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, 2007
  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
            333-26227-02





OR


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





Date
      of event requiring this shell company reportGolden
      State Petro (IOM I-B) PLC(Exact
      name of Registrant as specified in its charter)Golden
      State Petro (IOM I-B) PLC(Translation
      of Registrant’s name into English)Isle
      of Man(Jurisdiction
      of incorporation or organization)c/o
      15-19 Athol Street, Douglas, Isle of Man IM1 1LB(Address
      of principal executive offices)Georgina
      Sousa, (1) 441 295 6935, (1) 441 295 3494, Par-la-Ville, 14 Par-la-Ville
      Road, Hamilton, HM08, Bermuda(Name,
      Telephone, E-mail and/or Facsimile number and Address of Company Contact
      Person)





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





Title
      of each class
            
            Name
      of each exchangeNone










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





None(Title
      of Class)








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





Golden
      State Petroleum Transport Corporation 8.04% First Preferred Mortgage Notes
      Due 2019(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.





2
      Shares of Common Stock, no par value per share





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


[   ]
      Yes
              
              [X]
    No




If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.


[   ]
      Yes
              
              [X]
    No


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.


[X]
      Yes
              
              [   ]
      No


Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):





Large
accelerated filer
[    ]          Accelerated
filer
[    ]          Non-accelerated
filer [ X ]





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





[   ]
      Item 17
            [
      X ] Item 18





Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:





US GAAP [
X ]          International
Financial Reporting Standards
[   ]          Other
[   ]





If this
is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).




[   ]
      Yes
            
            [X]
    No










INDEX
TO REPORT ON FORM 20-F







PAGEPART
      IItem
      1.
              Identity
      of Directors, Senior Management and Advisors
              1Item
      2.
              Offer
      Statistics and Expected Timetable
              1Item
      3.
              Key
      Information
              1Item
      4.
              Information
      on the Company
              5Item
      4A.
              Unresolved
      Staff Comments
              17Item
      5.
              Operating
      and Financial Review and Prospects
              18Item
      6.
              Directors,
      Senior Management and Employees
              22Item
      7.
              Major
      Shareholders and Related Party Transactions
              24Item
      8.
              Financial
      Information
              25Item
      9.
              The
      Offer and Listing
              25Item
      10.
              Additional
      Information
              25Item
      11.
              Quantitative
      and Qualitative Disclosures about Market Risk
              27Item
      12.
              Description
      of Securities Other Than Equity Securities
              28PART
      IIItem
      13.
              Defaults,
      Dividend Arrearages and Delinquencies
              29Item
      14.
              Material
      Modifications to the Rights of Security Holders and Use of
      Proceeds
              29Item
      15.
              Controls
      and Procedures
              29Item
      16.
              Reserved
              30Item
      16A.
              Audit
      Committee Financial Expert
              30Item
      16B.
              Code
      of Ethics
              30Item
      16C.
              Principal
      Accountant Fees and Services
              30Item
      16D.
              Exemptions
      From the Listing Standards For Audit Committees
              31Item
      16E.
              Purchases
      of Equity securities by the Issuer and Affiliated
    Purchasers
              31PART
      IIIItem
      17.
              Financial
      Statements
              32Item
      18.
              Financial
      Statements
              32Item
      19.
              Exhibits
              32


i


CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS





Matters
discussed in this document may constitute forward-looking
statements.  The Private Securities Litigation Reform Act of 1995
provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their
business.  Forward-looking statements include statements concerning
plans, objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than statements of
historical facts.





Golden
State Petro (IOM I-B) PLC desires to take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and is
including this cautionary statement in connection with this safe harbor
legislation.  This document and any other written or oral statements
made by us or on our behalf may include forward-looking statements, which
reflect our current views with respect to future events and financial
performance.  The words “believe,” “anticipate,” “intends,”
“estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,”
“expect” and similar expressions identify forward-looking
statements.





The
forward-looking statements in this document are based upon various assumptions,
many of which are based, in turn, upon further assumptions, including without
limitation, management’s examination of historical operating trends, data
contained in our records and other data available from third
parties.  Although we believe that these assumptions were reasonable
when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections.





In
addition to these important factors and matters discussed elsewhere herein and
in the documents incorporated by reference herein, important factors that, in
our view, could cause actual results to differ materially from those discussed
in the forward-looking statements include the strength of world economies and
currencies, general market conditions, including fluctuations in charterhire
rates and vessel values, changes in demand in the tanker market, as a result of
changes in OPEC’s petroleum production levels and world wide oil consumption and
storage, changes in the company’s operating expenses, including bunker prices,
drydocking and insurance costs, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
and other important factors described from time to time in the reports filed by
Golden State Petro (IOM 1-B) PLC with the Securities and Exchange
Commission.





-
 ii





PART
I








ITEM
1.                      IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS





Not
Applicable





ITEM
2.                      OFFER
STATISTICS AND EXPECTED TIMETABLE





Not
Applicable





ITEM
3.                      KEY
INFORMATION





Throughout
this report, the “Company,” “we,” “us” and “our” all refer to Golden State Petro
(IOM I-B) plc. We use the term deadweight ton, or dwt, in describing the size of
vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000
kilograms, refers to the maximum weight of cargo and supplies that a vessel can
carry. Unless otherwise indicated, all references to “USD” and “$” in this
report are to, and amounts are presented in, U.S. dollars.





A.  Selected
Financial Data





The
selected income statement data of the Company with respect to the fiscal years
ended December 31, 2007, 2006, and 2005, and the selected balance sheet data
with respect to the fiscal years ended December 31, 2007 and 2006, have been
derived from the Company’s 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, 2004
and 2003 and the selected balance sheet data with respect to the fiscal years
ended December 31, 2005, 2004 and 2003 have been derived from financial
statements of the Company not included herein. The following table should also
be read in conjunction with Item 5 “Operating and Financial Review and
Prospects” and the Company’s Financial Statements and Notes thereto included
herein. The Company’s accounts are maintained in US dollars.





Fiscal
      year ended December 31,2007
            
            
            2006
            
            
            2005
            
            
            2004
            
            
            2003(in
      thousands of $, except per share data)Income
      Statement dataTotal
      operating revenues
            
            
            10,305
            
            
            
            9,928
            
            
            
            9,928
            
            
            
            9,928
            
            
            
            9,928Net
      income
            
            
            2,532
            
            
            
            1,831
            
            
            
            1,504
            
            
            
            1,119
            
            
            
            902Per
      share data:Dividends
      per share
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Balance
      sheet data:Vessel,
      net
            
            
            58,302
            
            
            
            61,519
            
            
            
            64,735
            
            
            
            67,952
            
            
            
            71,169Total
      assets
            
            
            73,077
            
            
            
            71,366
            
            
            
            73,233
            
            
            
            76,305
            
            
            
            79,424Total
      short term note obligations
            
            
            2,920
            
            
            
            -
            
            
            
            4,440
            
            
            
            4,450
            
            
            
            4,200Total
      long term note obligations
            
            
            60,630
            
            
            
            63,550
            
            
            
            63,550
            
            
            
            67,950
            
            
            
            72,400Stockholder’s
      equity
            
            
            7,371
            
            
            
            4,839
            
            
            
            3,008
            
            
            
            1,504
            
            
            
            305Number
      of shares
            
            
            2
            
            
            
            2
            
            
            
            2
            
            
            
            2
            
            
            
            2








B.  Capitalization
and Indebtedness





Not
Applicable





1


C.  Reasons
for the offer and use of proceeds





Not
Applicable





D.  Risk
Factors





We are
currently engaged in transporting crude oil and oil products. The following
summarizes some of the risks that may materially affect our business, financial
condition or results of operations.





The
cyclical nature of the tanker industry may lead to volatile changes in charter
rates which may adversely affect our earnings





Our
vessel is currently operated under a bareboat charter (the “Initial Charter”) to
Chevron Transport Corporation, which we refer to as Chevron.  The
Initial Charter commenced on March 15, 1999, the delivery date of our vessel,
and ends on the eighteenth anniversary of such delivery date.  Chevron
had an option to terminate the Initial Charter on the eighth anniversary of the
delivery date of the vessel, March 15, 2007, and hastermination
options in each of the four subsequent two-year anniversaries thereof. For the
remaining optional termination dates, Chevron must provide us with (i)
non-binding notice of its intent to exercise such option nine months prior to
the optional termination date and (ii) irrevocable notice of such exercise six
months prior to the optional termination date. As of June 15, 2008 Chevron had
not provided us with such notice.





Historically,
the tanker industry has been highly cyclical, with volatility in profitability
and asset values resulting from changes in the supply of and demand for tanker
capacity. If the tanker market is depressed in the future when our vessel’s
Initial Charter expires or is terminated, our earnings and available cash flow
may decrease. The charter rates payable under time charters or in the spot
market will depend upon, among other things, economic conditions in the tanker
market.  Fluctuations in charter rates and vessel values result from
changes in the supply and demand for tanker capacity and changes in the supply
and demand for oil and oil products.





If the
number of new ships delivered exceeds the number of tankers being scrapped and
lost, tanker capacity will increase. If the supply of tanker capacity increases
and the demand for tanker capacity does not increase correspondingly, the
charter rates paid for our vessel could materially decline.





Because
our Initial Charter may be terminated on certain dates the next date being in
March 2011, we may incur additional expenses and not be able to re-charter our
vessel profitably





Golden
State Petroleum Transport Corporation, a Delaware corporation as an agent for us
and Golden State Petro (IOM I-A) PLC, issued 8.04% First Preferred Mortgage Term
Notes for $127,100,000 (the “Term Notes”) and Serial First Preferred Mortgage
Notes for $51,700,000 (the “Serial Notes”) (together the
“Notes”).  The principal amount of the Term Notes and the Serial Notes
allocated to us was $63,550,000 and $26,800,000 respectively. The proceeds from
the offering and sale of the Notes allocated to us were used by us to fund the
construction of our vessel.





Chevron
has a third option to terminate the Initial Charter on March 15, 2011 and has
termination options on each of the two subsequent two-year anniversaries
thereof. Chevron in its sole discretion may exercise these options and will not
owe any fiduciary or other duty to the holders of the Notes in deciding whether
to exercise its termination options, and their decision may be contrary to our
interests or the interests of the holders of the Notes.





We cannot
predict any of the factors that the charterer will consider in deciding whether
to exercise any of its remaining termination options under the Initial
Charter.  It is likely, however, that the charterer would consider a
variety of factors, which may include whether a vessel is surplus or suitable to
their requirements and whether competitive charterhire rates are available to
them in the open market at that time.





2


In the
event that Chevron does terminate the Initial Charter, we will attempt to
arrange a replacement charter, or may sell the vessel.  Replacement
charters may include shorter-term time charters and employing the vessel on the
spot charter market (which is subject to greater fluctuation than the time
charter market).  Any replacement charter may bring us lower charter
rates and would likely require us to incur greater expenses which may reduce the
amounts available, if any, to pay principal and interest on the
Notes.





We
operate in the highly competitive international tanker market which could affect
our position when the Initial Charter expires or is terminated by
Chevron





The
operation of tanker vessels and transportation of crude and petroleum products
is an extremely competitive business.  Competition arises primarily
from other tanker owners, including major oil companies as well as independent
tanker companies, some of whom have substantially greater resources than
us.  Competition for the transportation of oil and oil products can be
intense and depends on price, location, size, age, condition and the
acceptability of the tanker and its operators to the
charterers.  During the term of the Initial Charter with Chevron we
are not exposed to the risk associated with this competition.  At the
end of the Initial Charter and in the event that Chevron terminates the Initial
Charter on any of the remaining optional termination dates, we will have to
compete with other tanker owners, including major oil companies as well as
independent tanker companies for charters.  Due in part to the
fragmented tanker market, competitors with greater resources could enter and
operate larger fleets through acquisitions or consolidations and may be able to
offer better prices and fleets, which could result in our achieving lower
revenues from our VLCC oil tanker.





We
are highly dependent on Chevron and its guarantor





Chevron’s
obligations under the Initial Charter are guaranteed by Chevron Corporation. We
are highly dependent on the performance by Chevron of its obligations under the
Initial Charter and by its guarantor, Chevron Corporation, of its obligations
under its guarantee.  A failure by Chevron and Chevron Corporation to
perform their obligations under the Initial Charter could result in our
inability to service the Notes.  If our Note holders had to enforce
the mortgages securing our Notes, they may not be able to recover the principal
and interest owed to them.





We
may not be able to pay down our debt in the future, which could result in the
loss of our vessel





We
currently must dedicate a large portion of our cash flow from operations to
satisfy our debt service obligations.  Our ability to pay interest on,
and other amounts due in respect of, our Notes will depend on our future
operating performance, prevailing economic conditions and financial, business
and other factors, many of which are beyond our control.  There can be
no assurance that our cash flow and capital resources will be sufficient for
payment of our indebtedness in the future.  If we are unable to
service our indebtedness or obtain additional financing, as needed, this could
have a material adverse effect on the holders of the Notes.





There is
no guarantee that VLCC rates would be sufficient to meet the debt service
required if the bareboat charter entered into with Chevron is terminated. Spot
market rates are volatile and generally linked to global economic development
and especially demand for oil but also to political events affecting oil
producing countries.





Compliance
with environmental laws or regulations may adversely affect our earnings and
financial conditions at the end of the Initial Charter or if Chevron terminates
the Initial Charter prior to that time





Regulations
in the various states and other jurisdictions in which our vessel trades affect
our business.  Extensive and changing environmental laws and other
regulations, compliance with which may entail significant expenses, including
expenses for ship modifications and changes in operating procedures, affect the
operation of our vessel.  Although Chevron is responsible for all
operational matters and bears all these expenses during the term of the Initial
Charter, these expenses could have an adverse effect on our business operations
at any time after the expiration or termination of the Initial Charter or in the
event Chevron Transport Corporation fails to make a necessary
payment.





