ---------
  Total unrestricted shareholders'
   equity                                        610         582
                                          ----------   ---------

  Total shareholders' equity                   2,677       2,529
  Minority interests                               -          36
  Untaxed reserves                    14           -           -


                               99



<PAGE>

  Long-term liabilities
  Liabilities to credit institutions  15       2,723       1,879
  Other long-term liabilities         16           0          88
                                          ----------   ---------
  Total long-term liabilities                  2,723       1,967
                                          ----------   ---------
  Current liabilities
  Liabilities to credit institutions             264         171
  Accounts payable, trade                         17          18
  Other current liabilities                       11         164
  Accrued expenses and
   deferred income                    17         158         119
                                          ----------   ---------
  Total current liabilities                      450         472
  Total liabilities and
   stockholders' equity                        5,850       5,004
  Pledge assets                       18       3,034       1,675
  Contingent liabilities              19          94          96
  Tonnage chartered                   20


































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<PAGE>

ICB Shipping AB
Consolidated Statements of Changes in Financial Position for the
years ended
December 31, 1998 and 1997
(in millions of Swedish Kronor)

                                                1998        1997
Sources of funds
Funds generated from the year's operations
Profit after financial items                     170         289
  Depreciation                                   245         171
  Sale of vessels                                (1)           -
  Write down of shares accounted for as
   non-current assets                             12           -
  Taxes                                          (1)           -
  Total funds generated from the year's
   operations                                    425         460
                                          ----------   ---------
  External sources of funds*
  Translation difference                           8          31
  Minority share                                (36)           8
                                          ----------   ---------
  Total external sources of funds               (28)          39
                                          ----------   ---------

  Application of funds*
  Investments in ships / newbuilding
   contracts                                     597         722
  Investments in other securities
   accounted for as fixed assets                (38)         147
  Decrease / increase in long-term
   liabilities                                 (696)       (241)
  Increase / decrease in long-term receivables    68          64
  Dividend to shareholders                        77          56
                                          ----------   ---------
  Total application of funds                       8         748
                                          ----------   ---------
  Change in working capital                      389       (249)

  Specification of change in working capital
  Change in cash, bank balances and
   short-term investments                        412       (141)
  Change in current receivables                 (45)          87
  Change in current liabilities                   22       (195)
                                          ----------   ---------
  Total change in working capital                389       (249)







                               101



<PAGE>

                 ACCOUNTING PRINCIPLES AND NOTES

ACCOUNTING PRINCIPLES
GENERAL ACCOUNTING PRINCIPLES
The Company follows the recommendations of the Swedish Financial
Accounting Standards Council and the Swedish Accounting Standards
Board.

PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include companies in which
ICB directly or indirectly owns more than 50 percent of the
voting rights.

The consolidated financial statements have been prepared
according to the purchase method of accounting and recommendation
no. 1 of the Swedish Financial Accounting Standards Council. This
means that equity in a subsidiary at the acquisition date is
eliminated entirely. As a result, only income arising after the
acquisition date is included in the Group's shareholders' equity.

In preparing the consolidated financial statements, all income
statement items of foreign subsidiaries have been translated to
Swedish Kronor at the average exchange rates for the financial
year (average rates). All balance sheet items, except for the
profit/loss for the year, are translated at the exchange rate in
effect at the end of the respective year (closing rate). Changes
in the Group's shareholders' equity arising from variations in
closing rates compared with previous years' closing rates affect
equity directly as a translation difference. Differences arising
in the consolidated balance sheet through translation of the net
income in foreign subsidiaries to Swedish Kronor at the average
rates affect equity directly as a translation difference. The
methods described above result in translation differences related
to foreign currencies being taken directly to equity. Thus,
unrealised changes in value do not affect net income for the
year.

RECEIVABLES AND LIABILITIES IN FOREIGN CURRENCY
Liquid funds, receivables and liabilities in foreign currency
have been translated at the closing rate. Unrealised exchange
rate gains in foreign currencies are allocated to a foreign
exchange reserve for long-term receivables and liabilities.
Pledged assets and contingent liabilities have been translated at
the closing rate.

REVENUE AND EXPENSE RECOGNITION
Revenues and expenses are recognised on the accrual basis.
Revenues are generated from freight billings and time charter
hires. The operating results of voyages in progress are estimated
and recorded pro-rata on a per day basis in the consolidated
statements of operations. Probable losses on voyages are provided


                               102



<PAGE>

for in full at the time such losses can be estimated. Time
charter revenues are recorded over the term of the time charter
as service is provided.

PLEDGED ASSETS
Ship mortgages are stated in an amount corresponding to the
outstanding liability under the respective loan that the mortgage
secures.













































                               103



<PAGE>

NOTES
(amounts in millions of Swedish Kronor unless otherwise
specified)

NOTE 1 - OPERATING REVENUE
Operating revenue and expenses include direct voyage-related cost
compensation (voyage expenses) totalling SEK 334 million (1997:
SEK 281 million).

NOTE 2 - OPERATING EXPENSES
Operating expenses include capital costs for tonnage on long-term
charter, totalling SEK 50 million (1997: SEK 46 million). The
time charter hire for Kim Jacob was SEK 10 million

NOTE 3 - DEPRECIATION
Vessels are depreciated on a straight-line basis over a period of
20 years, down to a conservatively calculated scrap value of USD
100 per lightweight ton.

NOTE 4 - PROFIT FROM SECURITIES AND RECEIVABLES ACCOUNTED FOR AS
NON-CURRENT ASSETS
                                                1998        1997
Up-front payment from Knightsbridge Tankers        -          23
Capital gain on sale of shares                     5           3
Dividends                                          8          10
Dividends from associated companies                2           -
Write-down of shares                            (12)           -
                                          ----------   ---------
Total                                              3          36
                                          ----------   ---------

In 1998 an internal Group restructuring was implemented due to
changed tax rules in the Netherlands. For the Parent Company,
this led to a capital gain of SEK 516 million on sold shares in
subsidiaries, and to a capital loss of SEK 185 million on sold
receivables in Group companies. The Company will be requesting a
deferment of capital gains tax.

