<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                       ----------------------------------

                                    FORM 10-Q

(Mark One)
|X|      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001

                                       OR

|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 For the transition period from ___________ to  ___________

                         Commission File Number 0-29796


                         MARINE SHUTTLE OPERATIONS INC.
                         ------------------------------
             (Exact name of Registrant as Specified in Its Charter)


            Nevada                                         91-1913992
---------------------------------              ---------------------------------
 (State or Other Jurisdiction of                         I.R.S. Employer
  Incorporation or Organization)                        Identification No.)


Luramyrveien 29, Sandnes, Norway                              4391
---------------------------------              ---------------------------------
     (Address of Principal                                 (Zip Code)
       Executive Offices)


Registrant's Telephone Number, Including Area Code (47) 51962300


     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 _


The number of outstanding shares of the issuer's common stock at November 14,
2001 was 58,304,346.


<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                                    FORM 10-Q

                                TABLE OF CONTENTS


<TABLE>
<S>             <C>                                                                                            <C>
PART I.         FINANCIAL INFORMATION....................................................................         3

ITEM 1.         FINANCIAL STATEMENTS (UNAUDITED).........................................................         3

                CONSOLIDATED BALANCE SHEETS..............................................................         3

                CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS...................................         4

                CONSOLIDATED STATEMENTS OF CASH FLOWS....................................................         5

                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS...........................................         6

ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS...............................................................................        10

ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...............................        15


PART II.        OTHER INFORMATION........................................................................        16

ITEM 2.         CHANGES IN SECURITIES AND USE OF PROCEEDS................................................        16

ITEM 3.         DEFAULTS UPON SENIOR SECURITIES..........................................................        16

ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K.........................................................        16

SIGNATURES...............................................................................................        17
</TABLE>



                                       2
<PAGE>

                                     PART I.

                              FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
                           CONSOLIDATED BALANCE SHEETS
                                 (U.S. Dollars)

<TABLE>
<CAPTION>
                                                                                     September 30,        December 31,
                                                                                         2001                 2000
                                                                                    ---------------     ---------------
                                                                                      (unaudited)
<S>                                                                                 <C>                 <C>
ASSETS
CURRENT ASSETS
 Cash and cash equivalents                                                          $        51,150     $       203,207
 Restricted cash                                                                             12,614              21,863
 Accounts receivables                                                                          --                28,270
 Other current assets                                                                       209,656              56,804
                                                                                    ---------------     ---------------
 Total Current Assets                                                                       273,420             310,144

 Property, plant and equipment, net                                                       6,635,025           6,445,875
 Debt issue cost                                                                          2,136,444           1,936,867
 Goodwill, net                                                                           23,365,960          25,925,553
 Patents and agreements, net                                                              2,465,483           2,712,464
                                                                                    ---------------     ---------------

 TOTAL ASSETS                                                                       $    34,876,332     $    37,330,903
                                                                                    ===============     ===============

 LIABILITIES AND SHAREHOLDERS` EQUITY
 Current Liability
 Accounts payable                                                                   $       847,957     $       847,868
 Notes payable                                                                            3,675,000           4,900,000
 Other current liabilities                                                                1,022,081             754,100
                                                                                    ---------------     ---------------
 Total current liabilities                                                                5,545,038           6,501,968

 Long Term Debt                                                                             450,359             265,312

 Contingency (Note 2)

 SHAREHOLDERS' EQUITY
 Authorized 75,000,000 common shares with a par value of $0.001. Issued and
 outstanding 58,304,346, and 44,463,356 common shares with a par value of $0.001
 at September 30, 2001 and December 31, 2000 respectively                                    58,304              44,463
 Other paid in capital                                                                   52,971,103          50,292,949
 Deficit accumulated during the development stage                                       (23,306,877)        (18,933,079)
 Accumulated other comprehensive loss                                                      (841,595)           (840,710)
                                                                                    ---------------     ---------------
 Total shareholders' equity                                                              28,880,935          30,563,623

 TOTAL LIABILITIES AND SHAREHOLDERS'
 EQUITY                                                                             $    34,876,332     $    37,330,903
                                                                                    ===============     ===============
</TABLE>


See accompanying notes to consolidated financial statements.



