UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                   FORM 40-F

   [_]   Registration Statement pursuant to section 12 of the Securities
         Exchange Act of 1934

   [X]   Annual report pursuant to section 13(a) or 15(d) of the Securities
         Exchange Act of 1934


For the fiscal year ended December 31, 2005    Commission File Number:333-90736

                            WESTERN OIL SANDS INC.
            (Exact name of Registrant as specified in its charter)


                                    ALBERTA
       (Province or other jurisdiction of incorporation or organization)

                                     1311
           (Primary Standard Industrial Classification Code Numbers)

                                NOT APPLICABLE
            (I.R.S. Employer Identification Number (if applicable))

                2400 ERNST & YOUNG TOWER, 440-2ND AVENUE S.W.,
                      CALGARY, ALBERTA, CANADA, T2P 5E9
                           TELEPHONE: (403) 233-1700
  (Address and telephone number of Registrant's principal executive offices)

        CT CORPORATION SYSTEM, 111-8TH AVENUE, NEW YORK, NEW YORK 10011
                                (212) 894-8940
           (Name, address (including zip code) and telephone number
       (including area code) of agent for service in the United States)

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                     None

SECURITIES  REGISTERED  OR TO BE  REGISTERED  PURSUANT TO SECTION 12(G) OF THE
ACT: TITLE OF EACH CLASS:            None

SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(D)
OF THE ACT:

 The Registrant is a "voluntary filer" and files annual reports on Form 40-F,
   amendments to such reports and furnishes information on Form 6-K to the
  Securities and Exchange Commission, pursuant to its obligations under its
indenture dated April 23, 2002 relating to its 8 3/8% Senior Secured Notes due
                                 May 1, 2012

FOR ANNUAL REPORTS, INDICATE BY CHECK MARK THE INFORMATION FILED WITH THIS
FORM:

       [X] Annual information form      [X] Audited annual financial statements

  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.

         160,518,041 Common Shares outstanding as of December 31, 2005

Indicate by check mark whether the Registrant is furnishing the information
contained in this Form to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934 (the "Exchange Act"). If "Yes" is marked,
indicate the filing number assigned to the Registrant in connection with such
Rule.

              Yes [_]                  No [ X ]


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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 [_]

<PAGE>

PRINCIPAL DOCUMENTS

The following documents have been filed as part of this Annual Report on Form
40-F:


A.       ANNUAL INFORMATION FORM

For the Annual  Information  Form of  Western  Oil Sands  Inc.  ("Western  Oil
Sands") for the year ended  December  31,  2005,  see Exhibit 1 of this Annual
Report on Form 40-F.

B.       AUDITED ANNUAL FINANCIAL STATEMENTS

For Western Oil Sands' consolidated  audited financial statements for the year
ended December 31, 2005 and 2004,  including the auditor's report with respect
thereto,   see  Exhibit  2  of  this  Annual  Report  on  Form  40-F.   For  a
reconciliation  of important  differences  between  Canadian and United States
generally  accepted  accounting  principles,  see Note 21 of the  Notes to the
Consolidated Financial Statements.

C.       MANAGEMENT'S DISCUSSION AND ANALYSIS

For Western Oil Sands' Management's Discussion and Analysis for the year ended
December 31, 2005, see Exhibit 3 of this Annual Report on Form 40-F.

CONTROLS AND PROCEDURES

Western Oil Sands  maintains  disclosure  controls and procedures and internal
control over financial reporting designed to ensure that information  required
to be disclosed in the reports  filed under the Exchange  Act, as amended,  is
recorded, processed, summarized and reported within the time periods specified
in the Commission's  rules and forms.  Western Oil Sands' principal  executive
and  financial  officers  evaluated  the  effectiveness  of Western Oil Sands'
disclosure controls and procedures as of the end of the period covered by this
report  and  concluded  that  such  disclosure  controls  and  procedures  are
effective  to  ensure  that  information  required  to  be  disclosed  by  the
Registrant  in reports that it files or submits  under the Exchange Act is (i)
recorded, processed, summarized and reported within the time periods specified
and  (ii)  accumulated  and  communicated  to  the  Registrant's   management,
including its principal  executive officer and principal financial officer, to
allow timely decisions regarding required disclosure.  However, as recommended
by the Commission in its adopting  release,  the  Registrant  will continue to
periodically  evaluate its  disclosure  controls and procedures to ensure that
information is recorded,  processed,  summarized and reported  within the time
periods specified in the Commission's rules and forms.