NOTE 5 - TAXES
The tax authority has charged the Company an additional SEK 53
million in taxes for the 1991 tax year. In January 1999, the
county administrative court supported the tax authority's
assessment. ICB has notified the administrative court that it
will be appealing the ruling of the county administrative court.
In the overall view of externally consulted tax experts, there is
overwhelming evidence indicating that the Company can win the
ongoing process. Supported by this statement, the Board has taken
the matter into consideration and made the judgement that the tax
authority's demand will not be taken into account in the income
statement and balance sheet in any other manner than reporting
the amount as a contingent liability. Due to the fact that, among


                               104



<PAGE>

other things, tax-loss carryforwards in the Parent Company exceed
net income for the year, no tax charge is expected to be incurred
for 1998.


















































                               105



<PAGE>

NOTE 6 - SHIPS
                                                1998        1997
Accumulated acquisition values
Opening acquisition values                     4,253       3,306
New acquisitions                               1,705         520
Sales during the year                          (408)           -
Translation differences for the year             105         427
                                          ----------   ---------
                                               5,655       4,253
                                          ----------   ---------
Accumulated planned depreciation
Opening depreciation                           1,039         827
Depreciation for the year                        245         171
Sales                                           (11)           -
Translation differences for the year              29          41
                                          ----------   ---------
                                               1,302       1,039
                                          ----------   ---------

Closing planned residual value                 4,353       3,214

Advance payments and building costs paid on the respective
closing dates are reported under the heading Newbuilding
Contracts. The entire investment is not accounted for until
delivery date (under the heading Ships).

                                                            1997
Accumulated acquisition values
Opening acquisition values                                   105
New acquisitions                                             202
Translation differences for the year                          15
                                                       ---------
                                                             322
                                                       ---------

NOTE 7 - PARTICIPATIONS IN ASSOCIATED COMPANIES

                                                1998        1997
Accumulated acquisition values
At beginning of year                               2           1
New acquisitions                                   -           1
                                          ----------   ---------
Closing book value                                 2           2
                                          ----------   ---------









                               106



<PAGE>

The equity method is not applied for associated companies, since
these have negligible significance with respect to the true and
fair view requirement of the Annual Accounts Act.

                                         Percentage                Par   Book
1998                            Domicile    holding     Number   value  value
_____________________________________________________________________________
Group Company holdings, subsidiaries
Granite Shipping Co Ltd.         Bahamas        100          1       0
Marble Shipping Co Ltd.          Bahamas        100          1       0
ICB Shipping Bermuda Ltd.        Bermuda        100     12,000       0
Drusberg Shipping Ltd.            Cyprus        100      1,000       0
Ipiranga Shipping Ltd.            Cyprus        100 71,317,425   1,239
Rosepetal Shipping Co Ltd.        Cyprus        100      1,000       0
Winchmore Shipping Ltd.           Cyprus        100        999       0
Constantine
Investments Ltd.                 Liberia        100        100       0
Damar Shipping Ltd.              Liberia        100    800,000       7
Dowelton Shipping Inc.           Liberia        100        500       0
Farmington Shipping Ltd.         Liberia        100          1       0
Flores Investments Ltd.          Liberia        100        500       0
ICB International Ltd.           Liberia        100        500       0
Langkawi Shipping Ltd.           Liberia        100        100       0
Lodi Shipping Ltd                Liberia        100          1       0
Madura Investments Ltd.          Liberia        100        200       0
Magnola Shipping Ltd.            Liberia        100        500       0
Maya Investments Ltd.            Liberia        100        500       0
Radiant Shipholding
Enterprises Inc.                 Liberia        100          1       0
Sibu Shipping Ltd.               Liberia        100        100       0
Southeast Tankers Inc.           Liberia        100        500       0
Southwest Tankers Inc.           Liberia        100        500       0
West Tankers Inc.                Liberia        100        500       0
Cinta Shipping BV            Netherlands        100      4,000       0
Clermont Shipping BV         Netherlands        100         48       0
Seabulk NV                Dutch Antilles        100         61       0
Seacarrier NV             Dutch Antilles        100         61       0
Seatank NV                Dutch Antilles        100         61       0
Seatruck NV               Dutch Antilles        100         61       0
Bolzano Pte Ltd.               Singapore        100    500,000       0
Fox Maritime Pte Ltd.          Singapore        100    500,000       0
Felix Shipping Pte Ltd.        Singapore        100    500,000       1
Lynx Maritime Pte Ltd.         Singapore        100    500,000       2
Seabridge Management
Service Pte Ltd.               Singapore        100    250,000       1
Touracos Pte Ltd.              Singapore        100    500,000       0
                                                              --------
                                                                 1,250
                                                              --------




                               107



<PAGE>

Group company holdings, associated companies
Sakhalin Storage Ltd.            Bermuda         50      5,000       0
Sakhalin Marine Ltd.             Bermuda         25        300       0
                                                              --------
Total group companies                                            1,250
                                                              --------


Parent company holdings, subsidiaries
ICB Forvaltning AB
reg.no. 556300-3085            Stockholm        100      1,000       0      0
ICB Invest AB
reg.no. 556300-3119            Stockholm        100      1,000       0      0
ICB Scandinavia AB
reg.no. 556361-9278            Stockholm        100      1,000       0      0
Rederi AB Lovart
reg.no. 556361-9252            Stockholm        100      1,000       0      0
ICB Shipholding Pte. Ltd.      Singapore        100          2       0      1
                                                               --------------
                                                                     0      1
Parent company holdings,
associated companies
Barium Shipping KB
reg.no. 916618-9671            Stockholm         39     39,200       0      0
Stockholm Chartering AB
reg.no. 556352-8339            Stockholm         30      4,500       0      1
                                                               --------------
Total, Parent Company                                                0      2