                                       3
<PAGE>


                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
             CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
                                 (U.S. Dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                         Cumulative to
                                         September 30,
                                             2001                  Three Months Ended                     Nine Months Ended
                                          from date of                September 30,                         September 30,
                                           inception       ----------------------------------    ----------------------------------
                                         May 23, 1997            2001               2000              2001               2000
                                        ---------------    ---------------    ---------------    ---------------    ---------------

<S>                                     <C>                <C>                <C>                <C>                <C>
Operating revenues                      $       390,360    $          --      $       108,536    $        50,759    $       108,536
                                        ---------------    ---------------    ---------------    ---------------    ---------------

OPERATING EXPENSES
 Personnel costs                              3,800,509            236,233            492,338            802,382          1,029,313
 Legal, audit and advisory services           2,249,794             18,255             59,201            188,276            289,818
 Cost of cancelled financing                    606,721               --                 --                 --                 --
 General and administrative                   2,597,216             73,328            170,023            232,125            547,879
 Marketing                                    1,197,395             19,322             37,624             77,013            142,176
 Technical development                          581,473               --                 --                 --               29,197
 Depreciation                                   217,401              3,525             27,982             32,204             65,211
 Amortization - goodwill and
  intangibles                                12,832,175          1,023,553          1,016,899          3,062,049          2,985,838
 Loss on investment                              90,000               --                 --                 --                 --
 Currency exchange loss (gain)                  (13,834)               560             (8,082)               848            (14,655)
                                        ---------------    ---------------    ---------------    ---------------    ---------------

 Total operating expenses               $    24,158,850    $     1,374,776    $     1,795,985    $     4,394,897    $     5,074,777
                                        ---------------    ---------------    ---------------    ---------------    ---------------

 Interest expense, net of capitalized           181,130             13,130             15,996             36,207             24,494
 Interest income                                (90,225)              (935)            (1,390)            (6,545)            (9,253)

 Net loss before minority interest      $   (23,859,395)   $    (1,386,971)   $    (1,702,055)   $    (4,373,800)   $    (4,981,482)
                                        ---------------    ---------------    ---------------    ---------------    ---------------

 Minority interest                             (552,518)              --                 --                 --             (225,927)
                                        ---------------    ---------------    ---------------    ---------------    ---------------

 Net loss                               $   (23,306,877)   $    (1,386,971)   $    (1,702,055)   $    (4,373,800)   $    (4,755,555)
                                        ===============    ===============    ===============    ===============    ===============

 Other comprehensive income/(loss):
  Accumulated other comprehensive
  income/(loss)                                (841,595)           275,982           (371,718)              (885)          (627,553)
                                        ---------------    ---------------    ---------------    ---------------    ---------------

 Comprehensive loss                     $   (24,148,472)   $    (1,110,989)   $    (2,073,773)   $    (5,383,108)   $    (4,374,685)
                                        ---------------    ---------------    ---------------    ---------------    ---------------

 Basic and diluted loss per share                          $         (0.02)   $         (0.04)   $         (0.08)   $         (0.11)
                                                           ===============    ===============    ===============    ===============

 Basic and diluted weighted average
  shares outstanding                                            57,971,013         43,988,356         54,679,792         42,399,799
                                                           ===============    ===============    ===============    ===============
</TABLE>


See accompanying notes to consolidated financial statements.



                                       4
<PAGE>

                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (U.S. Dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                           Cumulative to
                                                                         September 30, 2001             Nine Months Ended
                                                                           from date of                   September 30,
                                                                            inception         -----------------------------------
                                                                           May 23, 1997            2001                2000
                                                                          ---------------     ---------------     ---------------

<S>                                                                       <C>                 <C>                 <C>
OPERATING ACTIVITIES
Net Loss                                                                  $   (23,306,877)    $    (4,373,800)    $    (3,053,501)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization                                                  13,049,575           3,094,253           2,006,168
Minority interest                                                                (552,517)               --              (225,927)
Loss on investment                                                                 90,000                --                  --
Loss on disposals of assets                                                         5,708                --                  --
Unrealized gain on foreign currency                                                33,847                  97              (6,573)
Changes in working capital:
Accounts receivable                                                                  --                28,270              38,619
Other current receivables and restricted cash                                    (222,268)           (143,604)            (58,909)
Accounts payable                                                                  847,957                  89            (486,446)
Other current liabilities                                                         988,234             267,884             491,080
                                                                          ---------------     ---------------     ---------------
Net cash used in operating activities                                     $    (9,066,341)    $    (1,126,811)    $    (1,295,488)
                                                                          ---------------     ---------------     ---------------

INVESTING ACTIVITIES
Investments                                                                      (100,000)               --                  --
Capital expenditures                                                           (5,745,181)           (244,961)           (913,870)
Proceeds on sale of investment                                                     55,196                --                  --
Advance to Marine Shuttle Operations AS                                          (249,986)               --                  --
Acquisition of Marine Shuttle Operations AS                                       416,635                --                  --
Advance to Offshore Shuttle AS                                                   (100,000)               --                  --
Acquisition of Offshore Shuttle AS                                                482,476                --                  --
                                                                          ---------------     ---------------     ---------------
Net cash used in investing activities                                     $    (5,240,860)    $      (244,961)    $      (913,870)
                                                                          ---------------     ---------------     ---------------