3


We
may not have adequate insurance at the end of the Initial Charter or if Chevron
terminates its charter prior to that time





There are
a number of risks associated with the operation of ocean-going vessels,
including mechanical failure, collision, human error, war, terrorism, property
loss, cargo loss or damage and business interruption due to political
circumstances in foreign countries, hostilities and labor strikes. Any of these
events may result in loss of revenues, increased costs and decreased cash flows.
In addition, following the terrorist attack in New York City on September 11,
2001, and the military response of the United States, the likelihood of future
acts of terrorism may increase, and our vessel may face higher risks of attack.
Future hostilities or other political instability, as shown by the attack on the
Limburg in Yemen in
October 2002, could affect our trade patterns and adversely affect our
operations and our revenues, cash flows and profitability.  In
addition, the operation of any vessel is subject to the inherent possibility of
marine disaster, including oil spills and other environmental mishaps, and the
liabilities arising from owning and operating vessels in international
trade.





Under the Initial Charter,
Chevron bears all risks associated with the operation of our vessel including
the total loss of the vessel.  However, we cannot assure holders of
the Notes that we will adequately insure against all risks at the end of the
Initial Charter or in the event then Initial Charter is
terminated.  We may not be able to obtain adequate insurance coverage
at reasonable rates for our vessel in the future and the insurers may not pay
particular claims.For example, a catastrophic spill could exceed our
insurance coverage and have a material adverse effect on our financial
condition. In addition, we may not be able to procure adequate insurance
coverage at commercially reasonable rates in the future and we cannot guarantee
that any particular claim will be paid. In the past, new and stricter
environmental regulations have led to higher costs for insurance covering
environmental damage or pollution, and new regulations could lead to similar
increases or even make this type of insurance unavailable. Furthermore, even if
insurance coverage is adequate to cover our losses, we may not be able to timely
obtain a replacement ship in the event of a loss. We may also be subject to
calls, or premiums, in amounts based not only on our own claim records but also
the claim records of all other members of the protection and indemnity
associations through which we receive indemnity insurance coverage for tort
liability. Our payment of these calls could result in significant expenses to us
that could reduce our cash flows and place strains on our liquidity and capital
resources.





Governments
could requisition our vessel during a period of war or emergency, resulting in a
loss of earnings





A
government could requisition for title or seize our
vessel.  Requisition for title occurs when a government takes control
of a vessel and becomes her owner.  Also, a government could
requisition our vessel for hire.  Requisition for hire occurs when a
government takes control of a vessel and effectively becomes her charterer at
dictated charter rates. This amount could be materially less than the
charterhire that would have been payable otherwise.  In addition, we
would bear all risk of loss or damage to a vessel under requisition for
hire.





Our
operations outside the United States expose us to global risks that may
interfere with the operation of our vessel





We are an
international company and primarily conduct our operations outside of the United
States. Changing economic, regulatory, political and governmental conditions in
the countries where we are engaged in business or where our vessel is registered
affect us. Hostilities or other political instability in regions where our
vessel trades could affect our trade patterns and adversely affect our
operations and performance.  The terrorist attacks against targets in
the United States on September 11, 2001 and the military response by the United
States has increased the likelihood of acts of terrorism
worldwide.  Acts of terrorism, regional hostilities or other political
instability, as shown by the attack on the Limburg in Yemen in October
2002, attacks on oil pipelines during and subsequent to the Iraq war in 2003 and
attacks on expatriate workers in the Middle East could adversely affect the oil
trade and reduce our revenue or increase our expenses.





4


Our
Notes may not be as liquid as other securities with established trading markets,
which may affect the value of the Notes and your ability to trade
them





Our Notes
are not listed on any national securities exchange or traded on the Nasdaq
National Market and have no established trading market.  Consequently,
our Notes could trade at prices that may be higher or lower than their principal
amount or purchase price, depending on many factors, including prevailing
interest rates, the market for similar notes and warrants, and our financial
performance.  The placement agents for our Notes currently make a
market for our Notes, but are not obligated to do so and may discontinue their
market making activity at any time.  In addition, their market making
activity is subject to the limits imposed by the Securities Act and the Exchange
Act.  We cannot assure you that an active trading market will exist
for the Notes or that any market for the Notes will be liquid.





Substantial
leverage and debt service could affect our ability to grow and service our debt
obligations





We are
highly leveraged.  As of December 31, 2007, we had $63.6 million in
total indebtedness outstanding and stockholders’ equity of $7.4
million.  The degree to which we are leveraged could have important
consequences for the holders of our Notes, including:





·
            we
      may have trouble withstanding competitive pressures and responding to
      changing business conditions;


·
            we
      may be more vulnerable than others in the event of a downturn in general
      economic conditions or in our business;
and


·
            we
      may be more highly leveraged than other tanker owners with which we
      compete, which may put us at a competitive
  disadvantage.





We
have a limited business purpose which limits our flexibility





Our
activity is limited to issuing the Notes, engaging in the acquisition,
disposition, ownership, and chartering of a VLCC oil tanker.  During
the terms of the Initial Charter with Chevron we expect that the only source of
operating revenue from which we may pay principal and interest on the Notes will
be from this charter.





ITEM
4.                      INFORMATION
ON THE COMPANY





A.  History
and Development of the Company





Golden
State Petro (IOM I-B) PLC, the Company, and Golden State Petro (IOM I-A) PLC
(“IOM I-A”), together, the Companies, are Isle of Man public limited companies,
each formed for the purpose of acquiring and chartering a VLCC.





Golden
State Petroleum Transport Corporation, GSPTC, a Delaware corporation as an agent
for the Companies, issued 8.04% First Preferred Mortgage Term Notes for
$127,100,000, or the Term Notes and Serial First Preferred Mortgage Notes for
$51,700,000, or the Serial Notes, together Notes,   The principal
amount of the Term Notes and the Serial Notes allocated to us was $63,550,000
and $26,800,000 respectively.  The Serial Notes were fully repaid on
February 1, 2006.  The proceeds from the offering and sale of the
Notes allocated to us were used to fund the construction of a VLCC by Samsung
Corporation and Samsung Heavy Industries Co. Ltd., together the Builders, under
the technical supervision of the Chevron Shipping Company as agent for Chevron,
which is an indirect, wholly-owned subsidiary of Chevron
Corporation.  The VLCC, which we refer to as the Vessel, the “Phoenix
Voyager” was accepted by us under the building contract on March 15, 1999 and
concurrently was delivered to Chevron under an initial charter for a term of
eighteen years (the Initial Charter). The Vessel is a double-hulled carrier of
approximately 308,500 dwt and is currently registered under the Bahamian
Flag.  Chevron’s obligations under the Initial Charter are guaranteed
by Chevron Corporation.





We, along
with IOM I-A, and GSPTC are wholly-owned subsidiaries of Golden State Holdings
I, Limited, or GSH, an Isle of Man holding company.  GSH is
wholly-owned by Independent Tankers Corporation, a Cayman Islands company, or
ITC, which itself is majority owned by Frontline Ltd., or Frontline, a Bermuda
company whose shares are listed on the New York Stock Exchange, London Stock
Exchange and Oslo Stock Exchange.





In
February 2008, Frontline established an intermediary holding company,
Independent Tankers Corporation Limited (“ITCL”) to hold their investment in ITC
and distributed 17.53% of ITCL’s common shares to Frontline’s ordinary
shareholders.





5


We
charter our Vessel to Chevron under the Initial Charter which is expected to
provide, so long as the Initial Charter is in effect, (a) charter hire payments
sufficient to pay (i) our obligations under the Notes, (ii) the management fees
under the management agreements, (iii) the estimated recurring fees, (iv) the
estimated fees payable to the indenture trustee for the Notes (the Indenture
Trustee) and (v) any other costs and expenses incidental to the ownership and
chartering of the Vessel that are to be paid by us and to fund a debt service
reserve fund and (b) that the Vessel will be maintained in accordance with good
commercial maintenance practices, and to arrange for vessel management and
re-marketing services to be available in case any Initial Charter is terminated
or the Vessel is for any other reason returned to our possession and
use.





We were
incorporated in the Isle of Man because it is a jurisdiction whose regulation of
the shipping industry and favorable tax laws have traditionally encouraged the
organization of shipping companies.  The Isle of Man is an “open
registry” jurisdiction, which has traditionally been associated with the
shipping industry.  We conduct our business and are resident in the
Isle of Man; to date we have not incurred taxation on our income and should not,
under current law and practice in such jurisdictions, incur such taxation in the
future.





Our
principal executive offices are located at 15-19 Athol Street, Douglas, Isle of
Man IM1 1LB and our telephone number is (44) 1624-638303.





B.  Business
Overview





Under a
management agreement with the Company (the “Management Agreement”), Frontline
provides administrative, ship management and advisory services to the Company as
manager, or (“Manager”).  Pursuant to the Management Agreement, the
Manager receives a fee, (the “Management Fee,”) of $50,000 per year per Vessel
which is payable semi-annually.  All costs of maintaining our
corporate status, accounting and auditing fees and other related costs, which we
refer to as Recurring Fees, are payable by the Manager from the Management
Fee.





The
Initial Charter


Pursuant
to the Initial Charter, Chevron has agreed to charter the Vessel commencing on
its delivery date and ending on the eighteenth anniversary of such delivery
date.  Chevron has the right to terminate the Initial Charter on five
dates, each, an Optional Termination Date, beginning on the expiration of the
period commencing on the delivery date for such Vessel and terminating on the
eighth anniversary thereof (each, a Fixed Period) and on each of the four
subsequent two-year anniversaries thereof.  During the Fixed Period,
the charter hire shall be $27,199 per day. Charter hire after the Fixed Period
will be $28,500.  During the term of the Initial Charter, we are not
liable for any expense in operating, registering, documenting, insuring,
repairing or maintaining the Vessel and is not required to supply a vessel or
any part thereof if the Vessel or any part thereof is lost, damaged, rendered
unfit for use, confiscated, seized, requisitioned, restrained or
appropriated.  Pursuant to the Initial Charters, Chevron is required
to pay charter hire in respect of the Vessel without offset or deduction for any
reason whatsoever.





If the
optional termination date is the first optional termination date, Chevron was
required to give us (i) non-binding notice of its intent to exercise the option
at least twelve months prior to the optional termination date and (ii)
irrevocable notice of such exercise nine months prior to the optional
termination date. If the optional termination date is any subsequent termination
date, Chevron must give us (i) non-binding notice of its intent to exercise such
option nine months prior to the optional termination date and
(ii)  irrevocable notice of such exercise six months prior to the
optional termination date. As of June 15, 2008, we had not received any notice
of Chevron’s intent to exercise its second optional termination date of March
15, 2009.





6


Remarketing


In the
event Chevron gives us notice of its intent to terminate the Initial Charter,
the Manager, pursuant to the related Management Agreement, is required to engage
a remarketing agent.  McQuilling Brokerage Partners, Inc., or
McQuilling, and ACM Shipping Limited, or ACM Shipping, have agreed to provide on
a non-exclusive basis remarketing services if Chevron exercises its option to
terminate the Initial Charter for the Vessel.  McQuilling, established
in 1972, is a leading New York-based ship broker whose activities encompass all
aspects of chartering, sale and purchase, ship finance, demolition and project
development.  ACM Shipping is a leading London shipbroker that has
strong relationships with the major oil companies.  ACM Shipping has
been in the ship brokerage business since 1982.





If (i)
Chevron elects to terminate the Initial Charter for the Vessel, (ii) an
acceptable replacement charter has not been entered into and (iii) such Vessel
has not been sold, then in order to make scheduled sinking fund and interest
payments on the Notes, if any, and to pay estimated ship expenses for the
related Vessel, minimum bareboat charter hire payments of approximately $21,683
per day per Vessel, would be required upon recharter.  The foregoing
charter hire rates would not cover $10,995,000 of the final principal payment
allocated to the Vessel.  The $10,995,000 is less than current
estimates of the approximate residual value of the Vessel on the date of the
final payment.  No assurance can be given as to the residual or scrap
value of the Vessel on such date of the final payment and no assurance can be
given that the Manager would be able to obtain charters at the foregoing charter
hire rates.





Industry
Conditions





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 our vessel 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 we
engage.





The oil
transportation industry has historically been subject to regulation by national
authorities and through international conventions.  Over recent years,
however, an environmental protection regime has evolved which could have a
significant impact on the operations of participants in the industry in the form
of increasingly more stringent inspection requirements, closer monitoring of
pollution-related events, and generally higher costs and potential liabilities
for the owners and operators of tankers.





In order
to benefit from economies of scale, tanker charterers will typically charter the
largest possible vessel to transport oil or products, consistent with port and
canal dimensional restrictions and optimal cargo lot sizes.  The oil
tanker fleet is generally divided into the following five major types of
vessels, based on vessel carrying capacity:





(i)
            ULCC-size
      range of approximately 320,000 to 450,000
dwt;


(ii)
            VLCC-size
      range of approximately 200,000 to 320,000
dwt;


(iii)
            Suezmax-size
      range of approximately 120,000 to 200,000
dwt;


(iv)
            Aframax-size
      range of approximately 60,000 to 120,000 dwt;
  and


(v)
            small
      tankers of less than approximately 60,000
dwt.