NOTE 9 - RECEIVABLES FROM ASSOCIATED COMPANIES
                                                1998        1997

Accumulated acquisition values
At beginning of year                              66           0
Addition of receivables                           70          66
Translation differences for the year               2           -
                                            --------    --------
Closing book value                               138          66
                                            --------    --------













                               108



<PAGE>

NOTE 10 - OTHER SECURITIES ACCOUNTED FOR AS NON-CURRENT ASSETS

                                                  1998      1997

Accumulated acquisition values
At beginning of year                               175        28
New acquisitions                                     -       150
Sales during the year                             (29)       (3)
Write-downs during the year                       (12)         -
Repayment of shareholders' equity                  (8)         -
Translation differences for the year                 3         -
                                                 -----     -----
CLOSING BOOK VALUE                                 129       175
                                                 -----     -----

                                          PAR    BOOK   MARKET
                       DOMICILE  NUMBER   VALUE  VALUE  VALUE
----------------------------------------------------------------
1998
Knightsbridge
Tankers Ltd.           Bermuda   805,000  0      117    136

1997
Knightsbridge
Tankers Ltd.           Bermuda   1,000,000              0
                       150

NOTE 11 - PREPAID EXPENSES AND ACCRUED INCOME

                                 1998     1997
Bunker inventory                 21       23
Accrued income                   23       38
Prepaid expenses                 10       6
                                 ---      ---
Total                            54       67
                                 ---      ---

NOTE 12 - SHORT-TERM INVESTMENTS
Short-term investments consist of short-term promissory note
receivables, totalling SEK 667 million (1997: SEK 151 million),
and commercial paper, totalling SEK 163 million (1997: SEK 0).












                               109



<PAGE>

NOTE 13 - SHAREHOLDERS' EQUITY

                             SHARE     RESTRICTED   UNRESTRICTED
                             CAPITAL   RESERVES     EQUITY

January 1, 1997                  70       1,597            379
Translation differences
for the year                                241             12
Transfers between
unrestricted
and restricted equity                        39           (39)
Dividend(56)
Profit for the year                                        289
                                                         -----
December 31, 1997                70       1,877            582
Translation differences
for the year                     49          11
Transfers between unrestricted
and restricted equity                        71           (71)
Dividend                                                  (77)
Profit for the year                                        165
                                                         -----
December 31, 1998                70       1,997            610
                                 --       -----          -----

The number of shares on December 31, 1998 and 1997, was
28,148,309, of which 2,488,648 were Class A with ten votes per
share and 25,659,661 were Class B with one vote per share.

NOTE 14 - UNTAXED RESERVES
The foreign exchange reserve amounted to SEK 60 million at
December 31, 1998 (1997: SEK 36 million).

NOTE 15 - LIABILITIES TO CREDIT INSTITUTIONS

                                           1998           1997
Due date, 1-5 years from
  accounting date                         1,488          1,117
Due date, later than 5
  years from accounting date              1,235            762
                                          -----          -----
Total                                     2,723          1,879

The loan agreements contain conditions for a minimum relation
between market values of vessels and loan liabilities. This
relationship was not met for all loan agreements as per December
31, 1998. As a result, security for certain vessel loans may need
to be strengthened.





                               110



<PAGE>

NOTE 16 - OTHER LONG-TERM LIABILITIES

                                           1998           1997
Due date, 1-5 years
  from accounting date                        -             88
                                           ----           ----
Total                                         -             88

Of the total amount outstanding at December 31, 1999, SEK 32
million consists of the minority shareholders' loans to
shipowning companies. Agreements reached with the shareholders
entail that these loans can be equated with minority interest in
the consolidated accounts.

NOTE 17 - ACCRUED EXPENSES AND DEFERRED INCOME

                                           1998           1997
Accrued expenses                            158            119
                                           ----           ----
Total                                       158            119

The Group's accrued expenses include provisions for estimated
future docking costs.

Note 18 - PLEDGED ASSETS - FOR LIABILITIES AND COMMITMENTS
TO CREDIT INSTITUTIONS

                                           1998           1997
Cash and bank balances                       40              -
Ship mortgages                            2,985          1,655
Shares in subsidiaries                        9             20
                                          -----          -----
Total                                     3,034          1,675

NOTE 19 - CONTINGENT LIABILITIES

                                           1998           1997
Guarantees and contingent liabilities        94             96
                                           ----           ----
Total                                        94             96

NOTE 20 - TONNAGE CHARTERED IN

Commitments for payment of charter hire for vessels chartered in,
provided call options are not exercised are as follows for the
years ended December 31:







                               111



<PAGE>

                                           1998           1997
1999                                         71             40
2000                                         71             36
2001                                         71              -
2002                                         65              -

NOTE 21 - SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN SWEDISH AND
U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated financial statements of the Company have been
prepared in accordance with Swedish Generally Accepted Accounting
Principles ("Swedish GAAP"). These accounting principles differ
in certain significant respects from U.S. Generally Accepted
Accounting Principles ("US GAAP"). The following is a summary for
the estimated adjustments under US GAAP that affect the Company's
consolidated net income for the year ended December 31, 1998 and
1997 and total consolidated shareholders' equity as of December
31, 1998 and 1997.