FINANCING ACTIVITIES
Issuance of capital stock                                                      14,286,446           2,532,396             715,000
Share issue cost                                                                 (746,881)               --               (10,500)
Debt issue cost                                                                (2,136,444)           (199,577)           (353,574)
Payment on Note payable                                                        (7,325,000)         (1,450,000)               --
Borrowing on Note payable                                                      11,469,870             401,491           1,350,000
                                                                          ---------------     ---------------     ---------------
Net cash provided by financing activities                                 $    15,547,991     $     1,284,310     $     1,700,926
                                                                          ---------------     ---------------     ---------------
Effect of exchange rate change in cash and
cash equivalents                                                               (1,189,640)            (64,595)           (237,692)

Net increase (decrease) in cash and cash equiv.                           $        51,150     $      (152,057)    $      (746,123)
                                                                          ---------------     ---------------     ---------------
Cash and cash equivalents at beginning of period                                     --               203,207           1,119,564
                                                                          ---------------     ---------------     ---------------
Cash and cash equivalents at end of period                                $        51,150     $        51,150     $       373,441
                                                                          ===============     ===============     ===============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.       BASIS OF PRESENTATION

         The accompanying consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and nine month periods ended September 30, 2001 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2001. The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted auditing principles for complete
financial statements. In connection with the preparation of these financial
statements, management was required to make estimates and assumptions that
affect the reported amount of assets, liabilities, revenues, expenses and
disclosure of contingent liabilities. Actual results could differ from such
estimates. These financial statements should be read in conjunction with the
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000.

2.       NATURE OF OPERATIONS

         Marine Shuttle Operations Inc. (the "Company"), through its
wholly-owned Norwegian subsidiary, Marine Shuttle Operations AS ("MSOAS"), is
seeking to become a leading player in the market for installing,
decommissioning, and transporting offshore oil and gas structures. The Company,
being in the development stage, has not generated any significant revenues from
operations and does not expect to generate any significant revenues from
operations until the year 2005, at the earliest. There can be no assurance,
however, that the Company will ever achieve commercially significant sales. To
date, the Company has not entered into any contracts for the use of its proposed
services, and no assurance can be given that any such contracts will
materialize.

3.       GOING CONCERN

         The Company's ability to continue as a going concern is dependent on
its ability to obtain significant additional financing. As shown in the
financial statements, the Company is in the development stage and at September
30, 2001 had accumulated losses from operations amounting to $23,306,877 and a
working capital deficit of $5,271,618, with no operating assets presently
generating cash to fund its operating and capital requirements. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. The Company is seeking to raise additional capital. There can be no
assurance that the Company will be able to raise additional capital on
reasonable terms, if at all, or that any financing transaction will not be
dilutive to current shareholders. If the Company is not able to raise additional
capital, it may be required to significantly curtail or cease its operating
activities. The financial statements have been prepared assuming that the
Company will continue as a going concern, and do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.



                                       6
<PAGE>

                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (unaudited)


4.       EXTERNAL FINANCING

         The Company is seeking to obtain additional capital. In October 1998,
the Company entered into an engagement letter with MFC Merchant Bank S.A.
pursuant to which MFC shall act, on a best-efforts basis, as agent for the
Company in raising additional capital. As consideration for its services, MFC
shall receive a success fee equal to five percent of the capital raised plus DM
100,000 (approximately $47,350) per month until the completion or termination of
the MFC financing. In addition, all of MFC's out-of-pocket expenses shall be
reimbursed, and if the Company raises the necessary funds through another
source, MFC shall receive a break-up fee equal to the greater of $1,200,000 or
350,000 shares of common stock. MFC agreed to defer the monthly fee obligation
from May 1, 2000 through December 1, 2000. In return for granting this deferral,
the deferred fees were increased by 10%. This 10% premium may be paid with
shares of common stock. Effective April 1, 2001, MFC will no longer receive a
monthly fee, but will invoice the Company for services rendered at the request
of the Company.

         On March 1, 1999, the Company entered into a loan agreement with
ValorInvest Ltd., an investment company, pursuant to which ValorInvest agreed to
lend the Company an aggregate of up to $6,000,000. The loan agreement was
amended and restated as of December 31, 1999, and was further amended as of
December 31, 2000. The loan agreement provides that advances shall be made in
increments of $250,000 and shall not exceed $500,000 in any single month unless
agreed to by ValorInvest. Any monies advanced under the loan agreement shall
bear interest at the rate of 7.5% per annum and shall be due and payable on June
30, 2001, except that if the Company raises, in the aggregate, in excess of
$5,000,000 from equity or long term debt financings after January 1, 2000, then
the loan shall be due to the extent of 25% of such excess. As of September 30,
2001, $3,875,000 had been advanced under the loan agreement, and $2,550,000 was
outstanding under the loan agreement. The Company currently is in default on
this loan, and is in discussions with ValorInvest Ltd. to extend the maturity
date of the loan.