It should be noted that while the Registrant's principal executive officer and
principal financial officer believe that the Registrant's  disclosure controls
and  procedures  provide  a  reasonable  level  of  assurance  that  they  are
effective,  they do not expect that the Registrant's  disclosure  controls and
procedures  or internal  control  over  financial  reporting  will prevent all
errors and fraud. A control system,  no matter how well conceived or operated,
can provide only  reasonable,  not absolute,  assurance that the objectives of
the control system are met.

During  the fiscal  year ended  December  31,  2005,  there were no changes in
Western  Oil Sands'  internal  controls  over  financial  reporting  that have
materially  affected,  or are reasonably likely to materially affect,  Western
Oil Sands' internal control over financial reporting.

AUDIT COMMITTEE FINANCIAL EXPERT

The  Registrant's  Board of  Directors  has  determined  that  Messrs.  Robert
Puchniak, Randall Oliphant and Mac Van Wielingen are audit committee financial
experts (as defined in paragraph  8(b) of General  Instruction B to Form 40-F)
serving  on its audit  committee.  Pursuant  to  paragraph  8(a)(2) of General
Instruction  B  to  Form  40-F,  the  Board  has  applied  the  definition  of
independence  applicable to the audit committee  members of the New York Stock
Exchange ("NYSE") listed companies.  All above mentioned members are corporate
directors and

<PAGE>

meet the NYSE  definition  of  independence.  For a  description  of the Audit
Committee member's relevant  experience in financial matters,  see the section
"Directors and Officers" in the Registrant's  Annual  Information Form for the
year ended  December 31,  2005,  which is included as Exhibit 1 to this Annual
Report on Form 40-F.

AUDIT COMMITTEE

Western  Oil  Sands  has a  separately  designated  standing  audit  committee
established  in accordance  with section  3(a)(58)(A) of the Exchange Act. The
members  of the  Audit  Committee  are  Messrs.  Robert G.  Puchniak,  Randall
Oliphant and Mac H. Van Wielingen. Mr. Puchniak chairs the Audit Committee.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

PricewaterhouseCoopers LLP ("PWC") have been the auditors of Western Oil Sands
since Western Oil Sands'  inception.  The aggregate  amounts billed by PWC for
each of the last two fiscal years for audit fees, audit-related fees, tax fees
and all other fees, including expenses, are set forth below.

         AUDIT FEES: The aggregate fees billed for each of the last two fiscal
years of Western Oil Sands ending December 31, 2005 and December 31, 2004, for
professional  services  rendered by PWC for the audit of its annual  financial
statements,  review of the Annual Information Form,  Management Discussion and
Analysis, completion of limited reviews of quarterly financial information and
for services  that are normally  provided by PWC in  connection  with debt and
equity   financings  for  those  fiscal  years  were  $146,396  and  $131,980,
respectively.

         AUDIT-RELATED  FEES:  There were no fees  billed for each of the last
two fiscal years of Western Oil Sands,  ending  December 31, 2005 and December
31, 2004, for audit-related services by PWC.

         TAX FEES:  The aggregate  fees billed for each of the last two fiscal
years of Western Oil Sands,  ending  December  31, 2005 and December 31, 2004,
for professional  services rendered by PWC for tax-related services consisting
of advice and  assistance  with tax filings and tax audits were  $133,108  and
$24,960, respectively.  Western Oil Sands' Audit Committee approved all of the
noted services.

         ALL OTHER FEES:  There were no other fees billed for each of the last
two fiscal  years of Western Oil Sands  ending  December 31, 2005 and December
31, 2004.

         AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES:

The  Registrant  has not yet  established  set  policies  and  procedures  for
pre-approval  of  audit  and  non-audit  related  services  conducted  by  the
Registrant's  accountant.  At the present time, all such services are approved
by the Chair of the Audit Committee before an engagement is executed.

OFF-BALANCE SHEET ARRANGEMENTS

Western  Oil  Sands  has  no  off-balance  sheet   arrangements  that  require
disclosure.



<PAGE>

CONTRACTUAL OBLIGATIONS

Western Oil Sands has assumed various contractual  obligations and commitments
in the  normal  course of its  operations.  Summarized  below are  significant
financial  obligations  that are  known as of  February  16,  2006,  and which
represent future cash payments that Western Oil Sands will be required to make
under  existing  contractual  agreements  that  it  has  entered  into  either
directly,  or as a partner in the Joint Venture. The following information can
also be found in Western's  Management  Discussion  and  Analysis  attached as
Exhibit 3.