1.  LEASING

ICB in 1990 entered a leasing contract for a vessel. The leasing
terms were such that under US GAAP the lease would be classified
as a capital lease.  Although IAS 17 Accounting for Leases was
adopted as Swedish GAAP in 1997, the transition rules were such
that the standard was implemented only prospectively. ICB,
therefore, continued to account for the lease in question as if
it were an operating lease. In 1998, the leasing arrangement was
discontinued as ICB acquired the vessel. The purchase price was
somewhat less than the lease obligation.

In 1997, adjustments have been made to report the lease in
question as a capital lease. In 1998, adjustments have been made
to recognise a gain on extinguishment of the lease obligation and
the difference between Swedish GAAP and US GAAP depreciation
expense owing to the remaining difference in cost basis.

2.  ASSET REVALUATION

ICB in 1995 revalued certain of its vessels both upwards and
downwards, as was allowed under Swedish GAAP at that time, with
the intent to better align carrying values to fair values. The
downward adjustments were not required under US GAAP impairment
recognition rules. In subsequent years, depreciation was based on
such adjusted values as were any gains or losses arising on
disposal.

Under US GAAP, the historic cost basis may only be adjusted for
impairment losses and upward revaluations are not allowed.




                               112



<PAGE>

Adjustments have been made to state depreciation expense and
gains and losses based on historical cost.

3.  MARKETABLE SECURITIES

Under Swedish GAAP, current marketable securities are carried at
the lower of cost or market while non-current securities are
written-down for other than temporary declines in the market
value.

Under US GAAP, such investments which are classified as
available-for-sale securities are carried at fair value, with
resulting unrealised holding gains or losses, net of any deferred
taxes, recorded in a separate component of shareholders' equity.

Adjustments have been made to state the securities at fair value
and the holding gains and losses have been taken to equity.

4.  DEFERRED TAXATION

US GAAP requires that deferred taxes be provided for all
temporary differences and the recognition of deferred tax assets
subject to a realisation test under "the more likely than not"
concept. Swedish practice has evolved in the same direction, at
least in consolidated financial statements. The recognition of
deferred tax assets, however, generally has been subjected to the
more stringent "assured beyond reasonable doubt" criterion.

As, however, ICB generally operates in jurisdictions where
shipping income, including gains on disposals, is tax exempt the
issue of providing for deferred tax has generally not arisen, nor
do the above described adjustments to US GAAP require the
provision of deferred taxes.  The Swedish parent company and
certain other Swedish subsidiaries have unutilised tax loss-
carryforwards. No deferred tax assets have been recognised under
Swedish GAAP, not would they be recognised under US GAAP as
management believes it unlikely that these losses can be utilised
in the future.

5.  EARNINGS PER SHARE

US GAAP requires the reporting of basic and diluted earnings per
share. ICB has not issued any dilutive securities and thus
reports only basic earnings per share.

The abovementioned adjustments would affect reported consolidated
net income and shareholders' equity as follows.






                               113



<PAGE>

NET INCOME                             FOR THE YEARS ENDED
                                       DECEMBER 31
                                      1998               1997
Net income reported under
  Swedish GAAP                        165,165           288,580
Adjustments
Leasing of vessel                      39,891             9,494
Revaluation of assets                 (4,700)           (4,700)
Net income under US GAAP              200,356           293,374

Earnings per share (in SEK)              7.12             10.42










































                               114



<PAGE>

SHAREHOLDERS' EQUITY

                       Swedish GAAP Capital       Asset Marketable    US GAAP
                             Equity   Lease Revaluation Securities     Equity

December 31, 1996         2,042,867 (3,062)      73,153    (3,412)  2,109,546

Movements under
  Swedish GAAP
Net income                  288,580
Translation
  differences               253,477
Dividend                   (56,297)
                           --------
                            485,760                                   485,760

US GAAP Adjustments
Capital Lease
Income statement effect               9,494                             9,494
Translation adjustment                 (92)                              (92)
Asset Revaluation
Income statement effect                         (4,700)               (4,700)
Marketable Securities
Realised Loss                                                (504)      (504)
Unrealised holding gains                                    72,362     72,362
------------------------------------------------------------------------------
December 31, 1997         2,528,627   6,340      68,453     68,446  2,671,866

Movements under Swedish GAAP
Net income                  165,165
Translation differences      60,056
Dividend                   (77,408)
                           --------
                            147,813                                   147,813

US GAAP Adjustments
Capital Lease
Income statement effect              39,891                            39,891
Translation adjustment                  764                               764
Asset Revaluation
Income statement effect                         (4,700)               (4,700)
Marketable Securities
Realised Loss                                              (6,287)    (6,287)
Unrealised holding gains                                  (44,398)   (44,398)
------------------------------------------------------------------------------
December 31, 1998         2,676,440  46,995      63,753     17,761  2,804,949
------------------------------------------------------------------------------






                               115



<PAGE>

NEW U.S. ACCOUNTING STANDARDS NOT YET ADOPTED

In June 1997, two new standards effective for fiscal years
beginning after December 15, 1997 were issued, SFAS No. 130
"Reporting Comprehensive Income" and SFAS No. 131 "Disclosures
about Segments of an Enterprise and Related Information".  While
these standards will impact U.S. GAAP disclosure requirements,
they do not impact the reconciliation of net income and total
stockholders' equity as reported under Swedish GAAP and U.S.
GAAP, respectively.

SFAS No. 132 "Employers' Disclosures About Pensions and Other
Postretirement Benefits" was issued in February 1998 and is also
effective for fiscal years beginning after December 15, 1997. The
observation on the effects of the previous two standards also
applies to this new standard.

In June 1998, the Financial Accounting Standards Board issued
Statement Financial Accounting Standards No. 133 ("SFAS 133),
Accounting for Derivative Instruments and Hedging Activities.
This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an
entity recognise all derivatives as either assets or liabilities
in the statement of financial position and measure those
instruments at fair value. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999.
Management has not determined the effect of the adoption of SFAS
133.