         In August 1999, the Company entered into a loan agreement with Statens
naerings og distriktsutviklingsfond (the Norwegian Industrial and Regional
Development Fund, "SND"), pursuant to which SND agreed to lend the Company an
aggregate of up to NOK 4,000,000, (approximately $450,350) to finance specific
tasks within the Offshore Shuttle project. As of September 30, 2001, NOK
4,000,000 had been advanced under the loan agreement. The principal is repayable
over the five year period commencing two years after disbursement, in
semi-annually installments, each in the amount of NOK 400,000. The first
installment is due in February 2002.

         In September 1999, the Board of Westdeutsche Landesbank Girozentrale
(WestLB) of Dusseldorf issued its conditional approval to underwrite a U.S.
$157.5 million loan facility for the first Offshore Shuttle. Based on such
approval, the Company has mandated WestLB to act as sole arranger and
underwriter for the financing. WestLB's commitment is subject to several
material conditions, including satisfactorily completing its due diligence, the
Company's obtaining European government guarantees to secure a significant
portion of the loan facility, and its completing of an additional equity
financing. The Company is seeking to fulfil these conditions. The Company has
deferred debt issue costs related to the financing.

         In February 2000, the Company entered into a loan agreement with MFC
Merchant Bank S.A. pursuant to which MFC agreed to lend an aggregate of up to
$2,000,000, provided that advances shall not exceed $350,000 in any single
month. Any monies advanced under this loan agreement shall bear interest at the
rate of LIBOR plus 3.5% per annum and shall be due and payable in full on June
30, 2001. As of September 30, 2001, $900,000 was outstanding under this
agreement. The Company currently is in default on the loan, and is in
discussions with MFC to extend the maturity date of the loan.



                                       7
<PAGE>

                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (unaudited)

4.       EXTERNAL FINANCING (continued)

         In July 2000, the Company entered into a loan agreement with Mr. Holger
Timm pursuant to which Mr. Timm agreed to lend the Company an aggregate of up to
$1,500,000, provided that advances shall not exceed $500,000 in any single
month. In January 2001, the $1,450,000 that had been advanced under the loan
agreement plus $42,396 in interest thereon was converted into 3,730,990 shares
of the Company's common stock at $0.40 per share.

         In January 2001, the Company sold 1,000,000 shares of common stock for
gross proceeds of $200,000.

         In February and March 2001, the Company sold 5,000,000 shares, and
warrants to purchase 5,000,000 shares exercisable at $0.10 per share, for
aggregate gross proceeds of $505,000. In May 2001, warrants to purchase
1,000,000 shares were exercised for gross proceeds of $100,000, and in July
2001, warrants to purchase 1,500,000 shares were exercised for gross proceeds of
$150,000. The remaining warrants expired on October 1, 2001.

         In February and March 2001, the Company sold a total of 650,000 shares
to various of its officers, directors and employees for aggregate gross proceeds
of $65,000.

         In April 2001, the Company sold a total of 200,000 shares to an
employee for aggregate gross proceeds of $20,000.

         In May 2001, the Company sold 760,000 shares to a foreign person as
consideration for waiving certain rights associated with the Intellectual
Property Right Agreement between the Company and such person. The market value
of the shares were $159,600 and were part of the total payment of $219,875. The
total cost of $219,875 has been capitalized as intangible assets and will be
amortized over 10 years.

         In September 2001, the Company entered into a note purchase agreement
with Ventegis Capital AG, a German corporation, pursuant to which Ventegis
Capital AG purchased from the Company a promissory note in the principal amount
of $175,000. The note bears interest at the rate of 5.5% per annum, and may be
converted at the option of the lender into the Company's common stock at $0.10
per share. Subject to earlier conversion or prepayment, the note shall be due
and payable in full on August 30, 2002.

         In September 2001, the Company entered into a note purchase agreement
with a foreign individual pursuant to which he purchased from the Company a
promissory note in the principal amount of $50,000. The note bears interest at
the rate of 5.5% per annum, and may be converted at the option of the lender
into the Company's common stock at $0.10 per share. Subject to earlier
conversion or prepayment, the note shall be due and payable in full on
August 30, 2002.



                                       8
<PAGE>

                         MARINE SHUTTLE OPERATIONS INC.
                          (A development stage company)
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (unaudited)


5.       INCOME TAXES

         The Company has not provided for an income tax liability due to the
availability of operating loss carry-forwards. The Company has net operating
losses which may give rise to future tax benefits of approximately $4.5 million
as of September 30, 2001. To the extent not used, net operating loss
carry-forwards expire in varying amounts beginning in the year 2007. Based on
available evidence, including the Company's history of operating losses, the
uncertainty of future profitability and the impact of tax laws which may limit
the Company's ability to utilize such loss carry-forwards, management has
recorded a full valuation allowance against the realization of the net deferred
tax assets.

6.       RECENT PRONOUNCEMENT

         In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, Business Combinations, and
No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill will no longer
be amortized but will be subject to annual impairment tests in accordance with
the Statements. Other intangible assets will continue to be amortized over their
useful lives.