ULCCs and
VLCCs typically transport crude oil in long-haul trades, such as from the
Arabian Gulf to Rotterdam via the Cape of Good Hope.  Suezmax tankers
also engage in long-haul crude oil trades as well as in medium-haul crude oil
trades, such as from West Africa to the East Coast of the United States.
Aframax-size vessels generally engage in both medium-and short-haul trades of
less than 1,500 miles and carry crude oil or petroleum
products.  Smaller tankers mostly transport petroleum products in
short-haul to medium-haul trades.





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 and demand for shipping
capacity.





7


The
factors affecting the supply and demand for tanker vessels are outside of our
control, and the nature, timing and degree of changes in industry conditions are
unpredictable. The factors that influence demand for tanker capacity
include:





·
            changes
      in global crude oil production;


·
            demand
      for oil and production of crude oil and refined petroleum
      products;


·
            changes
      in oil production and refining
capacity;


·
            global
      and regional economic and political
conditions;


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


·
            environmental
      and other regulatory developments;
and


·
            changes
      in seaborne and other transportation patterns, including changes in the
      distances over which cargo is transported due to geographic changes in
      where commodities are produced, oil is refined and cargoes are
      used.





The
factors that influence the supply of tanker capacity include:





·
            the
      number of newbuilding deliveries;


·
            the
      scrapping rate of older vessels;


·
            potential
      conversion of tankers to other
purposes;


·
            port
      or canal congestion;


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


·
            national
      or international regulations that may effectively cause reductions in the
      carrying capacity of vessels or early obsolescence of
    tonnage.





VLCC
demand is primarily a function of demand for Arabian Gulf crude oil, which in
turn is primarily dependent on the economies of the world’s industrial countries
and competition from alternative energy sources. A wide range of economic,
political, social and other factors can significantly affect the strength of the
world’s industrial economies and their demand for Arabian Gulf crude oil. One
such factor is the price of worldwide crude oil. The world’s oil markets have
experienced high levels of volatility in the last 25 years. If oil prices were
to rise dramatically, the economies of the world’s industrial countries may
experience a significant downturn. See Item 5. “Operating and Financial Review
and Prospects - Market Overview and Trend Information”.





Vessel
Values





Tanker
values have generally experienced high volatility. The fair market value of oil
tankers, including the Vessel, can be expected to fluctuate, depending upon
general economic and market conditions affecting the tanker industry and
competition from other shipping companies, types and sizes of vessels, and other
modes of transportation. In addition, as vessels grow older, they may be
expected to decline in value. These factors will affect the value of the vessel
at the termination or expiration of the Initial Charter.





Since the
mid-1970s, during most periods there has been a substantial worldwide oversupply
of crude oil tankers, including VLCCs. In addition, the market for secondhand
VLCCs has generally been weak since the mid-1970s. However, in the last four
years the industry has experienced near historic highs for tanker values.
Notwithstanding the aging of the world tanker fleet and the adoption of new
environmental regulations which will result in a phase-out of many single hull
tankers, significant deliveries of new VLCCs would adversely affect market
conditions.





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. 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.





8


Environmental
and Other Regulations





Government
regulation significantly affects the ownership and operation of our tanker. We
are subject to international conventions, national, state and local laws and
regulations in force in the countries in which our vessel may operate or are
registered. Compliance with such laws, regulations and other requirements
entails significant expense, including vessel modifications and implementation
of certain operating procedures.





A variety
of government and private entities subject our vessel to both scheduled and
unscheduled inspections. These entities include the local port authorities
(United States Coast Guard, harbor master or equivalent), classification
societies, flag state administrations (country of registry) and charterers,
particularly terminal operators and oil companies. Certain of these entities
require us to obtain permits, licenses and certificates for the operation of our
tanker. Failure to maintain necessary permits, certificates or approvals could
require us to incur substantial costs or temporarily suspend the operation of
our vessel.





We
believe that the heightened level of environmental and quality concerns among
insurance underwriters, regulators and charterers is leading to greater
inspection and safety requirements on all vessels and may accelerate the
scrapping of older vessels throughout the tanker industry. Increasing
environmental concerns have created a demand for vessels that conform to
stricter environmental standards. Our charterers, Chevron, are required to
maintain operating standards for our vessel to emphasize operational safety,
quality maintenance, continuous training of our officers and crews and
compliance with United States and international regulations. We believe that the
operation of our vessel is in substantial compliance with applicable
environmental laws and regulations; however, because such laws and regulations
are frequently changed and may impose increasingly stringent requirements, we
cannot predict the ultimate cost of complying with these requirements, or the
impact of these requirements on the resale value or useful life of our tanker.
In addition, a future serious marine incident that results in significant oil
pollution or otherwise causes significant adverse environmental impact could
result in additional legislation or regulation that could negatively affect our
profitability.





As of the
date of this annual report, our vessel complies with the latest IMO and European
Union amended regulations for double-hull requirements, are not subject to
phase-out under IMO and U.S. requirements and current European Union legislation
and are eligible to carry heavy grade oil without any time limitation under IMO
and U.S. requirements and current European Union legislation. Because such laws
and regulations are frequently changed and may impose increasingly stricter
requirements, we cannot predict the ultimate cost of complying with these
requirements, or the impact of these requirements on the resale value or useful
lives of our vessel.




International
Maritime Organization




The
International Maritime Organization, or IMO (the United Nations agency for
maritime safety and the prevention of pollution by ships), has adopted the
International Convention for the Prevention of Marine Pollution from Ships,
1973, as modified by the Protocol of 1978 relating thereto, which has been
updated through various amendments, or the MARPOL Convention. The MARPOL
Convention implements environmental standards including oil leakage or spilling,
garbage management, as well as the handling and disposal of noxious liquids,
harmful substances in packaged forms, sewage and air emissions.  Under
IMO regulations, in order for a tanker to trade in ports of IMO member nations,
a tanker must be of double-hull construction or a mid-deck design with double
sided construction or be of another approved design ensuring the same level of
protection against oil pollution if the tanker:





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





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





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









9


Since the
enactment of these regulations, the IMO has accelerated the timetable for the
phase-out of single-hull oil tankers.





In
December 2003, the Marine Environmental Protection Committee of the IMO, or
MEPC, adopted an amendment to the MARPOL Convention, which became effective in
April 2005. The amendment revised an existing regulation 13G accelerating the
phase-out of single-hull oil tankers and adopted a new regulation 13H on the
prevention of oil pollution from oil tankers when carrying heavy grade oil.
Under the revised regulation, single-hull oil tankers were required to be phased
out no later than April 5, 2005 or the anniversary of the date of delivery of
the vessel on the date or in the year specified in the following
table:





Category
      of Oil Tankers
            
            Date
      or Year for Phase OutCategory
      1 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,
      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above
      carrying other oils, which do not comply with the requirements for
      protectively located segregated ballast tanks
            
            April
      5, 2005 for vessels delivered on April 5, 1982 or earlier 2005 for vessels
      delivered after April 5, 1982Category
      2 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil,
      heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above
      carrying other oils, which do comply with the protectively located
      segregated ballast tank requirements
              and
              Category
      3 - oil tankers of 5,000 dwt and above but less than the tonnage specified
      for Category 1 and 2 tankers.
            
            April
      5, 2005 for vessels delivered on April 5, 1977 or earlier
              2005
      for vessels delivered after April 5, 1977 but before January 1,
      1978
              2006
      for vessels delivered in 1978 and 1979
              2007
      for vessels delivered in 1980 and 1981
              2008
      for vessels delivered in 1982
              2009
      for vessels delivered in 1983
              2010
      for vessels delivered in 1984 or
later





Under the
revised regulations, a flag state may permit continued operation of certain
Category 2 or 3 tankers beyond their phase out date in accordance with the above
schedule. Under regulation 13G, the flag state may allow for some newer
single-hull oil tankers registered in its country that conform to certain
technical specifications to continue operating until the earlier of the
anniversary of the date of delivery of the vessel in 2015 or the 25th
anniversary of their delivery. Under regulations 13G and 13H, certain Category 2
and 3 tankers fitted only with double bottoms or double sides may be allowed by
the flag state to continue operations until their 25th anniversary of delivery.
Any port state, however, may deny entry of those single-hull oil tankers that
are allowed to operate until the earlier of their anniversary date of delivery
in 2015 or the year in which the vessel reaches 25 years of age after the date
of its delivery, whichever is earlier under any of the flag state
exemptions.  These regulations have been adopted by over 150 nations,
including many of the jurisdictions in which our tanker operates.





Because
our vessel is of double-hull construction, it is not subject to the current
phase-out regulations of the IMO.





In
September 1997, the IMO adopted Annex VI to the MARPOL Convention to
address air pollution from vessels. Annex VI was ratified in May 2004, and
became effective in May 2005. Annex VI sets limits on sulfur oxide and nitrogen
oxide emissions from all commercial vessel exhausts and prohibits deliberate
emissions of ozone depleting substances (such as halons and
chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the
shipboard incineration of specific substances. Annex VI also includes a global
cap on the sulfur content of fuel oil and allows for special areas to be
established with more stringent controls on sulfur emissions. We believe that we
are in substantial compliance with the Annex VI regulations. Additional or new
conventions, laws and regulations may be adopted that could adversely affect our
ability to manage our vessel. For example, in April 2008, MEPC approved proposed
amendments to Annex VI regarding particulate matter, nitrogen oxide and sulfur
oxide emissions standards. The emissions program described in the proposal would
reduce air pollution from vessels by establishing a series of progressive
standards to further limit the sulfur content in fuel oil, which would be phased
in through 2020, and by establishing new tiers of nitrogen oxide emission
standards for new marine diesel engines, depending on their date of
installation. These amendments will be considered for adoption by the MEPC in
October 2008, and could enter into force in 2010.





10


In
addition, the IMO adopted the International Convention for the Control and
Management of Ships’ Ballast Water and Sediments, or the BWM Convention, in
February 2004. The BWM Convention’s implementing regulations call for a phased
introduction of mandatory ballast water exchange requirements, to be replaced in
time with mandatory concentration limits. The BWM Convention will not enter into
force until 12 months after it has been adopted by 30 states, the combined
merchant fleets of which represent not less than 35% of the gross tonnage of the
world’s merchant shipping tonnage. To date, there has not been sufficient
adoption of this standard for it to take force.





The
operation of our vessel is also affected by the requirements set forth in the
IMO’s Management Code for the Safe Operation of Ships and Pollution Prevention,
or ISM Code. The ISM Code requires vessel-owners and bareboat charterers to
develop and maintain an extensive “Safety Management System” that includes the
adoption of a safety and environmental protection policy setting forth
instructions and procedures for safe operation and describing procedures for
dealing with emergencies. We rely on the safety management system that has been
developed by Chevron.





The ISM
Code requires that vessel operators obtain a safety management certificate for
each vessel they operate. This certificate evidences compliance by a vessel’s
management with the ISM Code requirements for a safety management system. No
vessel can obtain a certificate unless its manager has been awarded a Document
of Compliance, issued by each flag state, under the ISM Code. Chevron is
required to renew these documents of compliance and safety management
certificates periodically.





Non-compliance
with the ISM Code and other IMO regulations may subject the vessel-owner or a
bareboat charterer to increased liability, may lead to decreases in available
insurance coverage for affected vessels and may result in a tanker’s denial of
access to, or detention in, some ports. Both the United States Coast Guard and
EU authorities have indicated that vessels not in compliance with the ISM Code
will be prohibited from trading in U.S. and EU ports, respectively.





Although
the United States is not a party to these conventions, many countries have
ratified and follow the liability plan adopted by the IMO and set out in the
International Convention on Civil Liability for Oil Pollution Damage of 1969.
Under this convention and depending on whether the country in which the damage
results is a party to the 1992 Protocol to the International Convention on Civil
Liability for Oil Pollution Damage, 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.
Under an amendment to the Protocol that became effective on November 1,
2003, for vessels of 5,000 to 140,000 gross tons (a unit of measurement for the
total enclosed spaces within a vessel), liability will be limited to
approximately $6.7 million plus $933 for each additional gross ton over
5,000. For vessels of over 140,000 gross tons, liability will be limited to
approximately $133.0 million. As the convention calculates liability in
terms of a basket of currencies, these figures are based on currency exchange
rates on June 1, 2008. Under the 1969 Convention, the right to limit liability
is forfeited where the spill is caused by the owner’s actual fault; under the
1992 Protocol, a vessel owner cannot limit liability where the spill is caused
by the owner’s intentional or reckless conduct. Vessels trading to states that
are parties to these conventions must provide evidence of insurance covering the
liability of the owner. In jurisdictions where the International Convention on
Civil Liability for Oil Pollution Damage 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 that convention. Operators, such as
Chevron in the case of our Vessel, are required to insure their vessels with
pollution liability insurance in the maximum commercially available amount of
$1 billion per incident per vessel. We believe that our P&I insurance
will cover the liability under the plan adopted by the IMO.





IMO
regulations also require owners and operators of vessels to adopt Ship Oil
Pollution Emergency Plans, or SOPEPs. Periodic training and drills for response
personnel and for vessels and their crews are required.





The IMO
continues to review and introduce new regulations. It is impossible to predict
what additional regulations, if any, may be passed by the IMO and what effect,
if any, such regulations might have on our operations.





11


United
States Oil Pollution Act of 1990 and Comprehensive Environmental Response,
Compensation, and Liability Act





The
United States regulates the tanker industry with an extensive regulatory and
liability regime for environmental protection and cleanup of oil spills,
consisting primarily of OPA, and the Comprehensive Environmental Response,
Compensation, and Liability Act, or CERCLA. OPA affects all owners and operators
whose vessels trade with the United States or its territories or possessions, or
whose vessels operate in the waters of the United States, which include the
United States territorial sea and the 200 nautical mile exclusive economic zone
around the United States. CERCLA imposes liability for cleanup and natural
resource damage from the release of hazardous substances (other than oil)
whether on land or at sea. Both OPA and CERCLA impact our
operations.