STATEMENT OF CASH FLOWS

US GAAP requires the presentation of a statement of cash flows,
which is presented below for each of the years ended December 31,
1998 and 1997:


                                                1998        1997
Operating activities
  Net income                                     165         289
  Adjustments to reconcile net
  income to cash provided
  by operating activities
  Depreciation                                   245         171
  Result from sale of vessels                    (1)           -
  Write down of shares accounted
  for as non-current assets                       12           -
  Minority share                                (36)           8
  Change in operating assets and liabilities
  Current receivables                             45        (87)


                               116



<PAGE>

  Current liabilities                           (22)         195
  Other                                          13           31
                                           ---------   ---------
  Net cash provided by operating activities      421         607
                                           ---------   ---------

Investing activities
  Additions to vessels and
  newbuilding contracts                        (597)       (722)
  Investment in other securities accounted for as
  non-current assets                              38       (147)
                                           ---------   ---------
  Net cash provided by investing activities    (559)       (869)
                                           ---------   ---------

Financing activities
  Decrease/increase in long-term liabilities     696         241
  Increase/decrease in long-term receivables    (68)        (64)
  Dividend to shareholders                      (77)        (56)
                                           ---------   ---------
  Net cash used in financing activities          551       (121)
                                           ---------    --------
  Net increase (decrease) in cash
   and cash equivalents                          413       (141)
  Cash and cash equivalents at
   beginning of year                             609         750
  Cash and cash equivalents at end of year     1,022         609
                                           =========    ========

























                               117



<PAGE>

NOTE  22 - EMPLOYEES AND PAYROLL COSTS

Average number of
 employees                1998 Of whom, men     1997Of whom, men

Parent Company              13            8       12           7
Group companies
outside Sweden               7            2        3           2
                       -------      -------  -------     -------
Total Group                 20           10       15           9

Wages, Salaries and Other Remuneration; Social Security
Costs (SEK 000s)

                        1998         1998      1997       1997
                       Wages,       Social     Wages     Social
                       salaries    security  salaries   security
                      and other      cost    and other    cost
                    remuneration           remuneration
-----------------------------------------------------------------
Parent Company
Board of Directors         780                   780
  Of whom, the Chairman
  of the Board             140                   140
President                2,038                 2,104
Other employees          5,321                 5,020
                         -----     -----       -----       -----
Total, Parent Company    8,139     3,688       7,904       3,488
  Of which, pension costs          1,232                   1,049
Subsidiaries outside Sweden
Board of directors
  and president              -                     -
[6~Other employees       2,040                 1,177
                         -----     -----       -----

Total, subsidiaries      2,040       453       1,177         311
  Of which, pension costs            209                     193
                                   -----                   -----
Total, Group            10,179     4,141       9,081       3,799

Of the Parent Company's pension costs, SEK 279 million for the
year ended December 31, 1998 (1997: SEK 262 million) pertains to
the board of directors and president. The president's pension
terms are in accordance with the ITP plan (collective
supplementary pension plan for salaried employees). In the event
the Company serves notice, the president and executives are
entitled in certain circumstances to three years' salaries. A
committee consisting of the chairman of the board and two
directors make recommendations to the board on the salary and
remuneration for the president and executives. The president and
chairman receive directors' fees of USD 18,000 per year for their


                               118



<PAGE>

assignment with Knightsbridge Tankers Ltd. The Company has
purchased a special liability insurance for the Company's
directors and president. The premium amounted to SEK 3.35 million
for the year ended December 31, 1998.

















































                               119



<PAGE>

                          EXHIBIT INDEX

Exhibit
Number


3.1 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").











































                               120



<PAGE>

                           SIGNATURES

Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant certifies that it meets all
of the requirements for filing on Form 20-F and has duly caused
this annual report to be signed on its behalf by the undersigned,
thereunto duly authorised.

                                       Frontline Ltd.
                                       ------------------------
                                       (Registrant)


Date                                   June 28, 2000
                                       By /s/ Kate Blankenship
                                          ---------------------
                                              Kate Blankenship
                                              Company Secretary



































                               121



<PAGE>

                            EXHIBITS

Exhibit
Number


3.1 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").











































                               122



<PAGE>

Exhibit 3.1

                                                               II
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").

         WHEREAS, FL owns directly or through entities under its
direct or indirect control ("affiliates") the shares of ICB as
shown on Schedule I attached (the "FL ICB Shares"), Tankers owns
certain of the shares of ICB as shown on Schedule I ("Tankers
Owned Shares") and Tankers has entered into agreements entitling
it to acquire and under which it is authorised to release for
delivery to FL at the closing provided for in this Agreement
certain of the shares of ICB also as shown on Schedule I (the
"Deposited Shares") (Tankers Owned Shares and the Deposited
Shares being herein collectively called the "Tankers ICB
Shares"),

         WHEREAS, ICB is desirous that subsidiaries of ICB listed
in Schedule I (the "ICB Subsidiaries"), currently the owners of
the four vessels specified against their respective names on
Schedule I (the "Vessels"), sell the Vessels to Tankers designees
on the terms of agreements to be entered into at the Closing
(defined below), such agreements being in the form of Annexes A-D
(the "NSFs"), and Tankers is desirous that its designees acquire
the Vessels,

         WHEREAS, the parties hereto are desirous of carrying out
the other transactions provided for herein.

         NOW, THEREFORE, the parties hereto hereby agree as
follows:

1.  At a closing to be started simultaneously with the signing of
this Agreement (the "Closing")

(i)Tankers shall sell and Frontline AB shall buy all the Tankers
ICB Shares and the price for each class A share shall be US$
13.72 equivalent to SEK 112.58 and the price for each class B
share US$ 8.85 equivalent to SEK 72.58.