         The Company will apply the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of 2002. Application of
the nonamortization provisions of the Statement is expected to result in an
increase in net income of $3,412,792 ($0.06 per share) per year. During 2002,
the Company will perform the first of the required impairment tests of goodwill
and indefinite lived intangible assets as of January 1, 2002 and has not yet
determined what the effect will be on the earnings and financial position of the
Company.



                                       9
<PAGE>


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULT OF OPERATIONS

         The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
financial statements and the notes thereto which appear elsewhere in this
quarterly report and in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000.

General

         The Company, through its wholly-owned Norwegian subsidiary, Marine
Shuttle Operations AS ("MSOAS"), is seeking to become a leading player in the
market for installing, decommissioning, and transporting offshore oil and gas
structures.

         The Company has designed a vessel, the "Offshore Shuttle," which it
believes will be capable of lifting and carrying large offshore oil and gas
structures, eliminating the need for extensive cutting prior to decommissioning
and permitting onshore assembly prior to installation. The Company anticipates
that construction of the first Offshore Shuttle will commence shortly after the
receipt of sufficient capital and that it will be operational 24 months
thereafter. Construction of a second Offshore Shuttle is intended to commence
one year after construction of the first Offshore Shuttle begins, and
construction of a third and a fourth Offshore Shuttle is intended to commence
one year after construction of the second begins.

         The Company was incorporated in Nevada in May 1997 under the name
Geoteck International, Inc. On May 29, 1998, the Company changed its name to
Marine Shuttle Operations Inc. In 1998, the Company acquired all of the
outstanding stock of MSOAS in exchange for 7,600,000 shares of common stock. The
Company also acquired approximately 68% of the outstanding stock of Offshore
Shuttle AS ("OSAS"), the holder of the licensing and marketing rights to the
Offshore Shuttle design, in exchange for 4,937,607 shares of common stock. This
transaction was accounted for using the purchase method.

         To benefit from a more rational and cost efficient use of the resources
in MSOAS and OSAS, the Board of Directors of the two companies proposed to merge
the two companies. The proposed merger plan was approved by the shareholders of
both companies on May 30, 1999, and the merger became effective in September
1999. The OSAS shareholders received 1.5 MSOAS shares for each of their OSAS
shares. As a result of the merger, the Company owned approximately 81% of MSOAS,
and MSOAS acquired the licensing and marketing rights to the Offshore Shuttle.

         In April 2000, the Company acquired an additional 8.4% of the
outstanding shares of MSOAS from two individuals in exchange for an aggregate of
1,030,002 shares of common stock. In June 2000, the Company acquired an
additional 9.7% of the outstanding shares of MSOAS in exchange for an aggregate
of 1,186,283 shares of its common stock, and the Company acquired the remaining
1% of the MSOAS shares for cash. These acquisitions were accounted for as
purchases. The Company now owns all of the outstanding shares of MSOAS.

Results of Operations

         The Company is in the development stage and has generated revenues to
date only from study work. Since the merger of OSAS into MSOAS, the Company's
main operations have been conducted through MSOAS.


Three months ended September 30, 2001 and 2000:

         Personnel costs. Personnel costs include costs for both employees and
hired personnel and were $236,233 for the three month period ended September 30,
2001, and $492,338 for the three month period ended September 30, 2000. The
decrease in costs of $256,105 was mainly due to less personnel costs related to
client studies.

         Legal, audit and advisory services. Legal, audit and advisory services
for the three month period ended September 30, 2001 were approximately $18,255 a
decrease of $40,946 compared to legal, audit and advisory services of $59,201
for the same period in 2000. The decrease was mainly due to reduced use of legal
and financial services as a result of the slowdown in activities.



                                       10
<PAGE>


         General and administrative expenses. General and administrative
expenses were $73,328 and $170,023 for the three month periods ended September
30, 2001 and 2000, respectively. The decrease in costs of $96,695 was mainly due
to a slowdown of spending by the Company to conserve capital.

         Marketing. Marketing expenses for the three month period ended
September 30, 2001 were $19,322, a decrease of $18,302 from the marketing
expenses of $37,624 for the same period in 2000. The decrease in costs was
mainly due to the purchase of fewer marketing materials and services in the
current period.

         Nine months ended September, 2001 and 2000:

         Personnel costs. Personnel costs include costs for both employees and
hired personnel and were $802,382 for the nine month period ended September 30,
2001, a decrease of $226,931 from the personnel costs of $1,029,313 for the nine
month period ended September 30, 2000. The decrease in costs was mainly due to
less personnel costs related to client studies.

         Legal, audit and advisory services. Legal, audit and advisory services
for the nine month period ended September 30, 2001 were approximately $188,276,
a decrease of $101,542 compared to legal, audit and advisory services of
$289,818 for the same period in 2000. The decrease was mainly due to reduced use
of legal and financial services as a result of the slowdown in activities.