Under
OPA, vessel-owners, operators and bareboat charterers are “responsible parties”
who are jointly, severally and strictly liable (unless the spill results solely
from the act or omission of a third party, an act of God or an act of war) for
all containment and clean-up costs and other damages arising from oil spills
from their vessels. These other damages are defined broadly to
include:





·
            natural
      resource damage and related assessment
costs;





·
            real
      and personal property damage;





·
            net
      loss of taxes, royalties, rents, fees and other lost
    revenues;





·
            net
      cost of public services necessitated by a spill response, such as
      protection from fire, safety or health hazards;
  and





·
            loss
      of subsistence use of natural
resources.





OPA
previously limited the liability of responsible parties to the greater of $1,200
per gross ton or $10.0 million per tanker that is over 3,000 gross tons (subject
to possible adjustment for inflation). Amendments to OPA signed into law in July
2006 increased these limits on the liability of responsible parties to the
greater of $1,900 per gross ton or $16.0 million per double-hull tanker that is
over 3,000 gross tons. The act specifically permits individual states to impose
their own liability regimes with regard to oil pollution incidents occurring
within their boundaries, and some states have enacted legislation providing for
unlimited liability for discharge of pollutants within their waters. In some
cases, states which have enacted this type of legislation have not yet issued
implementing regulations defining tanker owners’ responsibilities under these
laws. CERCLA, which applies to owners and operators of vessels, contains a
similar liability regime and provides for cleanup, removal and natural resource
damages. Liability under CERCLA is limited to the greater of $300 per gross ton
or $5.0 million.





These
limits of liability do not apply, however, where the incident is caused by
violation of applicable U.S. federal safety, construction or operating
regulations, or by the responsible party’s gross negligence or willful
misconduct. These limits also do not apply if the responsible party fails or
refuses to report the incident or to cooperate and assist in connection with the
substance removal activities. OPA and CERCLA each preserve the right to recover
damages under existing law, including maritime tort law. We believe that we are
in substantial compliance with OPA, CERCLA and all applicable state regulations
in the ports where our vessel calls.





OPA also
requires owners and operators of vessels to establish and maintain with the U.S.
Coast Guard evidence of financial responsibility sufficient to meet the limit of
their potential strict liability under the act. The U.S. Coast Guard has enacted
regulations requiring evidence of financial responsibility in the amount of
$1,500 per gross ton for tankers, coupling the former OPA limitation on
liability of $1,200 per gross ton with the CERCLA liability limit of $300 per
gross ton. On February 5, 2008, the U.S. Coast Guard proposed a new rule that
will require evidence of financial responsibility in amounts that reflect the
higher limits of liability imposed by the July 2006 amendments to OPA, as
described above. Under the regulations, evidence of financial responsibility may
be demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA
regulations, an owner or operator of more than one tanker is required to
demonstrate evidence of financial responsibility for the entire fleet in an
amount equal only to the financial responsibility requirement of the tanker
having the greatest maximum strict liability under OPA and CERCLA. We have
provided the evidence of financial responsibility in the form of guarantees
issued by a guarantor approved by the United States Coast Guard and received
certificates of financial responsibility from the United States Coast Guard for
our vessel that calls in United States waters.





12


Under
OPA, with certain limited exceptions, all newly-built or converted vessels
operating in U.S. waters must be built with double-hulls, and existing vessels
that do not comply with the double-hull requirement will be prohibited from
trading in U.S. waters over a 20-year period (1995-2015) based on size, age and
place of discharge, unless retrofitted with double-hulls. Notwithstanding the
prohibition to trade schedule, the act currently permits existing single-hull
and double-sided tankers to operate until the year 2015 if their operations
within U.S. waters are limited to discharging at the Louisiana Offshore Oil
Port, or LOOP, or off-loading by lightering within authorized lightering zones
more than 60 miles off-shore. Lightering is the process by which vessels at sea
off-load their cargo to smaller vessels for ultimate delivery to the discharge
port. Our vessel complies with U.S. double-hull requirements and will not be
subject to the phase-outs described above.





OPA also
amended the Federal Water Pollution Control Act to require owners or operators
of tankers operating in the waters of the United States to file vessel response
plans with the United States Coast Guard, and their tankers are required to
operate in compliance with their United States Coast Guard approved plans. These
response plans must, among other things:





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





·
            describe
      crew training and drills; and





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





The
vessel response plan for our tanker operating in the waters of the United States
has been approved by the United States Coast Guard. In addition, the United
States Coast Guard has announced it intends to propose similar regulations
requiring certain vessels to prepare response plans for the release of hazardous
substances. Our vessel currently carries cargoes to U.S. waters regularly and we
believe that it is suitable to meet OPA and other U.S. environmental
requirements and that it would also qualify for trade if chartered to serve U.S.
ports.





In
addition, the United States Clean Water Act prohibits the discharge of oil or
hazardous substances in United States navigable waters and imposes strict
liability in the form of penalties for unauthorized discharges. The Clean Water
Act also imposes substantial liability for the costs of removal, remediation and
damages and complements the remedies available under OPA and CERCLA, discussed
above. The United States Environmental Protection Agency, or EPA, has exempted
the discharge of ballast water and other substances incidental to the normal
operation of vessels in U.S. ports from Clean Water Act permitting requirements.
However, on March 31, 2005, a U.S. District Court ruled that the EPA exceeded
its authority in creating an exemption for ballast water. On September 18, 2006,
the court issued an order invalidating the exemption in the EPA’s regulations
for all discharges incidental to the normal operation of a vessel as of
September 30, 2008, and directing the EPA to develop a system for regulating all
discharges from vessels by that date. Under the court’s ruling, owners and
operators of vessels visiting U.S. ports would be required to comply with the
Clean Water Act permitting program to be developed by the EPA or face penalties.
The EPA has appealed this decision, and oral arguments on the appeal were heard
by the Ninth Circuit Court of Appeals on August 13, 2007. No decision has
yet been issued.  In June 2007, the EPA provided notice and solicited
public comment regarding its intention to promulgate rules governing the
regulation of ballast water discharges and other discharges incidental to the
normal operation of vessels. If the EPA’s exemption is ultimately repealed, our
vessels may be subject to Clean Water Act permit requirements that could include
ballast water treatment obligations that could increase the cost of operating in
the United States. For example, this could require the installation of equipment
on our vessel to treat ballast water before it is discharged or the
implementation of other port facility disposal arrangements or procedures at
potentially substantial cost, and/or otherwise restrict our vessel from entering
U.S. waters. Various states have also enacted legislation restricting ballast
water discharges and the introduction of non-indigenous species considered to be
invasive. These and any similar restrictions enacted in the future could
increase the costs of operating in the relevant waters.





13


Other
Regulations





The U.S.
Clean Air Act of 1970, as amended by the Clean Air Act Amendments of 1977 and
1990, or the CAA, required the EPA to promulgate standards applicable to
emissions of volatile organic compounds and other air contaminants. Our vessel
is subject to vapor control and recovery requirements for certain cargoes when
loading, unloading, ballasting, cleaning and conducting other operations in
regulated port areas. Our vessel that operates in such port areas with
restricted cargoes are equipped with vapor recovery systems that satisfy these
requirements. The CAA also requires states to draft State Implementation Plans,
or SIPs, designed to attain national health-based air quality standards in
primarily major metropolitan and/or industrial areas. Several SIPs regulate
emissions resulting from vessel loading and unloading operations by requiring
the installation of vapor control equipment. As indicated above, our vessel
operating in covered port areas are already equipped with vapor recovery systems
that satisfy these existing requirements. The EPA and the state of California,
however, have each proposed more stringent regulations of air emissions from
ocean-going vessels. Although a risk exists that new regulations could require
significant capital expenditures and otherwise increase our costs, based on the
regulations that have been proposed to date, we believe that no material capital
expenditures beyond those currently contemplated and no material increase in
costs are likely to be required.





The U.S.
National Invasive Species Act, or NISA, was enacted in 1996 in response to
growing reports of harmful organisms being released into U.S. ports through
ballast water taken on by vessels in foreign ports. The United States Coast
Guard adopted regulations under NISA in July 2004 that impose mandatory ballast
water management practices for all vessels equipped with ballast water tanks
entering U.S. waters. These requirements can be met by performing mid-ocean
ballast exchange, by retaining ballast water on board the vessel, or by using
environmentally sound alternative ballast water management methods approved by
the United States Coast Guard. Mid-ocean ballast exchange is the primary method
for compliance with the United States Coast Guard regulations, since holding
ballast water can prevent vessels from performing cargo operations upon arrival
in the United States, and alternative methods are still under development.
Vessels that are unable to conduct mid-ocean ballast exchange due to voyage or
safety concerns may discharge minimum amounts of ballast water (in areas other
than the Great Lakes and the Hudson River), provided that they comply with
recordkeeping requirements and document the reasons they could not follow the
required ballast water management requirements. The United States Coast Guard is
developing a proposal to establish ballast water discharge standards, which
could set maximum acceptable discharge limits for various invasive species,
and/or lead to requirements for active treatment of ballast water. The U.S.
House of Representatives has recently passed a bill that amends NISA by
prohibiting the discharge of ballast water unless it has been treated with
specified methods or acceptable alternatives. Similar bills have been introduced
in the U.S. Senate, but we cannot predict which bill, if any, will be enacted
into law. In the absence of federal standards, states have enacted legislation
or regulations to address invasive species through ballast water and hull
cleaning management and permitting requirements. The state of California has
recently enacted legislation extending its ballast water management program to
regulate the management of “hull fouling” organisms attached to vessels and
adopted regulations limiting the number of organisms in ballast water
discharges. A U.S. District Court dismissed challenges to the state of
Michigan’s ballast water management legislation mandating the use of various
techniques for ballast water treatment, and an appeal is now pending in the
Sixth Circuit Court of Appeals. Other states may proceed with the enactment of
similar requirements that could increase the costs of operating in state
waters.




14


European
Union Tanker Restrictions




In
July 2003, in response to the M/T Prestige oil spill in
November 2002, the European Union adopted legislation, which was amended in
October 2003, that prohibits all single-hull tankers from entering into its
ports or offshore terminals by 2010 or earlier, depending on their age. The
European Union has also already banned all single-hull tankers carrying heavy
grades of oil from entering or leaving its ports or offshore terminals or
anchoring in areas under its jurisdiction. Commencing in 2005, certain
single-hull tankers above 15 years of age will also be restricted from
entering or leaving European Union ports or offshore terminals and anchoring in
areas under European Union jurisdiction. The European Union is also considering
legislation that would: (1) ban manifestly sub-standard vessels (defined as
those more than 15 years old that have been detained by port authorities at
least twice in a six month period) from European waters and create an obligation
of port states to inspect vessels posing a high risk to maritime safety or the
marine environment; and (2) provide the European Union with greater
authority and control over classification societies, including the ability to
seek to suspend or revoke the authority of negligent societies. The sinking of
the Prestige and
resulting oil spill in November 2002 has led to the adoption of other
environmental regulations by certain European Union nations, which could
adversely affect the remaining useful life of our tanker and our ability to
generate income from it. It is impossible to predict what legislation or
additional regulations, if any, may be promulgated by the European Union or any
other country or authority.





Greenhouse
Gas Regulation





In
February 2005, the Kyoto Protocol to the United Nations Framework Convention on
Climate Change, which we refer to as the Kyoto Protocol, entered into force.
Pursuant to the Kyoto Protocol, adopting countries are required to implement
national programs to reduce emissions of certain gases, generally referred to as
greenhouse gases, which are suspected of contributing to global warming.
Currently, the emissions of greenhouse gases from international shipping are not
subject to the Kyoto Protocol. However, the European Union has indicated that it
intends to propose an expansion of the existing European Union emissions trading
scheme to include emissions of greenhouse gases from vessels. In the United
States, the California Attorney General and a coalition of environmental groups
in October 2007 petitioned the EPA to regulate greenhouse gas emissions from
ocean-going vessels under the Clean Air Act. Any passage of climate control
legislation or other regulatory initiatives by the IMO, European Union or
individual countries where we operate that restrict emissions of greenhouse
gases could entail financial impacts on our operations that we cannot predict
with certainty at this time.





Vessel
      Security Regulations





Since the
terrorist attacks of September 11, 2001, there have been a variety of
initiatives intended to enhance vessel security. On November 25, 2002, the
Maritime Transportation Security Act of 2002, or the MTSA, came into effect. To
implement certain portions of the MTSA, in July 2003, the United States
Coast Guard issued regulations requiring the implementation of certain security
requirements aboard vessels operating in waters subject to the jurisdiction of
the United States. Similarly, in December 2002, amendments to the
International Convention for the Safety of Life at Sea, or SOLAS, created a new
chapter of the convention dealing specifically with maritime security. The new
chapter came into effect in July 2004 and imposes various detailed security
obligations on vessels and port authorities, most of which are contained in the
newly created International Ship and Port Facilities Security Code, or the ISPS
Code. The ISPS Code is designed to protect ports and international shipping
against terrorism. After July 1, 2004, to trade internationally, a vessel must
attain an International Ship Security Certificate from a recognized security
organization approved by the vessel’s flag state.





Among the various requirements
are:





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





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





·
            the
      development of vessel security
plans;





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





15


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





·
            compliance
      with flag state security certification
  requirements.