                The total purchase price for the Tankers ICB
Shares, US$ 39,163,623 plus SEK 136,397,596, shall be paid by
completed Payment Letters of Chase Manhattan International Ltd.,
in the form of Annexes E and F delivered to Skaninaviska Enskilda
Banken AB ("SEB") against valid registration of the Tankers ICB
Shares, free and clear of any pledge, lien, encumbrance or other
restriction, in FL's VP-account.



                               123



<PAGE>

                The transfer and payment shall be handled by SEB,
Stockholm in accordance with the Swedish securities settlement
system.  In order to facilitate and effect the transfer and
payment, Tankers, FL, ICB, Clarence Dybeck on behalf of Selling
Shareholders and Peter Hogstrom on behalf of JA Interests have
signed an Instruction Letter to SEB in the form of Annex G which
by its terms becomes irrevocable when the Closing begins, and the
parties will issue all other documents and take all other action
which are necessary in order to consummate the transactions
contemplated hereunder.  The instruction is only revocable by a
new instruction in writing signed by the signatories thereto.

    ICB shall cause the ICB Subsidiaries to sell the Vessels to
Tankers, or such subsidiaries of Tankers as are designated by
Tankers, in each case under the NSFs which Tankers shall cause to
be entered into at the Closing, for the respective amounts set
out in and payable as provided in such NSFs.  ICB hereby
guarantees the obligations of the respective ICB Subsidiaries
under Clause 9 of each NSF. Tankers confirms that it will remain
primarily liable as an obligor to ICB and the ICB Subsidiaries
(on whose behalf ICB hereby contracts as their agent) for the
performance of all of the NSFs by each subsidiary of Tankers
which is so designated.

2.  (a)  ICB, FL and Tankers intend that the transactions
contemplated by Clause 1 should be fulfilled at the Closing
commencing today, with delivery of ICB shares and shares of
Stockholm Chartering, ICB Scandinavia AB and Rederi AB Lovart,
satisfaction of the existing mortgages, transfer of the Vessels
and recording of new mortgages to occur on Monday September 27,
1999 with all payments to be made by payment letters for value on
Monday, September 27, 1999 and should in any event be fulfilled
in their entirety or not at all. In recognition that it will not
be possible by agreement between themselves or their affiliates
to reverse the sale of the Vessels under the NSFs without the
arrangements of new loan facilities to ICB, such parties
nevertheless agree that they will treat the Closing as a
simultaneous event.

    (b)  In order to implement such a simultaneous Closing, each
of ICB, FL and Tankers undertakes to the others of them before
and immediately upon execution of this Agreement to take all
necessary steps to demonstrate that all necessary documentation
has been signed in an agreed form, that the funds necessary to
make any necessary payments are available unconditionally (or
conditionally only upon execution of this Agreement and
transactions forming part of the Closing taking place) and that
the consents of any third parties required to enable such
transactions to occur have been obtained unconditionally and ICB,
FL and Tankers shall not be obliged to commence the Closing until



                               124



<PAGE>

each of them have confirmed that they are satisfied as to the
foregoing matters.

    (c)  The steps required to close the transactions
contemplated in Clause 1(a) shall be followed immediately by the
steps required to implement the sale of all four of the Vessels
on the terms of the NSFs.  If, notwithstanding Clause 2(b),
anything shall occur after the transfer of title of any of the
Vessels which shall prevent all of the transactions contemplated
by Clause 1 being fully implemented:

              FL and Tankers each shall be entitled to rescind
the transactions contemplated in Clause 1(a) and each of them
shall forthwith return, or procure the return of, any shares in
ICB and/or cash which shall have been paid or transferred to the
other or in accordance with its directions pursuant to this
Agreement; and

              ICB and Tankers each shall (x) be entitled to
rescind the sale of any of the Vessels under an NSF under which
title to the Vessel has not then passed to Tankers or its
designee and any documentation or other assets or cash which
shall have been paid or transferred to the other (or one of its
affiliates) shall be returned forthwith; and (y) as soon as
practicable thereafter, take any necessary steps to retransfer
back to ICB or such company as it may designate the Vessels in
respect of which title has passed from an ICB Subsidiary against
repayment of any purchase price paid to the relevant Tankers
subsidiary, and pending such retransfer but in no event later
than November 30, 1999, Tankers shall procure that the relevant
Vessels are operated by and for the exclusive benefit of ICB.

    (d)  If all that is required to occur at the Closing has not
then occurred, then, at the request of any of FL, Tankers or ICB
given in writing to the others of them at any time after the
close of business in New York on September 27, 1999, FL, Tankers
and ICB shall take all steps necessary to rescind and reverse all
that has to that time occurred under this Agreement and the NSFs
in accordance with Clause 2(c), without prejudice to the rights
of any party to this Agreement or any NSF due to any breach by
any other party of its obligations under this Agreement or any
NSF or to the rights of any party to the Standstill Agreement
signed August 6, 1999 by Hemen Holdings ("Hemen"), Obelia Finance
Company ("Obelia"), Ola Lorentzon and Clarence Dybeck, as
extended, or to the Letter of Intent dated August 6, 1999 between
Hemen and Obelia, in either case due to any breach by any party
thereto of its obligations thereunder.

    (e)  In the event the Closing does not occur, Tankers will
cause the Deposited Shares to be redelivered to the current
holders of such shares in exchange for the Tankers Shares issued


                               125



<PAGE>

therefor, and the Shareholders Agreement between John
Angelicoussis, the several persons whose details were set out on
the appendix thereto and Obelia, dated 17th and 23rd February
1998 in respect of shares of ICB will be effective in respect of
such ICB shares.