         General and administrative expenses. General and administrative
expenses for the nine month period ended September 30, 2001 were $232,125, a
decrease of $315,754 from the general and administrative expenses of $547,879
for the same period in 2000. The decrease in costs was mainly due to a slowdown
of spending by the Company to conserve capital.

         Marketing. Marketing expenses for the nine month period ended September
30, 2001 were $77,013, a decrease of $65,163 from the marketing expenses of
$142,176 for same period in 2000. The decrease in costs was mainly due to the
purchase of fewer marketing materials and services in the current period.

         Technical Development. The Company did not have any technical
development costs for the nine month period ended September 30, 2001, mainly due
to a slowdown of spending by the Company to conserve capital. The technical
development costs for the same period in 2000 were $29,197.

         Interest expense. Interest expense for the nine month period ended
September 30, 2001 was $36,207, an increase of $11,713 compared to interest
expense of $24,494 for the same period in 2000. The reason for the increase was
that the Company has had higher interest bearing debt in the current period
compared to the same period in 2000.

         Currency exchange loss/gain. For the nine month period ended September
30, 2001, the Company had a currency exchange loss of $848, compared to a gain
of $14,655 for same period in 2000. The difference of $15,503 was a result of
weakening of the Norwegian kroner against the U.S. dollar during the period in
2001.


Liquidity and Capital Resources

         The Company's ability to continue as a going concern is dependent on
its ability to obtain significant additional financing. As of September 30,
2001, the Company had cash and cash equivalents of $51,150, a deficit
accumulated during the development stage of $23,306,877 and a working capital
deficit of $5,271,618. The Company is in the development stage with no operating
assets presently generating cash to fund its operating and capital requirements.

         Net cash used in operating activities was $1,126,811 for the nine month
period ended September 30, 2001, a decrease of $168,677 compared to $1,295,488
used for the nine month period ended September 30, 2000. The decrease was the
result of the Company's efforts to reduce spending until the Company can raise
additional funds.



                                       11
<PAGE>


         For the nine month period ended September 30, 2001 the Company incurred
$244,961 on capital expenditures, a decrease of $668,909 from the capital
expenditures of $913,870 for the same period in 2000. The decrease was the
result of the Company's efforts to reduce engineering work for the Offshore
Shuttle until the Company can raise additional funds.

         On March 1, 1999, the Company entered into a loan agreement with
ValorInvest, Ltd., an investment company, pursuant to which ValorInvest agreed
to lend the Company an aggregate of up to $6,000,000. The loan agreement was
amended and restated as of December 31, 1999, and was further amended as of
December 31, 2000. The loan agreement provides that advances shall be made in
increments of $250,000 and shall not exceed $500,000 in any single month unless
agreed to by ValorInvest. Any monies advanced under the loan agreement shall
bear interest at the rate of 7.5% per annum and shall be due and payable on June
30, 2001; except that if the Company raises, in the aggregate, in excess of
$5,000,000 from equity or long term debt financing after January 1, 2000, then
the loan shall be due to the extent of 25% of such excess. As of September 30,
2001, $3,875,000 had been advanced under the loan agreement, and $2,550,000 was
outstanding under the loan agreement. The Company currently is in default on the
loan, and is in discussions with ValorInvest Ltd. to extend the maturity date of
the loan.

         In August 1999, the Company entered into a loan agreement with Statens
naerings og distriktsutviklingsfond (the Norwegian Industrial and Regional
Development Fund, "SND"), pursuant to which SND agreed to lend the Company an
aggregate of up to NOK 4,000,000, (approximately $450,350), to finance specific
tasks within the Offshore Shuttle project. As of September 30, 2001, NOK
4,000,000 was outstanding under the loan agreement. The principal is repayable
over the five year period commencing two years after disbursement, in
semi-annual installments, each in the amount of NOK 400,000. The first
installment is due in February 2002.

         In February 2000, the Company entered into a loan agreement with MFC
Merchant Bank S.A, an investment company, pursuant to which MFC agreed to lend
an aggregate of up to $2,000,000, provided that advances shall not exceed
$350,000 in any single month. Any monies advanced under this loan agreement
shall bear interest at the rate of LIBOR plus 3.5% per annum and shall be due
and payable in full on June 30, 2001. As of September 30, 2001, $900,000 was
outstanding under this agreement. The Company currently is in default on the
loan, and is in discussions with MFC to extend the maturity date of the loan.

         In July 2000, the Company entered into a loan agreement with Mr. Holger
Timm pursuant to which Mr. Timm agreed to lend the Company an aggregate of up to
$1,500,000, provided that advances shall not exceed $500,000 in any single
month. In January 2001, the $1,450,000 that had been advanced under the loan
agreement plus $42,396 in interest thereon was converted into shares of the
Company's common stock at $0.40 per share.

         In January 2001, the Company sold 1,000,000 shares of common stock for
gross proceeds of $200,000.