The U.S.
Coast Guard regulations, intended to align with international maritime security
standards, exempt from MTSA vessel security measures non-U.S. vessels that have
on board, as of July 1, 2004, a valid ISSC attesting to the vessel’s compliance
with SOLAS security requirements and the ISPS Code. We have implemented the
various security measures addressed by MTSA, SOLAS and the ISPS Code, and our
fleet is in compliance with applicable security requirements.




Inspection
by Classification Societies





Every
seagoing vessel must be “classed” by a classification society. The
classification society certifies that the vessel is “in class,” signifying that
the vessel has been built and maintained in accordance with the rules of the
classification society and complies with applicable rules and regulations of the
vessel’s country of registry and the international conventions of which that
country is a member. In addition, where surveys are required by international
conventions and corresponding laws and ordinances of a flag state, the
classification society will undertake them on application or by official order,
acting on behalf of the authorities concerned.





The
classification society also undertakes or requests other surveys and checks that
are required by regulations and requirements of the flag state. These surveys
are subject to agreements made in each individual case and/or to the regulations
of the country concerned.





For
maintenance of the class, regular and extraordinary surveys of hull, machinery,
including the electrical plant, and any special equipment classed are required
to be performed as follows:





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





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





•
            Class
      Renewal Surveys. Class renewal surveys, also known as special
      surveys, are carried out for the vessel’s hull, machinery, including the
      electrical plant and for any special equipment classed, at the intervals
      indicated by the character of classification for the hull. At the special
      survey, the vessel is thoroughly examined, including ultrasonic gauging to
      determine the thickness of the steel structures. Should the thickness be
      found to be less than class requirements, the classification society would
      prescribe steel renewals. Substantial amounts of money may have to be
      spent for steel renewals to pass a special survey if the vessel
      experiences excessive wear and tear. The vessel’s machinery is surveyed on
      a continuous survey cycle, in which every part of the vessel’s machinery
      would be surveyed within a five-year
cycle.





All areas
subject to survey as defined by the classification society are required to be
surveyed at least once per class period, unless shorter intervals between
surveys are otherwise required. The period between two subsequent surveys of
each area must not exceed five years.







16


Insurance





The
operation of any ocean-going vessel carries an inherent risk of catastrophic
marine disasters, environmental mishaps, cargo and property losses or damage and
business interruptions caused by adverse weather and ocean conditions,
mechanical failures, human error, political action in various countries, war,
terrorism, piracy, labour strikes and other circumstances or events. Pursuant to
the Initial Charter, the Vessel may be operated through out the world in any
lawful trade for which the Vessel is suitable, including carrying oil and its
products. In the past, political conflicts in many regions, particularly in the
Arabian Gulf, have included attacks on tankers, mining of waterways and other
efforts to disrupt shipping in the area. Vessels trading in such regions have
also been subject to acts of terrorism and piracy. In addition, the carriage of
petroleum products is subject to the risk of spillage and
leakage.  Any such event may result in increased costs or the loss of
revenues or assets, including our Vessel.





Under the
Initial Charter, Chevron is entitled to self-insure against marine and war risks
relating to the Vessel and against protections and indemnity risks relating to
the Vessel during the term of the Initial Charter and, accordingly, purchasers
of the Notes cannot rely on the existence of third-party insurance. There can be
no assurance that all risks will be adequately insured against, that any
particular loss will be covered or that we will be able to procure adequate
insurance coverage at commercially reasonable rates in the future.  In
particular, stricter environmental regulations may result in increased costs
for, or the lack of availability or, insurance against the risks of
environmental damage or pollution.





Chevron
will, pursuant to the Initial Charter, indemnify us from damages arising from a
failure to maintain any financial responsibility requirements whether relating
to oil or other pollution damage. Chevron will also indemnify us to the extent
losses, damages or expenses are incurred by us relating to oil or other
pollution damage as a result of the operation of the Vessel by
Chevron.





C.  Organizational
Structure





We, IOM
I-A, and GSPTC are wholly-owned subsidiaries of GSH, an Isle of Man holding
company.  GSH is a wholly-owned subsidiary of ITC, a Cayman Islands
corporation.





In
February 2008, Frontline established an intermediary holding company, ITCL to
hold their investment in ITC and distributed 17.53% of ITCL’s common shares to
Frontline’s ordinary shareholders.





The
Company does not have any subsidiaries.





D.  Property,
Plant and Equipment





Other
than the Vessel referred to above, the Company has no property.





ITEM
4A.                      
UNRESOLVED STAFF COMMENTS





None





17


ITEM
5.                      OPERATING
AND FINANCIAL REVIEW AND PROSPECTS





A.  Operating
Results





Overview





We were
formed as an Isle of Man public limited company for the purpose of acquiring and
chartering the Vessel.





At the
time of the issuance of the Notes by GSPTC, which we refer to as the “Closing
Date”, we (i) received the net proceeds from the sale of the Notes, (ii) paid
the first installment of the purchase price of the Vessel, (iii) paid certain
legal, printing, rating and other fees and expenses, and (iv) deposited the
balance of the net proceeds from the sale of the Notes into a guaranteed
investment contract, or Pre-Funding Account.  In addition, we entered
into a building contract (the “Building Contract”), the Technical Supervision
Agreements, the Initial Charter, the Management Agreement and certain security
agreements for the benefit of the holders of the Notes and became the
beneficiary of a Building Contract guarantee and the Chevron
guarantee.





Between
the Closing Date and the delivery date of its Vessel, our operations consisted
solely of (i) making payments of interest on the Notes, (ii) making payments of
Recurring Fees and Management Fees, (iii) making additional installments under
the building contracts, (iv) receiving interest on amounts held in the
Pre-Funding Account, (v) receiving certain non-cash contributions from the
Technical Supervisor of services and Owners’ Items and (vi) fulfilling its
obligations under a Registration Rights Agreement.





The
Vessel was accepted by us under the Building Contract on March 15, 1999 and was
concurrently delivered to Chevron.





Following
delivery of the Vessel, our operations consist solely of (i) receiving charter
hire payments under its Initial Charter, any Acceptable Replacement Charter and
other charters, (ii) receiving proceeds from the sale, if any, of the Vessel,
(iii) making payments of interest and principal on the Notes, (iv) making
payments of Recurring Fees and Management Fees and (v) receiving interest income
on amounts held in the trust accounts.





Market
Overview and Trend Information





At the
beginning of 2007, the daily TCE was approximately $47,000 for VLCCs with the
segment strengthening in the first quarter of 2007 following weakness at the end
of 2006. A strike at the port in Lavera, France in late March, resulted in a
spike in VLCC earnings though ultimately, the earnings gradually declined
throughout the second and third quarters of 2007. The primary reasons for the
decline can be attributed to reduced global oil production in the summer months,
and a shift in the price structure on oil moving from a position where current
prices are higher than expected to a position where future price are expected to
be in excess of current prices. This initiated a significant draw on crude
stocks worldwide. Volatility, the trademark of these tanker segments,
disappeared until the sharp increase in VLCC rates in mid-November.





18


This
sharp increase in VLCC rates was created in part by the discounting of crude
prices by Saudi Aramco in late November to mainly U.S. refiners. This resulted
in the increased demand for VLCCs between the last week in November and the
third week in December, and had the effect of upsetting the balance of supply
and demand in owners’ favor, which resulted in increased rates which shipowners
successfully exploited. Additionally, the market was not hurt by the December
oil spill caused by a Chinese owned single hull vessel off the coast of South
Korea. Another important factor which contributed to the increase in rates was
the joint decision by several major owners to reduce laden and ballast speeds in
order to save bunkers and reduce costs. In a low demand market when bunkers cost
as much as an additional $50,000 per day, the reduction of speed from 15 to 12
knots saved an estimated $20,000 per day and reduced the overall ‘market
capacity’ by approximately 10%.





The
increased number of VLCCs marked for conversions also contributed to the
increase in rates. At the end of 2007, it is estimated that somewhere between 10
and 15 units had been removed from the market, reducing single hull availability
in locations such as the Arabian Gulf.





Vessels
have, in connection with the increased rates and volatility towards the end of
the year been fixed on more speculative short-term time charters than we have
seen in the past. According to Clarksons, the average TCE for the year was
approximately $57,000 per day for a double hulled VLCC.





The
current trend is for oil majors to avoid employing single hull tonnage when
transporting persistent oils because non-single hull vessels are less likely to
be inspected. Oil traders with crude or fuel oil cargoes often require double
hull tonnage in order to have full flexibility regarding cargo delivery. Thus,
single hull ships no longer trade at their full capacity compared to the double
hull vessels. This implies a further gap in the already existing ‘two tier
market’ between the double and the single hull vessels.





Bunker
prices followed the price fluctuations in the oil market closely in 2007 with
Fujairah’s lowest bunker quote for the year set early January at $256 per metric
ton and the highest set early November at $513 per metric ton. The average
bunker price in 2007 was estimated to be approximately $374 per metric
ton.





It was
reported by the International Energy Agency, or IEA, in March 2008 that average
OPEC Oil production, including Iraq but not Angola, was approximately 29.1
million barrels per day during 2007, a 0.7 million barrel per day decrease from
2006. Saudi Arabia and Venezuela contributed the most to the reduced crude oil
productions by approximately 0.65 million barrels per day while Iran and Iraq
offset this to a certain degree with increased production by approximately 0.26
million barrels per day. The balance stems from minor changes in all remaining
OPEC countries. On December 1, 2007, the Republic of Ecuador became the
thirteenth member of OPEC and thereby rejoined the Organization after an absence
of a decade and a half. The inclusion of the Republic of Ecuador could
strengthen the capability of OPEC in fulfilling its objectives and help to
further stabilize the market.





19


OPEC-12
and Iraq are expected to reach a production capacity of 35.8 million barrels per
day in 2008 according to IEA. Production could accelerate in 2008 as capacity at
the start of the year was at 32 million barrels per day. The growth is expected
to be heavily skewed towards Saudi Arabia, Nigeria and UAE together accounting
for approximately 75% of the net increase.





The IEA
further estimates that the average world oil demand was 85.8 million barrels per
day in 2007, a 1.1% increase from 2006. For 2008 a 2.0% or 1.7 million barrels
per day growth is forecasted in world oil demand with China, Latin America and
the Middle East as the main drivers.





The
International Monetary Fund, or IMF, expect global growth to moderate to 4.1% in
2008, 0.8 % lower than in 2007 according to their February 2008 update. In the
United States, growth is expected to come down to 1.5% this year, from 2.2% in
2007. Growth is also expected to ease in Europe, Japan and in emerging markets
and developing countries. China’s growth is projected to remain rapid in 2008,
albeit a little below the torrid pace in 2007 of 11.4%.





The total
VLCC fleet increased by 1.9% in 2007 to 489 vessels with a total of 28 new
vessels delivered to owners during 2007 with 28 new orders made. The total order
book amounted to 176 vessels at the end of the year, which represented
approximately 36% of the existing fleet.





Industry
sources expect 40 VLCCs to be delivered from shipyards during 2008.





We
believe it is likely that more tankers will be either converted or scrapped
compared to recent years. Frontline estimates that approximately 40 VLCCs will
be converted for non-trading purposes in 2008, approximately 90% to VLOC and the
balance to FSO/FPSO. It is also likely that parts of the order book will be
delayed as a function of the uncertainty of the delivery schedule for several
yards due to financing issues. It is expected that these elements together will
cushion the fleet growth.





Operating
results





Year
ended December 31, 2007 compared with the year ended December 31,
2006





Total
Revenues





(in
      thousands of $)
            
            2007
            
            
            2006
            
            
            %
      ChangeCharter
      income
            
            
            10,305
            
            
            
            9,928
            
            
            
            3.8
            %Interest
      income
            
            
            648
            
            
            
            351
            
            
            
            84.6
            %





Charter
income increased in line with expectations for the fixed charter period ended in
March 2007.  The daily charter rate paid by Chevron increased from
$27,199 per day to $28,500 per day at this time for the optional period of the
charter.  Interest income increased as a result of the rising cash
balances held.





20


Expenses





(in
      thousands of $)
            
            2007
            
            
            2006
            
            
            %
      ChangeInterest
      expense
            
            
            (5,108
            )
            
            
            (5,135
            )
            
            
            0.5
            %





Interest
expense has decreased in line with expectations as the Notes are
repaid.





Year
ended December 31, 2006 compared with the year ended December 31,
2005





Total
Revenues





(in
      thousands of $)
            
            2006
            
            
            2005
            
            
            %
      ChangeCharter
      income
            
            
            9,928
            
            
            
            9,928
            
            
            
            -Interest
      income
            
            
            351
            
            
            
            325
            
            
            
            8
            %





Charterhire
for the fixed period of the charter was $27,199 per day therefore no fluctuation
is appropriate.  Interest income has risen as result of a global
interest rates rising.





Expenses





(in
      thousands of $)
            
            2006
            
            
            2005
            
            
            %
      ChangeInterest
      expense
            
            
            (5,135
            )
            
            
            (5,436
            )
            
            
            5.5
            %





See
explanation for 2007.





Liquidity
and Capital Resources





As of
December 31, 2007, revenues from the Initial Charter were sufficient to pay our
obligations under the Term Notes. Chevron may elect to terminate the Initial
Charter on the next specified termination date, March 15, 2011. If the Initial
Charter is terminated by Chevron, the Manager, acting on our behalf, will
attempt to find an acceptable replacement charter for the Vessel.  If
an acceptable replacement charter is commercially unavailable, the Manager will
solicit bids for the sale or re-charter of our Vessel.  The Manager’s
ability to obtain an acceptable replacement charter, to sell the Vessel or
re-charter the Vessel will depend on market rates for new and used vessels, both
of which will depend on the supply of and demand for tanker capacity for oil
transportation, and the advantages or disadvantages of the Vessel compared with
other vessels available at the time.