    (f)  The parties (other than the Agent) agree that in the
event one or more of the Vessels  become a total or a
constructive total loss prior to delivery under the relevant
NSFs, the parties shall procure that the relevant Tankers
subsidiary (ies) will pay for the Vessel(s) which become such as
herein provided as if the same had not occurred, against an
assignment of the hull and  machinery insurance payable in
respect of such event, free of claims by the relevant ICB selling
company (ies)', mortgagee(s) and any other third party claims.

3.       At and as part of the Closing FL shall execute and
deliver to ICB an undertaking in the form attached hereto as
Annex H.

4.  (a)  Each party to this Agreement (other than the Agent)
represents and warrants to each other party to this Agreement
that such party is duly organised and validly existing under the
laws of its jurisdiction of incorporation, that its execution and
delivery of this Agreement and the performance by it of its
obligations hereunder has been duly authorised by all requisite
corporate action, and that the performance of its obligations
under this Agreement is enforceable by the respective parties
hereto entitled to enforce the same in accordance with their
respective terms.

     (b)      Tankers represents and warrants to FL that the ICB
Shares when sold and delivered as provided herein will be owned
by FL free and clear of any pledge, lien, encumbrance or other
restriction.

     (c)      ICB represents and warrants to Tankers that each
ICB Subsidiary which sells and delivers a Vessel to a Tankers'
designee under an NSF has been duly organised and is validly
existing under the laws of the jurisdiction of its incorporation,
that the sale of a Vessel by each such Subsidiary in accordance
with the NSF has been duly authorised by all requisite corporate
action and that the execution and delivery and performance of its
obligations under the NSF is enforceable by the respective
Tankers Subsidiary to which the Vessel is sold in accordance with
the terms thereof.

     (d)      Tankers represents and warrants to ICB in relation
to each Tankers' designee in the same terms as the previous
sentence, mutatis mutandis and that its Board has approved the
giving of indemnities in favor of ICB Board members and officers


                               126



<PAGE>

contemplated hereby without involving in the decision any person
who is a member of ICB's Board.

     (e) The representations and warranties in this Agreement and
in the NSFs shall survive the Closing.

5.  (a)   At and as part of the Closing, FL and ICB shall, and
Tankers shall cause Obelia to enter into a settlement agreement
in the form of Schedule III in respect of the Share Acquisition
Agreement relating to the sale and purchase of the share capital
of Astro Tankers Limited dated 23 February 1998 (as amended) and
FL shall indemnify and hold harmless ICB, Tankers and Obelia and
their directors and officers from all costs, expenses (including
legal fees) and liabilities resulting from any claims that such
settlement agreement is improper, whatever the reason.

    (b)  At and as part of the Closing, FL undertakes to the
Agent (acting as agent and trustee for the Releasees described
therein) that it will execute and deliver to the Releasees
thereunder, and Tankers undertakes to the Agent (acting as agent
and trustee for the Releasees described therein) that it will and
will cause Obelia to, execute and deliver to the Releasees
thereunder, the respective Releases attached hereto as Schedules
II (a), (b) and (d), each fully executed as contemplated thereby,
and Clarence Dybeck as attorney-in-fact as indicated therein
undertakes to execute and deliver to the Releasees thereunder the
Releases contemplated by Schedule (c) hereto, each fully executed
as contemplated thereby.   Each of FL, Tankers (for itself and
the present and prospective shareholders of Tankers) and Clarence
Dybeck as such attorney-in-fact undertakes to the Agent (acting
as agent and trustee for each person who is or has been a
director of ICB or any of its subsdiaries in office at any time
in respect of which a valid release has not previously been given
at any annual general meeting of ICB or any such other company
(each an "Unreleased Board Member")) that they will execute and
deliver to each Unreleased Board Member a release in the case of
FL and Tankers in the form of Schedule II(d) and, in the case of
Clarence Dybeck, in the form of Schedule (c).

    (c)  At and as part of the Closing, each party hereto shall
deliver the opinion of its counsel to the effects required by the
lenders to the Tankers' designees of the loans to be made at the
Closing to finance in part the purchase of the Vessels by such
designees at the Closing.

6.       At and as part of the Closing,

[6~ (a)  ICB and Tankers shall execute, deliver and perform the
agreement on the sale of shares in Stockholm Chartering AB in the
form of ScheduleV to this Agreement,



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<PAGE>

    (b)  Tankers shall enter into the Stockholm Chartering
Shareholders' Agreement in the form of Schedule VI to this
Agreement,

    (c)  ICB and Tankers shall execute, deliver and perform the
agreement on the sale of shares in ICB Scandivania AB and in
Rederi AB Lovart in the form of Schedule VII to this Agreement,
and

    (d)  FL shall, and Tankers shall procure that John
Angelicoussis shall execute and deliver, each to the other the
Settlement Agreement in respect of High Tree Investment Company
in the form of Schedule VIII to this Agreement, and

    (e)  FL shall procure that High Tree Investment Company
executes and delivers the Undertaking in the form of Schedule IX
to this Agreement.

7.  (a)  FL undertakes to Ola Lorentzon, acting as agent and
trustee of the ICB employees named on Schedule IV attached, that
FL shall cause ICB from and after the Closing to retain such
employees under the agreements attached to and as indicated in
such Schedule and FL shall sign each of the same.

    (b)  FL agrees with the other parties hereto to vote its ICB
shares, including those acquired from Tankers as contemplated
hereby, at a general meeting of shareholders of ICB to be held
before October 31, 1999 in favour of ratifying the ICB Board's
decision to enter into and perform its obligations under this
Agreement, including the sale of the Vessels to Tankers or its
designees as contemplated hereby, and confirms that it supports
such decision.