<TABLE>
<CAPTION>
                                                               Payments Due By Period
                                         <1 Year    1 - 3 Years      4 - 5 Years      After 5 Years            Total
--------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>              <C>              <C>               <C>
US$450 Million Senior Secured Notes   $        -    $         -      $         -      $     524,655     $    524,655
Revolving Credit Facility (1)                  -              -                -             41,000           41,000
Obligations Under Capital Lease            1,340          2,680            2,680             43,566           50,266
Option Premium Liability                       -         95,642                -                  -           95,642
Feedstocks                               106,423        128,758           18,242             64,138          317,561
Pipelines and Utilities                   39,715         68,337           69,890            556,036          733,978
Mobile Equipment Lease                     3,647         11,941           26,740                  -           42,328
--------------------------------------------------------------------------------------------------------------------
Total Contractual Obligations         $  151,125    $   307,358      $   117,552      $   1,229,395     $  1,805,430
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  THE  REVOLVING  CREDIT  FACILITY  IS  A  3-YEAR  BANK  FACILITY  MATURING
     INITIALLY  ON OCTOBER  31,  2008,  EXTENDIBLE  ANNUALLY  AT THE  LENDERS'
     DISCRETION. MANAGEMENT CONSIDERS THIS TO BE PART OF OUR LONG-TERM CAPITAL
     STRUCTURE.

(2)  IN  ADDITION,  WE  HAVE AN  OBLIGATION  TO FUND  WESTERN'S  SHARE  OF THE
     PROJECT'S  PENSION  FUND AND HAVE MADE  COMMITMENTS  RELATED  TO OUR RISK
     MANAGEMENT  PROGRAM:   SEE  NOTES  17  AND  18,   RESPECTIVELY,   OF  THE
     CONSOLIDATED FINANCIAL STATEMENTS.


CODE OF ETHICS

The  Company has  adopted a Code of Conduct  and  Conflict of Interest  Policy
which applies to directors, officers, employees,  contractors and consultants.
This Code deals with such matters as compliance  with applicable  laws,  rules
and  regulations,  compliance with Western's  policy  addressing  treatment of
confidential  information  in addition  to several  other  pertinent  areas of
focus. The complete Policy is available on the Company's website.

UNDERTAKING

Western Oil Sands  undertakes  to make  available,  in person or by telephone,
representatives  to respond to inquiries made by the Commission  staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities  registered  pursuant to Form 40-F; the securities
in  relation  to which the  obligation  to file an annual  report on Form 40-F
arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

The Company has  previously  filed a Form F-X in connection  with the class of
securities in relation to which the obligation to file this report arises.

Any  change to the name or  address  of the agent for  service  of  process of
Western  Oil Sands shall be  communicated  promptly  to the  Commission  by an
amendment  to the  Form  F-X  referencing  the  file  number  of the  relevant
registration statement.


<PAGE>

                                  SIGNATURES

Pursuant  to the  requirements  of the  Exchange  Act,  Western Oil Sands Inc.
certifies  that it meets all of the  requirements  for filing on Form 40-F and
has  duly  caused  this  Annual  Report  to be  signed  on its  behalf  by the
undersigned, thereto duly authorized.

Dated this 28th day of March, 2006.

                                  WESTERN OIL SANDS INC.



                                  By: /s/ David A. Dyck
                                      ------------------------------------------
                                      Name:  David A. Dyck
                                      Title: Senior Vice President, Finance, and
                                             Chief Financial Officer





<PAGE>

Documents filed as part of this report:

                                 EXHIBIT INDEX

EXHIBIT NO.     DESCRIPTION
-----------     -----------

    1.       Annual  Information  Form for the fiscal year ended  December 31,
             2005.

    2.       Consolidated  Financial  Statements  for the fiscal  years  ended
             December 31, 2005 and 2004  including  U.S.  GAAP  reconciliation
             note, together with the auditors' report thereon.

    3.       Management's  Discussion  and  Analysis for the fiscal year ended
             December 31, 2005.

    4.       Certification  of  Chief  Executive   Officer  pursuant  to  Rule
             13a-14(a) or 15d-14 of the Securities Exchange Act of 1934.

    5.       Certification  of  Chief  Financial   Officer  pursuant  to  Rule
             13a-14(a) or 15d-14 of the Securities Exchange Act of 1934.

    6.       Certification  of  Chief  Executive   Officer  pursuant  to  Rule
             13(a)-14(b)  and  Section  1350 of  Chapter 63 of Title 18 of the
             United States Code (18 U.S.C. 1350).

    7.       Certification  of  Chief  Financial   Officer  pursuant  to  Rule
             13(a)-14(b)  and  Section  1350 of  Chapter 63 of Title 18 of the
             United States Code (18 U.S.C. 1350).

    8.       Consent  of  PricewaterhouseCoopers  LLP,  independent  chartered
             accountants.

    9.       Consent of GLJ Petroleum Consultants Ltd.,  independent petroleum
             engineering consultants.

    10.      Consent of Norwest  Corporation,  independent  mining engineering
             consultants.