         In February and March 2001, the Company sold 5,000,000 shares, and
warrants to purchase 5,000,000 shares exercisable at $0.10 per share, for
aggregate gross proceeds of $505,000. In May 2001, warrants to purchase
1,000,000 shares were exercised for gross proceeds of $100,000, and in July
2001, warrants to purchase 1,500,000 shares were exercised for gross proceeds of
$150,000. The remaining warrants expired on October 1, 2001.

         In February and March 2001, the Company sold a total of 650,000 shares
to various of its officers, directors and employees for aggregate gross proceeds
of $65,000.

         In April 2001, the Company sold a total of 200,000 shares to an
employee for aggregate gross proceeds of $20,000.

         In May 2001, the Company issued 760,000 shares to a foreign person as
consideration for waiving certain rights associated with the Intellectual
Property Right Agreement between the Company and such person.



                                       12
<PAGE>


         In September 2001, the Company entered into a note purchase agreement
with Ventegis Capital AG, a German corporation, pursuant to which Ventegis
Capital AG purchased from the Company a promissory note in the principal amount
of $175,000. The note bears interest at the rate of 5.5% per annum, and may be
converted at the option of the lender into the Company's common stock at $0.10
per share. Subject to earlier conversion or prepayment, the note shall be due
and payable in full on August 30, 2002.

         In September 2001, the Company entered into a note purchase agreement
with a foreign individual pursuant to which he purchased from the Company a
promissory note in the principal amount of $50,000. The note bears interest at
the rate of 5.5% per annum, and may be converted at the option of the lender
into the Company's common stock at $0.10 per share. Subject to earlier
conversion or prepayment, the note shall be due and payable in full on
August 30, 2002.

         The Company is seeking to obtain additional capital. In October 1998,
the Company entered into an engagement letter with MFC Merchant Bank S.A.
pursuant to which MFC shall act, on a best-efforts basis, as agent for the
Company in raising additional capital. As consideration for its services, MFC
shall receive a success fee equal to five percent of the capital raised plus DM
100,000 (approximately $46,500) per month until the completion or termination of
the MFC financing. In addition, all of MFC's out-of-pocket expenses shall be
reimbursed, and if the Company raises the necessary funds through another
source, MFC shall receive a break-up fee equal to the greater of $1,200,000 or
350,000 shares of common stock. MFC agreed to defer the monthly fee obligation
from May 1, 2000 through December 1, 2000. In return for granting this deferral,
the deferred fees were increased by 10%. This 10% premium may be paid with
shares of common stock. Effective April 1, 2001, MFC will no longer receive a
monthly fee, but will invoice the Company for services rendered at the request
of the Company.

         In September 1999, the Board of Westdeutsche Landesbank Girozentrale
(WestLB) of Dusseldorf issued its conditional approval to underwrite a U.S.
$157.5 million loan facility for the first Offshore Shuttle. Based on such
approval, the Company has mandated WestLB to act as sole arranger and
underwriter for the financing. WestLB's commitment is subject to several
material conditions, including satisfactorily completing its due diligence, the
Company's obtaining European government guarantees to secure a significant
portion of the loan facility, and its completing of an additional equity
financing. The Company is seeking to fulfill these conditions.

         There can be no assurance that the conditions to the WestLB financing
will be satisfied or, if satisfied, that the WestLB financing will be
consummated on reasonable terms or at all. If the WestLB financing or any other
substantial financing it is not completed, the Company may be required to
significantly curtail or cease its proposed activities. Although the Company
believes that the proceeds from the WestLB financing, if completed, will enable
it to construct the first Offshore Shuttle, there can be no assurance in that
regard. Moreover, even if the WestLB financing or another substantial financing
is consummated, the Company's future capital requirements could vary
significantly and will depend on certain factors, many of which are not within
its control. Such factors include:

         o        the need for cash to fund the construction of additional
                  Offshore Shuttles;
         o        greater than anticipated expenses; and
         o        longer engineering, development, and construction times than
                  now contemplated.

         If the Company is successful in completing the first Offshore Shuttle,
it believes it will be able to fund the construction of additional Offshore
Shuttles from its future operating cash flows and/or short or medium term debt
financing. There can be no assurance, however, that the Company's beliefs will
prove to be accurate.



                                       13
<PAGE>


International Operations

         The Company intends to market its services in international markets.
International operations entail various risks, including:

         o        political instability;
         o        economic instability and recessions;
         o        exposure to currency fluctuations;
         o        difficulties of administering foreign operations generally;
         o        reduced protection for intellectual property rights;
         o        potentially adverse tax consequences; and
         o        obligations to comply with a wide variety of foreign laws and
                  other regulatory requirements.