8.  (a)  Each of FL and Tankers severally undertakes to Ola
Lorentzon, acting as agent and trustee of all present and past
officers and directors of ICB and any of its subsidiaries, that
it agrees for itself and its affiliates (including, but not
limited to, in the case of FL, Hemen and,  in the case of
Tankers, Obelia, and the shareholders of such entities) that from
and after the date of this Agreement it will make no claim, and
procure that no party it controls or which controls it or with
which it is otherwise affiliated will make any claim, against any
person who is or has ever been a director or officer of ICB or
any of its subsidiaries, or an employee, agent or adviser of any
such entity, in respect of his acts or omissions in such capacity
(except for any claim for breach of this Agreement or agreements
entered into as contemplated hereby).

    (b)  FL and Tankers further agree, whether or not the Closing
occurs, to compensate ICB for ICB's reasonable costs incurred in
relation to this Agreement and the NSFs and to indemnify ICB and,


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as provided in Releases in the form of Schedule II(d), its
directors and officers for any claims brought against any of them
following the date of this Agreement in respect of their acts or
omissions in respect of FL, Obelia, Tankers or any of their
affiliates, such compensation and indemnification to be in the
ratio of 75% from FL and 25% from Tankers (except that neither FL
or Tankers shall be obligated to indemnify for claims brought by
the other or the others' affiliates or for claims for breach of
this Agreement or agreements entered into as contemplated
hereby).

    (c)  FL agrees with Ola Lorentzon, acting as agent and
trustee of the ICB Board members and ICB's managing director and
any other person who is an Unreleased Board Member, that, if the
Closing occurs, FL shall vote FL's ICB shares at the next ICB AGM
in favour of discharging the ICB Board members and ICB's managing
director and any such Unreleased Board Member from all
liabilities and claims in respect of the fiscal year 1999.

9.       All notices and other communications under this
Agreement shall be sufficiently given if in writing and delivered
personally or, to the extent receipt by the addressee is
confirmed, sent by documented overnight delivery service,
telecopy or other electronic transmission service to the
appropriate party at the address or number set forth below or as
changed by any party by notice hereunder to the others specified
below.

If to FL:

              Frontline Management AS
              P. O. Box 1327 Vika
              N-0112  OSLO
              Norway
              Attn.:  Tor Olav Troim
              Telecopy No.:  47-23-11-40-40
              Attn.:  Tor Olav Troim

with a copy to:

              Stefan Lindskog
              Wistrand Advokatbyra
              World Trade Center
              Klarabergsviadukten 70, uppg. D, plan 6
              Box 70 393
              S-107 24
              Stockholm, Sweden
              Telecopy No.:  468-507-30000





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<PAGE>

If to Tankers, to it:

              c/o Agelef Shipping Co (London) Ltd
              Manning House
              22 Carlisle Place
              London SW1P lJA, England
              Attn.:  The Chairman
              Telecopy No.:  44-207-828-0070
              Attn.:  The Chairman

with a copy to:

              Peter Hogstrom
              Lagerof and Leman
              Strandvagen 7a
              Box 5402
              S-114 84
              Stockholm, Sweden
              Telecopy No.:  468-667-6883

              and

              John F. Fritts
              Cadwalader, Wickersham & Taft
              100 Maiden Lane
              New York, NY 10038
              U.S.A.
              Telecopy No.:  212-412-7079

If to ICB:

              ICB Shipping AB
              P.O. Box 7007
              S-10386
              Stockholm, Sweden
              Attn.:  Ola Lorentzon
              Telecopy No.:  46-8-613-9909

with a copy to:

              Charles Walford
              Watson, Farley & Williams
              15 Appold Street
              London EC2A 2HB, United Kingdom
              Telecopy No.: 44-171-814-8141








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<PAGE>

If to Ola Lorentzon:

              c/o ICB Shipping AB
              P.O. Box 7007
              S-10386
              Stockholm, Sweden
              Attn.:  Ola Lorentzon
              Telecopy No.:  46-8-613-9909

10. (a)   This Agreement and its Schedules, the NSFs and the
documents delivered in accordance herewith and therewith contain
the entire agreement and understanding of the parties in respect
of the subject matter of this Agreement and such schedules, NSFs
and documents.  Neither ICB nor any of its subsidiaries is party
to any other or collateral agreement, undertaking or warranty in
any way, directly or indirectly, connected with such matters.

    (b)  This Agreement and its schedules may be amended only by
a writing signed by the parties hereto.

    (c)  This Agreement and its schedules shall be governed by
and construed in accordance with the laws of England without
regard to England's laws in respect of conflicts of law.

    (d)  Any dispute among FL, Tankers and ICB in respect of this
Agreement and such schedules not resolved by agreement shall be
resolved exclusively by confidential arbitration in London under
the Rules of the London Court of International Arbitration as in
effect on the date the arbitration commences, conducted in
English in front of three arbitrators, one selected by each such
party to this Agreement who is involved in such dispute, or,
where only two of such parties are involved, the third arbitrator
shall be selected by the two so selected.  The arbitrators shall
have no authority to amend this Agreement or any schedule
directly or indirectly.  Any decision by two or more of the
arbitrators may be entered as a judgement in any court having
jurisdiction.  Each of the parties hereby submits to the non-
exclusive jurisdiction of the Courts of England with respect to
any action or proceeding in which judgement upon any arbitral
award is sought to be enforced.

    (e)  The parties each acknowledge that none of them would
have an adequate remedy at law for money damages if this
Agreement or the NSFs were not performed in accordance with their
terms and therefor agree, the exclusivity element of the above
arbitration provision to the contrary notwithstanding, that each
party to this Agreement and the NSFs shall be entitled to
specific performance of this Agreement and the NSFs by temporary
restraining order, or preliminary or permanent affirmation or
negative injunction, or the functional equivalent to any thereof,
in any court having jurisdiction prior to or after the


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<PAGE>

commencement of any such arbitration proceeding and in addition
to any remedy to which any party is entitled in any arbitration
proceeding


















































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