Off-balance
Sheet Arrangements


None





21


Tabular
disclosure of contractual obligations





As at
December 31, 2007, we had the following contractual obligations and
commitments:





Payments
      due by period(in
      thousands of $)
            
            Less
      than 1 year
            
            
            1-3
      years
            
            
            3-5
      years
            
            
            More
      than 5 years
            
            
            TotalTerm
      Notes (8.04%)
            
            
            2,920
            
            
            
            6,580
            
            
            
            7,700
            
            
            
            46,350
            
            
            
            63,550Total
      contractual obligations
            
            
            2,920
            
            
            
            6,580
            
            
            
            7,700
            
            
            
            46,350
            
            
            
            63,550





Critical
Accounting Policies





Our
principal accounting policies are described in Note 2 to the financial
statements, which are included in Item 18 “Financial Statements” of this Annual
Report.  The most critical accounting policies include:





Revenue
Recognition




Revenue
is generated from bareboat charter hire and is recorded over the term of the
charter as service is provided.





Vessel,
Depreciation and Impairment




The cost
of the Vessel is depreciated to estimated residual value, on a straight-line
basis over the Vessel’s remaining economic useful life. Management estimates the
useful life of the Vessel to be 25 years and this is a common life expectancy
applied in the shipping industry.  If the estimated economic useful
life is incorrect, or circumstances change and the estimated economic useful
life has to be revised, an impairment loss could result in future periods and/or
annual depreciation expense could be increased. Our Vessel is reviewed for
impairment whenever events or changes in circumstances indicate that their
carrying amount may not be recoverable. Factors we consider important that could
affect recoverability and trigger impairment include significant
underperformance relative to expected operating results, new regulations that
change the estimated useful economic lives of our Vessel and significant
negative industry or economic trends.  In assessing the recoverability
of the Vessel’s carrying amounts when an indicator of impairment is present, we
must make assumptions regarding estimated future cash flows. These assumptions
include assumptions about the spot market rates for vessels, the revenues the
Vessel could earn under time charter, voyage charter or bareboat charter, the
operating costs of our Vessel and the estimated economic useful life of our
Vessel. In making these assumptions, the Company refers to historical trends and
performance as well as any known future factors. If our review indicates
impairment, an impairment charge is recognized based on the difference between
carrying value and fair value. Fair value is typically established using an
average of three independent valuations.





ITEM
6.                      DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES





A.  Directors
and Senior Management





The
Company does not have any employees involved in the management of the
Vessel.  The following table sets forth the name, age and principal
position with the Company of each of its directors and officers.





Name
              Age
              Position with the
CompanyAndrew
      James Baker
              48
              SecretaryKate
      Blankenship
              43
              DirectorJohn
      Michael Killip
              63
              DirectorTor
      Olav Trøim
              45
              Director


22


Andrew
James Baker:  Isle of Man resident secretary since November
1996.  Mr. Baker is a solicitor with Cains, Isle of Man who are legal
advisers to the Company and as such are entitled to charge for professional
advice and services.  He has been a solicitor with Cains since March
1994.  Prior to that he was a partner with the law firm Pennington’s
since 1987.





Kate
Blankenship has been a Director of Golden State Petro (IOM I-B) PLC since
November 1, 1998.  Mrs. Blankenship has been a director of the Manager
since March 2000. Mrs. Blankenship served as the Chief Accounting Officer and
Secretary of Frontline between 1994 and October 2005.  Mrs.
Blankenship also serves as director of Golar LNG Limited, Ship Finance
International Limited, Seadrill Limited and Golden Ocean Group Limited. She is a
member of the Institute of Chartered Accountants in England and
Wales.





John
Michael Killip:  non-executive Isle of Man resident director since
February 13, 2001.  Mr. Killip is a manager with Equity Limited, the
corporate service provider owned by Cains Advocates Limited, Isle of Man, who
are legal advisers to the Company and as such are entitled to charge for
professional advice and services. He has been in a managerial capacity with
Cains Advocates Limited/Equity Limited for over 18 years.





Tor Olav
Troim has been a Director of Golden State Petro (IOM I-B) PLC since November 1,
1998. Mr. Trøim graduated as M.Sc Naval Architect from the University of
Trondheim, Norway in 1985. His careers include Portfolio Manager Equity in
Storebrand ASA (1987 - 1990), and Chief Executive Officer for the Norwegian Oil
Company DNO AS (1992-1995). Since 1995 Mr. Trøim has been a Director of
SeaTankers Management in Cyprus.  In this capacity he has acted as
Chief Executive Officer for the public companies Frontline and Golar LNG Limited
(NASDAQ).  Mr. Trøim was also the Chief Executive Officer of Seadrill
Ltd. until the takeover and integration of Smedvig ASA.  In addition
Mr Trøim is a director of Ship Finance International Limited (NYSE) and a member
of the Boards in the public companies Golden Ocean Group Limited (OSE), Aktiv
Kapital ASA (OSE) and Marine Harvest Group (OSE).





B.  Compensation





During
2007, we made no compensation payments to our directors and
officers.





C.  Board
Practices





In
accordance with the by-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.





The
Officers of the Company are elected by the Board of Directors and shall hold
office for such period and on such terms as the Board may
determine.





There are
no service contracts between the Company and any of its Directors providing for
benefits upon termination of their employment or service.





23


D.  Employees





The
Company does not have any employees involved in the management of the
Vessel.





Under a
Management Agreement with the Company, Frontline provides administrative, ship
management and advisory services to the Company as Manager. Pursuant to the
Management Agreement, the Manager receives a Management Fee of $50,000 per
year.  All costs of maintaining the corporate status of the Company,
accounting and auditing fees and other related costs are payable by the Manager
from the Management Fee.  The Management Fee is payable semi-annually.
See Item 7B “Major Shareholders and Related Party Transactions—Related Party
Transactions” below





E.  Share
Ownership





The
directors have no interest in the share capital of the Company, nor do they have
any arrangements for involvement in our capital.





ITEM
7.                      MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





A.  Major
Shareholders





Except as
set forth below, the Registrant is not aware of any beneficial owner of more
than 5% of the Company’s Common Stock as of close of business on May 30,
2008.





Beneficial
Ownership


Class
      of
              Name
      and address of
              Number
      of
              PercentShares
              Beneficial Owners
              Shares
              of ClassCommon
      Shares
              Frontline
      Ltd1
              2
              100%


1
            The
      issued and outstanding shares of the Company are owned by
      GSH.  All of the issued and outstanding shares of GSH are owned
      by ITC.  All of the issued and outstanding shares of ITC are
      owned by ITCL, which is 82.47% owned by
  Frontline.







All
      of the Company’s issued and outstanding common shares have been pledged to
      the Indenture Trustee.





The
Company is not aware of any arrangements, the operation of which may at a
subsequent date result in a change in control of the Company.








B.  Related
Party Transactions





Pursuant
to the Management Agreement between the Company and Frontline, Frontline
provides administrative, management and advisory services to the Company at an
annual fee of $50,000, payable semi-annually.  All cost of
administering the Company are payable by Frontline from the Management
Fee.  The Management Agreement is effective until termination by
either party upon 30 days prior written notice.  Management fee
expenses and management fee payable for each of the years ended December 31,
2007, 2006, and 2005 were as follows:





(in
      thousands of $)
            
            2007
            
            
            2006
            
            
            2005Management
      fee expenses
            
            
            50
            
            
            
            50
            
            
            
            50Management
      fee payable
            
            
            21
            
            
            
            21
            
            
            
            21





24


C.  INTERESTS
OF EXPERTS AND COUNSEL





Not
Applicable





ITEM
8.                      
FINANCIAL INFORMATION





A.  Consolidated
Statements and other Financial Information





See Item
18 “Financial Statements” below.





Legal
Proceedings





To the
best of the Company’s knowledge, there are no legal or arbitration proceedings
existing or pending which have had or may have, significant effects on the
Company’s financial position or profitability and no such proceedings are
pending or known to be contemplated by governmental authorities.





Dividend
Policy





The
Company does not pay dividends.





B.  Significant
Changes





None





ITEM
9.                      THE
OFFER AND LISTING





Not
Applicable





ITEM
10.                    ADDITIONAL
INFORMATION





A.  Share
Capital





Not
Applicable





B.  Memorandum
and Articles of Association





Incorporated
by reference to “Description of Capital Stock” in the prospectus contained in
the Company’s Registration Statement on Form F-1, filed December 13, 1996 (File
No. 333-6170).





25


C.  Material
Contracts





The
Company has no material contracts apart from those pertaining to its normal
business.





D.  Exchange
Controls





The
Company was registered under the Isle of Man Income Tax (Exempt Companies) Act
1994 (the “Exempt Companies Act”) in May 1994. Interests in the Registered
Securities may be freely transferred among non-residents of the Isle of Man
under Isle of Man Law.  There are no Exchange Control regulations in
the Isle of Man.





There are
no restrictions upon the payment of foreign currency dividends interest or other
payments in respect of the Registered Securities.





None of
the Company’s Articles of Association, Memorandum of Association or any other
document, nor any Isle of Man law or, to the knowledge of the Company, any
foreign law, imposes limitations on the right of non-residents or foreign owners
to hold the Company’s share of common stock.





E.  Taxation





Isle
of Man





Under the
Income Tax (Exempt Companies) Act, the Company is exempt from any Isle of Man
income tax, or any other tax on income of distributions accruing to or derived
for the Company, or in connection with any transactions with the Company, or any
shareholders.





No
estate, inheritance, succession, or gift tax, rate, duty, levy or other charge
is payable in the Isle of Man with respect to any shares, debt obligations or
other securities of the Company.





There is
no reciprocal tax treaty between the Isle of Man and the United
States.





F.  Dividends
and Paying Agents





Not
Applicable





G.  Statement
by Experts





Not
Applicable





H.  Documents
on Display





The
Company is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. In accordance with these requirements we file reports
and other information with the Securities and Exchange Commission. These
materials, including this annual report and the accompanying exhibits may be
inspected and copied at the public reference facilities maintained by the
Commission at 100 F Street, NE, Room 1580, Washington D.C. 20549.  You
may obtain information on the operation of the public reference room by calling
1 (800) SEC-0330, and you may obtain copies at prescribed rates from the
Public Reference Section of the Commission at its principal office in
Washington, D.C. 20549.  The SEC maintains a website
(http://www.sec.gov.) that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
SEC.  In addition, documents referred to in this annual report may be
inspected at the office of the Manager at Par-la-Ville Place 4th Floor,
14 Par-la-Ville Road, Hamilton, Bermuda and at 15-19 Athol Street, Douglas, Isle
of Man.





I.  Subsidiary
Information





Not
Applicable


26





ITEM
11.                      QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





(a)   Quantitative
information about market risk




Quantitative
information about market risk instruments at December 31, 2007 is as
follows:
  i)      Serial Note




The last
principal repayment and final interest payment were paid on February 1,
2006.




ii)      Term Notes




The Term
Notes bear interest at a rate of 8.04% per annum, payable on February 1 and
August 1 of each year. The Term Notes will be subject to redemption through the
operation of a mandatory sinking fund on each payment date commencing August 1,
2007 up to and including August 1, 2018, according to the schedule of sinking
fund redemption payments set forth below.  The sinking fund redemption
price is 100% of the principal amount of Term Notes being redeemed, together
with accrued and unpaid interest to the date fixed for
redemption.  The Term Notes will mature, and the final payment of
principal and interest on the Term Notes will be due, on February 1,
2019.




The
following table provides the scheduled sinking fund redemption amounts and final
principal payment on the Term Notes.







Scheduled
      payment dateFebruary
      1, 2008
              
              1,430,000August
      1, 2008
              
              1,490,000February
      1, 2009
              
              1,550,000August
      1, 2009
              
              1,610,000February
      1, 2010
              
              1,675,000August
      1, 2010
              
              1,745,000February
      1, 2011
              
              1,815,000August
      1, 2011
              
              1,885,000February
      1, 2012
              
              1,960,000August
      1, 2012
              
              2,040,000February
      1, 2013
              
              2,125,000August
      1, 2013
              
              2,210,000February
      1, 2014
              
              2,295,000August
      1, 2014
              
              2,390,000February
      1, 2015
              
              2,485,000August
      1, 2015
              
              2,585,000February
      1, 2016
              
              2,690,000August
      1, 2016
              
              2,800,000February
      1, 2017
              
              2,910,000August
      1, 2017
              
              3,025,000February
      1, 2018
              
              3,150,000August
      1, 2018
              
              3,275,000February
      1, 2019
              
              14,410,000$
63,550,000
  27
  (b)     Qualitative
information about market risk





The
Company was organized solely for the purpose of acquiring and chartering the
Vessel using the proceeds of the Term Notes and the Serial Notes allocated to
the Company by GSPTC.





ITEM
12.                      DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES





Not
Applicable


28


PART
II





ITEM
13.                      DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES





None





ITEM
      14.
            MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
  USE


OF
      PROCEEDS





None





ITEM
15.                      CONTROLS
AND PROCEDURES





a) Disclosure
Controls and Procedures




Management
assessed the effectiveness of the design and operation of the Company’s
disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities
Exchange Act of 1934, as of the end of the period covered by this annual report
as of December 31, 2007. Based upon that evaluation, the Principal
Executive Officer and Principal Financial Officer concluded that the Company’s
disclosure controls and procedures are effective as of the evaluation
date.




b) Management’s
annual report on internal controls over financial reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) promulgated under
the Securities Exchange Act of 1934.