Forward-looking Statements

         The information set forth herein includes certain forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. These forward-looking statements include, without limitation, statements
regarding the Company's anticipated operations, market size, the capabilities of
the Offshore Shuttle, the dates on which construction of the Offshore Shuttles
will commence and be completed, the number of Offshore Shuttles to be
constructed, the WestLB financing and the Company's ability to satisfy the
conditions precedent to the WestLB financing, and the Company's ability to fund
the construction of additional Offshore Shuttles. Actual results could differ
materially from those anticipated in such forward-looking statements as result
of various known and unknown factors including, without limitation, future
economic, competitive, regulatory and market conditions, future business
decisions, the receipt of financing, construction delays, demand for the
Company's services and those risks discussed in the Company's Registration
Statement on Form S-1 filed with the Securities and Exchange Commission on May
8, 2001, and in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000. Words such as "believes," "anticipates," "expects,"
"intends," "may," and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such
statements. Readers are cautioned not to put undue reliance on these
forward-looking statements. The Company undertakes no obligation to revise any
of these forward-looking statements.



                                       14
<PAGE>




ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Interest Rate Risk

         The Company's exposure to market risk for changes in interest rates
relates primarily to the Company's notes payable and long-term debt. The Company
believes its exposure to interest rate risk is not material since its current
notes payable consist of fixed rate indebtedness, and the long-term variable
rate debt obligation is not material. The fair value of the fixed rate notes
payable approximates its carrying value due to its short-term maturity.

         Interest rate risk may arise if the Company is successful in obtaining
debt financing to finance the building of the first Offshore Shuttle. In such an
event, the Company will assess the extent of its interest rate risk and may
enter into hedging transactions to reduce its exposure and to ensure its ability
to service its debt.

Foreign Exchange Risk

         Foreign exchange risk may arise if the Company is required to use
different currencies for various aspects of its operations. Although the
principal currency used in the offshore decommissioning industry in the U.S.
dollar, the local expenditures of MSOAS (e.g., rent, telephone, payroll, etc.)
are likely to be paid in Norwegian kroner, and it is possible that the contract
for construction of the first Offshore Shuttle will be denominated in a currency
other than the U.S. dollar or the Norwegian kroner. The Company currently has no
foreign exchange contracts.




                                       15
<PAGE>

                                     PART II


                                OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the quarter ended September 30, 2001, the Company completed the
following transactions in reliance on Regulation S:

         In July 2001, the Company sold 1,500,000 shares to a foreign person
pursuant to the exercise of warrants for gross proceeds of $150,000.

         In September 2001, the Company sold promissory notes in the aggregate
principal amount of $225,000 to two foreign persons.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         On March 1, 1999, the Company entered into a loan agreement with
ValorInvest Ltd., an investment company, pursuant to which ValorInvest agreed to
lend the Company an aggregate of up to $6,000,000. Monies advanced under the
loan agreement bear interest at the rate of 7.5% per annum, and were due and
payable on June 30, 2001. As of September 30, 2001, $3,875,000 had been advanced
under the loan agreement, and $2,550,000 was outstanding under the loan
agreement. The Company currently is in default on the repayment of the amount
outstanding, and is in discussions with ValorInvest to extend the maturity date
of the loan.

         In February 2000, the Company entered into a loan agreement with MFC
Merchant Bank S.A. pursuant to which MFC agreed to lend an aggregate of up to
$2,000,000. Monies advanced under the loan agreement bear interest at the rate
of LIBOR plus 3.5% per annum, and were due and payable in full on June 30, 2001.
As of September 30, 2001, $900,000 was outstanding under this agreement. The
Company currently is in default on the repayment of the amount outstanding, and
is in discussions with MFC to extend the maturity date of the loan.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits.

         (a)      Exhibits

                  The following exhibits are filed herewith:

                  10.1     Amended and Restated Note Purchase Agreement dated as
                           of September 4, 2001 with Ventegis Capital AG
                           (including amended and restated promissory note dated
                           as of September 4, 2001).

                  10.2     Amended and Restated Note Purchase Agreement dated as
                           of September 21, 2001 with a foreign individual
                           (including amended and restated promissory note dated
                           as of September 21, 2001).



         (b)      Report on Form 8-K.

                  The Company did not file any reports on Form 8-K during the
                  three month period ended September 30, 2001.




                                       16
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.





Date:  November 14, 2001            MARINE SHUTTLE OPERATIONS INC.



                                    By: /s/ Iqbal Akram
                                        -------------------

                                    Iqbal Akram, Chief Financial Officer

                                    (Principal Financial and Accounting Officer)









                                       17
<PAGE>


                                INDEX TO EXHIBITS


 Exhibit #                   Document                                    Page

   10.1      Amended and Restated Note Purchase Agreement dated as
             of September 4, 2001 with Ventegis Capital AG
             (including amended and restated promissory note dated
             as of September 4, 2001).

   10.2      Amended and Restated Note Purchase Agreement dated as
             of September 21, 2001 with a foreign individual
             (including amended and restated promissory note dated
             as of September 21, 2001).