Internal
control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Securities Exchange Act of 1934 as a process designed by,
or under the supervision of, the Company’s principal executive and principal
financial officers and effected by the Company’s board of directors, management
and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:




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




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




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




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate.




Management
conducted the evaluation of the effectiveness of the internal controls over
financial reporting using the control criteria framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) published in its
report entitled Internal Control-Integrated Framework.




29


Our
management with the participation of our Principal Executive Officer and
Principal Financial Officer assessed the effectiveness of the design and
operation of the Company’s internal controls over financial reporting pursuant
to Rule 13a-15 of the Securities Exchange Act of 1934, as of December 31,
2007. Based upon that evaluation, the Principal Executive Officer and Principal
Financial Officer concluded that the Company’s internal controls over financial
reporting are effective as of December 31, 2007.




This
annual report does not include an attestation report of the Company’s current
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the Company’s
current registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.




c)  Changes in internal controls over financial
reporting




There were no
changes in our internal controls over financial reporting that occurred during
the period covered by this annual report that have materially effected or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.




ITEM
16.   
                  RESERVED





ITEM
16A.                   AUDIT
COMMITTEE FINANCIAL EXPERT





Our
equity is neither listed nor publicly traded.  The equity is held by
one beneficial holder.  Our obligations toward our bondholders are set
out in detail in covenants contained in the Indenture for their Notes.
Accordingly our Board of Directors has determined that the role played by an
audit committee would have no applicability to us and we do not have any Audit
Committee.  The functions of the Audit Committee are preformed by the
full Board of Directors.





ITEM
16B.                    CODE
OF ETHICS





Our
equity is neither listed nor publicly traded. The equity is held by one
beneficial holder. Our obligations toward our bondholders are set out in detail
in covenants contained in the Indenture for their Notes. Accordingly our Board
of Directors has determined that the role played by a code of ethics would have
no applicability to us and we have not adopted a Code of Ethics.





ITEM
16C.                    PRINCIPAL
ACCOUNTANT FEES AND SERVICES





Our
principal accountant for 2007 and 2006 was Grant Thornton LLP.  The
following table sets forth for the two most recent fiscal years the fees paid or
accrued for audit and services provided by Grant Thornton LLP.





(in
      thousands of $)
            
            2007
            
            
            2006Audit
      fees (a)
            
            
            12
            
            
            
            10Audit
      related fees (b)
            
            
            -
            
            
            
            -Tax
      fees (c)
            
            
            -
            
            
            
            -All
      other fees (d)
            
            
            -
            
            
            
            -Total
            
            
            12
            
            
            
            10





a)
            Audit
      Fees


Audit
fees represent professional services rendered for the audit of the Company’s
annual financial statements and services provided by the principal accountant in
connection with statutory and regulatory filings or engagements.





b)
            Audit
      Related Fees


Audit-related
fees consisted of assurance and related services rendered by the principal
accountant related to the performance of the audit or review of the Company’s
financial statements which have not been reported under Audit Fees
above.





c)
            Tax
      Fees


Tax fees
represent fees for professional services rendered by the principal accountant
for tax compliance, tax advice and tax planning.





30




d)
            All
      Other Fees




All other
fees include services other than audit fees, audit-related fees and tax fees set
forth above.





The
Company’s Board of Directors has assigned responsibility for the engagement of
the auditors to the Company’s manager.





ITEM
16D.              EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES





Not
Applicable





ITEM
      16E.
            PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND
  AFFILIATED


PURCHASERS





Not
Applicable








31


PART
III





ITEM
17.                      FINANCIAL
STATEMENTS





Not
Applicable





ITEM
18.                      FINANCIAL
STATEMENTS





The
following financial statements listed below and set forth on pages F-1 through
F-12 together with the report of Grant Thornton LLP thereon, are filed as part
of this annual report:







PageIndex
      to Financial Statements of Golden State Petro (IOM I-B)
PLC
              
              F-1Report
      of Independent Registered Public Accounting Firm
              
              F-2Statements
      of Operations and Retained Earnings forthe
      years ended December 31, 2007, 2006 and 2005
              
              F-3Balance
      Sheets at December 31, 2007 and 2006
              
              F-4Statements
      of Cash Flows for the years endedDecember
      31, 2006, 2006 and 2005
              
              F-5Notes
      to Financial Statements
              
              F-6
  ITEM
19.                      EXHIBITS





1.1*
            Memorandum
      and Articles of Association of Golden State Petro (IOM I-B) PLC,
      incorporated by reference to Exhibit 3.3 in the Registration Statement of
      Golden State Petroleum Transport Corp. and Golden State Petro (IOM I-A)
      PLC and Golden State Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4
      and Form F-4, Registration No.
333-26227.





2.1*
            Indenture,
      dated as of December 1, 1996, among Golden State Petroleum, the Owners and
      the Indenture Trustee, in respect of the 8.04% First Preferred Mortgage
      Notes due 2019, incorporated by reference to Exhibit 4.1 in the
      Registration Statement of Golden State Petroleum Transport Corp. and
      Golden State Petro (IOM I-A) PLC and Golden State Petro (IOM I-B) PLC
      filed April 30, 1997 on Form S-4 and Form F-4, Registration
      No. 333-26227.





2.2*
            Supplement
      No. 1, dated as of January 31, 1999 to the indenture, dated as of December
      1, 1996, among Golden State Petroleum Transport Corporation and Golden
      State Petro (IOM I-A) PLC and Golden State Petro (IOM I-B) PLC and
      United States Trust Company of New York, as indenture trustee,
      incorporated by reference to Exhibit 1 in the Annual Report of Golden
      State Petro (IOM I-B) PLC on Form 20-F for the fiscal year ended December
      31, 1999.





2.3*
            Issue
      of One Debenture, dated as of December 1, 1997, between Golden State Petro
      (IOM I-B) PLC and the Indenture Trustee, incorporated by reference to
      Exhibit 4.3 in the Registration Statement of Golden State Petroleum
      Transport Corp. and Golden State Petro (IOM I-A) PLC and Golden State
      Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4,
      Registration No. 333-26227.





2.4*
            Assignment
      of Charter, dated as of December 1, 1996, between Golden State Petro
      (IOM I-B) PLC and the Indenture Trustee, incorporated by reference to
      Exhibit 4.5 in the Registration Statement of Golden State Petroleum
      Transport Corp. and Golden State Petro (IOM I-A) PLC and Golden State
      Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4,
      Registration No. 333-26227.







32


2.5*
            Assignment
      of Shipbuilding Contract and Agreement on Contract for Technical Matters,
      dated as of December 1, 1996, among Golden State Petro (IOM I-B) PLC and
      the Indenture Trustee, incorporated by reference to Exhibit 4.7 in the
      Registration Statement of Golden State Petroleum Transport Corp. and
      Golden State Petro (IOM I-A) PLC and Golden State Petro (IOM I-B) PLC
      filed April 30, 1997 on Form S-4 and Form F-4, Registration No.
      333-26227.





2.6*
            Assignment
      of Building Contract Guarantee, dated as of December 1, 1996, between
      Golden State Petro (IOM I-B) PLC and the Initial Charterer, incorporated
      by reference to Exhibit 4.9 in the Registration Statement of Golden State
      Petroleum Transport Corp. and Golden State Petro (IOM I-A) PLC and Golden
      State Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4,
      Registration No. 333-26227.





2.7*
            Guarantee,
      made as of December 24, 1996, from Chevron to Golden State Petro (IOM I-B)
      PLC, incorporated by reference to Exhibit 4.11 in the Registration
      Statement of Golden State Petroleum Transport Corp. and Golden State Petro
      (IOM I-A) PLC and Golden State Petro (IOM I-B) PLC filed April 30, 1997 on
      Form S-4 and Form F-4, Registration No.
  333-26227.





2.8*
            Assignment
      of Management Agreement, dated as of December 1, 1996, between Golden
      State Petro (IOM I-B) PLC and the Indenture Trustee, incorporated by
      reference to Exhibit 4.13 in the Registration Statement of Golden State
      Petroleum Transport Corp. and Golden State Petro (IOM I-A) PLC and Golden
      State Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4,
      Registration No. 333-26227.





2.9*
            Building
      Contract Guarantee, dated as of December 26, 1996, from the Korean
      Development Bank to Golden State Petro (IOM I-B) PLC, incorporated by
      reference to Exhibit 4.16 in the Registration Statement of Golden State
      Petroleum Transport Corp. and Golden State Petro (IOM I-A) PLC and Golden
      State Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4,
      Registration No. 333-26227.





4.1*
            Shipbuilding
      Contract, made as of December 24, 1996, among Golden State Petro
      (IOM I-B) PLC and the Builders, incorporated by reference to Exhibit
      10.3 in the Registration Statement of Golden State Petroleum Transport
      Corp. and Golden State Petro (IOM I-A) PLC and Golden State Petro (IOM
      I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4, Registration No.
      333-26227.





4.2*
            Promissory
      Note from Golden State Petro (IOM I-B) PLC to Samsung Heavy Industries Co.
      Ltd., incorporated by reference to Exhibit 10.3 in the Registration
      Statement of Golden State Petroleum Transport Corp. and Golden State Petro
      (IOM I-A) PLC and Golden State Petro (IOM I-B) PLC filed April 30, 1997 on
      Form S-4 and Form F-4, Registration
  No. 333-26227.





4.3*
            Agreement
      on Contract for Technical Matters, made as of December 24, 1996, among
      Golden State Petro (IOM I-B) PLC, Samsung Heavy Industries Co., Ltd. and
      Chevron Shipping Company, as agent for the Initial Charterer, incorporated
      by reference to Exhibit 10.3 in the Registration Statement of Golden State
      Petroleum Transport Corp. and Golden State Petro (IOM I-A) PLC and Golden
      State Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4,
      Registration No. 333-26227.





4.4*
            Bareboat
      Charter, made as of December 24, 1996, between Golden State Petro (IOM
      I-B) PLC and the Initial Charterer, incorporated by reference to Exhibit
      10.8 in the Registration Statement of Golden State Petroleum Transport
      Corp. and Golden State Petro (IOM I-A) PLC and Golden State Petro (IOM
      I-B) PLC filed April 30, 1997 on Form S-4 and Form F-4, Registration No.
      333-26227.





33


4.5*
            Management
      Agreement, dated as of December 1, 1996, between Golden State Petro
      (IOM I-B) PLC and Cambridge Fund Management LLC, incorporated by
      reference to Exhibit 10.10 in the Registration Statement of Golden State
      Petroleum Transport Corp. and Golden State Petro (IOM I-A) PLC and
      Golden State Petro (IOM I-B) PLC filed April 30, 1997 on Form S-4 and
      Form F-4, Registration No.
333-26227.





12.1
            Certification
      of the Principal Executive Officer pursuant to Rule 13A-14(a) and Rule
      15d-14(a) of the Securities Act, as
amended.





12.2
            Certification
      of the Principal Financial Officer pursuant to Rule 13A-14(a) and Rule
      15d-14(a) of the Securities Act, as
amended.





13.1
            Certifications
      of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley act of
      2002.





13.2
            Certifications
      of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley act of
      2002.





*
Incorporated by reference to the filing indicated.


34





SIGNATURES





Subject
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





Golden
      State Petro (IOM I-B) PLC/s/  Kate
    BlankenshipKate
      BlankenshipDirector





Date:  June
30, 2008










35


Index
to Financial Statements of Golden State Petro (IOM I-B) PLC




PageIndex
      to Financial Statements of Golden State Petro (IOM I-B)
PLC
              
              F-1Report
      of Independent Registered Public Accounting Firm
              
              F-2Statements
      of Operations and Retained Earnings for the
      years ended December 31, 2007, 2006 and 2005
              
              F-3Balance
      Sheets at December 31, 2007 and 2006
              
              F-4Statements
      of Cash Flows for the years ended December
      31, 2006, 2006 and 2005
              
              F-5Notes
      to Financial Statements
              
              F-6
  F-1




Report
of Independent Registered Public Accounting Firm








To the
Board of Directors


Golden
State Petro (IOM I-B) plc








We have
audited the accompanying balance sheets of Golden State Petro (IOM I-B) PLC (a
company incorporated in the Isle of Man), a wholly-owned subsidiary of Golden
State Holdings I, Limited, as of December 31, 2007 and 2006, and the related
statements of operations and retained earnings, and cash flows for each of the three years in
the period ended December 31, 2007.  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 conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(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.The Company is not required to have,
nor were we engaged to perform an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, 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 financial statements referred to above present fairly, in all
material respects, the financial position of Golden State Petro (IOM-B)
PLC as of December 31, 2007 and 2006, and the results of its
operations and its cash flows for each of the three years in
the period ended December 31, 2007, in conformity with accounting
principles generally accepted in the United States of America.










/s/  Grant
Thornton LLP





Grant
Thornton LLP





New York,
New York





June 20,
2008





























F-2


Golden State
Petro (IOM-B) plc


Statements
of Operations and Retained Earnings for the years ended December 31, 2007, 2006
and 2005








(in
thousands of $)





2007
            
            
            2006
            
            
            2005Operating
      revenuesCharter
      revenues
            
            
            10,305
            
            
            
            9,928
            
            
            
            9,928Total
      operating revenues
            
            
            10,305
            
            
            
            9,928
            
            
            
            9,928Operating
      expensesAdministrative
      expenses
            
            
            56
            
            
            
            56
            
            
            
            56Depreciation
            
            
            3,217
            
            
            
            3,217
            
            
            
            3,217Total
      operating expenses
            
            
            3,273
            
            
            
            3,273
            
            
            
            3,273Net
      operating income
            
            
            7,032
            
            
            
            6,655
            
            
            
            6,655Other
      operating income / (expenses)Interest
      income
            
            
            648
            
            
            
            351
            
            
            
            325Interest
      expense
            
            
            (5,108
            )
            
            
            (5,135
            )
            
            
            (5,436
            )Amortization
      of deferred charges
            
            
            (40
            )
            
            
            (40
            )
            
            
            (40
            )Net
      other expenses
            
            
            (4,500
            )
            
            
            (4,824
            )
            
            
            (5,151
            )Net
      income
            
            
            2,532
            
            
            
            1,831
            
            
            
            1,504Retained
      earnings at the start of year
            
            
            4,839
            
            
            
            3,008
            
            
            
            1,504Retained
      earnings at the end of year
            
            
            7,371
            
            
            
            4,839
            
            
            
            3,008








See
accompanying notes that are an integral part of these financial
statements
























































F-3


Golden State
Petro (IOM-B) plc


Balance
Sheets as of December 31, 2007 and 2006








(in
thousands of $)





2007
            2006ASSETSCurrent
      assetsRestricted
      cash
            
            
            14,337
            9,370Total
      current assets
            
            
            14,337
            9,370Vessel,
      net
            
            
            58,302
            61,519Deferred
      charges
            
            
            438
            477Total
      assets
            
            
            73,077
            71,366LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilitiesCurrent
      portion of long-term debt
            
            
            2,920
            -Accrued
      expenses
            
            
            2,156
            2,977Total
      current liabilities
            
            
            5,076
            2,977Long-term
      debt
            
            
            60,630
            63,550Total
      liabilities
            
            
            65,706
            66,527Stockholder’s
      equityCommon
      stock: 2 shares of no par value
            
            
            -
            -Retained
      earnings
            
            
            7,371
            4,839Total
      stockholder’s equity
            
            
            7,371
            4,839Total
      liabilities and stockholder’s equity
            
            
            73,077
            71,366








See
accompanying notes that are an integral part of these financial
statements


F-4





Golden State
Petro (IOM-B) plc


Statements
of Cash Flows for the years ended December 31, 2007, 2006 and 2005








(in
thousands of $)





2007
            
            
            2006
            
            
            2005Net
      income
            
            
            2,532
            
            
            
            1,831
            
            
            
            1,504Adjustments
      to reconcile net income to net cash
              provided
      by operating activities:Depreciation
            
            
            3,217
            
            
            
            3,217
            
            
            
            3,217Amortization
      of deferred charges
            
            
            40
            
            
            
            40
            
            
            
            40Changes
      in operating assets and liabilities:Accrued
      expenses
            
            
            (822
            )
            
            
            701
            
            
            
            (127
            )Net
      cash provided by operating activities
            
            
            4,967
            
            
            
            5,789
            
            
            
            4,634Investing
      activitiesPlacement
      of restricted cash
            
            
            (4,967
            )
            
            
            (1,389
            )
            
            
            (184
            )Net
      cash used in investing activities
            
            
            (4,967
            )
            
            
            (1,389
            )
            
            
            (184
            )Financing
      activitiesRepayments
      of debt
            
            
            -
            
            
            
            (4,400
            )
            
            
            (4,450
            )Net
      cash used in financing activities
            
            
            -
            
            
            
            (4,400
            )
            
            
            (4,450
            )Net
      increase / (decrease) in cash and cash equivalents
            
            
            -
            
            
            
            -
            
            
            
            -Cash
      and cash equivalents at beginning of year
            
            
            -
            
            
            
            -
            
            
            
            -Cash
      and cash equivalents at end of year
            
            
            -
            
            
            
            -
            
            
            
            -Supplemental
      disclosure of cash flow information:Interest
      paid
            
            
            5,109
            
            
            
            5,260
            
            
            
            5,562








See
accompanying notes that are an integral part of these financial
statements


F-5
 Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements





1.
            DESCRIPTION
      OF BUSINESS





Golden
State Petro (IOM I-B) PLC (the “Company”) was incorporated in the Isle of Man on
November 4, 1996 along with Golden State Petro (IOM I-A) PLC (“IOM I-A”). These
entities (each an “Owner” and together the “Owners”) were formed for the purpose
of each acquiring and chartering a very large crude oil carrier
(“VLCC”).





Golden
State Petroleum Transport Corporation (“GSPTC”), a Delaware corporation acting
as an agent for the Owners, issued 8.04% First Preferred Mortgage Term Notes for
$127,100,000 (the “Term Notes”) and Serial First Preferred Mortgage Notes for
$51,700,000 (the “Serial Notes”) (together the “Notes”) as an agent for the
Owners.  The principal amount of the Term Notes and the Serial Notes
allocated to the Company was $63,550,000 and $26,800,000
respectively.  The proceeds allocated to the Company have been used to
fund the construction of a VLCC.  The Phoenix Voyager (the
“Vessel”), was delivered to the Company on March 15, 1999 and was concurrently
chartered to Chevron Transport Corporation (“Chevron”) pursuant to an initial
charter (the “Initial Charter”) for a term of eighteen years.  Chevron
had an option to terminate the Initial Charter on March 15, 2007 and had an
option to terminate on March 15, 2009 and has termination options on each of the
three subsequent two-year anniversaries thereof. Chevron has not exercised the
first or second termination options. Notice for termination of the Initial
Charter must be given by Chevron on or before June 15, 2008. As of June 15, 2008
such notice had not been received. Chevron’s obligations under the Initial
Charter are guaranteed by Chevron Corporation.





The
Company, IOM I-A, and GSPTC are wholly-owned subsidiaries of Golden State
Holdings I, Limited, an Isle of Man holding company.  Golden State
Holdings I, Limited is wholly-owned by Independent Tankers Corporation, a Cayman
Islands company (“ITC”), which itself is wholly owned by Independent Tankers
Corporation Limited, a Bermuda company (“ITCL”), which is 82.47% owned by
Frontline Ltd (“Frontline”), a publicly listed Bermuda company.





2.
            ACCOUNTING
      POLICIES





Basis
of Presentation


The
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America. 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.





Restricted
Cash


Restricted
cash consists of deposits which must be maintained in accordance with
contractual arrangements and which may only be used to pay principal and
interest on the Company’s debt and management fees.





Vessel


The cost
of the Vessel, including capitalized costs and interest, less estimated residual
value is being depreciated on a straight line basis over the Vessel’s remaining
life.  The estimated economic useful life of the Vessel is 25
years.




Impairment
of Long-lived Assets


The
carrying value of long-lived assets that are held and used by the Company are
reviewed whenever events or changes in circumstances indicate that the carrying
amount of an asset may no longer be appropriate. We assess recoverability of the
carrying value of the asset by estimating the future net cash flows expected to
result from the asset, including eventual disposition. If the future net cash
flows are less than the carrying value of the asset, an impairment loss is
recorded equal to the difference between the asset’s carrying value and fair
value.  In addition, long-lived assets to be disposed of are reported at
the lower of carrying amount and fair value less estimated costs to
sell.







F-6


Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements






Deferred
Charges


Loan costs, including debt
arrangement fees, are capitalized and amortized over the weighted average life
of the Serial and Term Notes respectively, using the effective interest
method in the Company’s statements of operations. If a loan is repaid early, any
unamortized portion of the related deferred charges is charged against income in
the period in which the loan is repaid.





Allocation
of Mortgage Notes


The
Company is jointly and severally liable under the Notes with IOM I-A for the
issued amount of $178,800,000.  At December 31, 2007 the amount
outstanding on the Notes was $125,760,000.  In preparing the separate
company financial statements of the Company and IOM I-A, the aggregate amount of
the Notes has been allocated so as to reflect the difference in the contracted
cost of the vessels.





Revenue
and expense recognition


Revenues
and expenses are recognized on the accrual basis. Revenue is substantially
generated from bareboat charter hires and is recorded over the term of the
charter as service is provided. Interest payable on the Term Notes is accrued on
a daily basis.





Financial
Instruments


In
determining the fair value of its financial instruments, the Company uses a
variety of methods and assumptions that are based on market conditions and risks
existing at each balance sheet date. For the majority of financial instruments,
including long-term debt, standard market conventions and techniques are used to
determine fair value. All methods of assessing fair value result in a general
approximation of value, and such value may never actually be
realized.





3.
            RECENTLY
      ISSUED ACCOUNTING STANDARDS





In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157 Fair Value Management (“FAS 157”). FAS 157 defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosures about fair value measurements. FAS 157 applies under
most other accounting pronouncements that require or permit fair value
measurements and does not require any new fair value measurements. FAS 157 is
effective for fiscal years beginning after November 15, 2007. The Company does
not expect the adoption of SFAS 157 to have an impact on its financial
statements.





In
February 2007 the FASB issued SFAS No. 159 “The Fair Value Option for Financial
Assets and Financial
Liabilities – including an amendment of FASB  Statement No.
115” (SFAS 159). SFAS 159 permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. SFAS is effective for fiscal years beginning after November 15 2007.
The Company does not expect the adoption of SFAS 159 to have an impact on its
financial statements.





In
December 2007 the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial
Statements – an amendment of ARB No.51” (SFAS 160). SFAS 160 is intended
to improve the relevance, comparability and transparency of financial
information that a reporting entity provides in its consolidated financial
statements with reference to a noncontrolling interest in a subsidiary. Such a
noncontrolling interest, sometimes called a minority interest, is the portion of
equity in a subsidiary not attributable, directly or indirectly, to the parent
entity. SFAS 160 is effective for fiscal years beginning on or after December 15
2008. The Company does not expect the adoption of SFAS 160 to have an impact on
its financial statements.





F-7


Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements




In
November 2007 the SEC issued Staff Accounting Bulletin No. 109 (SAB 109),
relating to written loan commitments recorded at fair value through earnings.
Previously Staff Accounting Bulletin No. 105 “Application of Accounting Principles
to Loan Commitments”(SAB 105) provided the views of the staff regarding
derivative loan commitments that are accounted for at fair value through
earnings pursuant to Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging
Activities”. SAB
105 stated that in measuring the fair value of a derivative loan commitment, the
staff believed it would be inappropriate to incorporate the expected net future
cash flows related to the associated servicing of the loan. This new SAB 109
supersedes SAB 105 and expresses the current view of the staff that, consistent
with the guidance in Statement of Financial Accounting Standards No. 156 “Accounting for Servicing of
Financial Assets” and Statement of Financial Accounting Standards No. 159
“The Fair Value Option for
Financial Assets and Financial Liabilities”, the expected net future cash
flows related to the associated servicing of the loan should be included in the
measurement of all written loan commitments that are accounted for at fair value
through earnings. SAB 105 also indicated that the staff believed that
internally-developed intangible assets (such as customer relationship intangible
assets) should not be recorded as part of the fair value of a derivative loan
commitment. SAB 109 retains that staff view and broadens its application to all
written loan commitments that are accounted for at fair value through earnings.
The Company adopted the provisions of SAB 109 as of December 31 2007. The
adoption did not have any effect on the Company’s results of operations or
financial position.





4.
            TAXATION





The
Company is exempt from United States Federal, state and local income taxes on
its international shipping income and has been granted exemptions from the
statutory 10% tax on profits required to be assessed against Isle of Man
companies.





Certain
entities are exempt from US corporate income tax on US source income from their
international shipping operations if (i) their countries of incorporation exempt
shipping operations of US persons from income tax (the “Incorporation Test”) and
(ii) they meet the “Ultimate Owner Test”.  A company meets the
Ultimate Owner Test if more than 50% of the value of its stock is owned directly
or indirectly pursuant to specified constructive stock ownership rules by
individuals who are residents of a foreign country that exempts US persons from
tax on shipping earnings.  The Company meets the Incorporation Test
because the Company is incorporated in the Isle of Man, which provides the
required exemption to US persons involved in shipping operations pursuant to an
exchange of diplomatic notes with the United States, and the Company believes
more than 50% of the value of its outstanding stock is indirectly owned by
individuals who are residents of countries which provide the required exemption
to US persons involved in shipping operations.  The issue of residence
is, however, inherently factual and cannot be determined with
certainty.





Based on
the foregoing, the Company expects all of its income to remain exempt from
United States Federal, state and local income taxes. Accordingly, no provision
for taxes has been made in these financial statements.





5.
            RESTRICTED
      CASH





Restricted
cash consists of restricted investments accounts (the “Accounts”) that were
established in the name and under the control of the United States Trust Company
as the Indenture Trustee (the “Trustee”).  The proceeds of the Notes
issued on behalf of the Company were deposited into one of the Accounts (the
“Pre-Funding Account”) in the form of a guaranteed investment
contract.  The funds in the Pre-Funding were only to be used to fund
the installment construction payments, principal and interest due on the Notes
and management fees prior to the delivery of the Vessel.  Charterhire
payments are being deposited into a separate account (the “Revenue Account”) in
the form of a guaranteed investment contract.  The funds in the
Revenue Account can be used only to fund the principal and interest due on the
Notes and management fees subsequent to the delivery of the Vessel.





F-8


Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements






6.
            LEASES





As of
December 31, 2007, the Company leased its vessel on a bareboat charter to
Chevron for a term of eighteen years.  Chevron had an option to
terminate the Initial Charter on March 15, 2007 and has termination options on
each of the four subsequent two-year anniversaries thereof.  Chevron
has not exercised the first termination option.  For each of the
remaining optional termination dates Chevron must give the Company (i)
non-binding notice of its intent to exercise the option nine months prior to the
optional termination date and (ii) irrevocable notice of such exercise six
months prior to the optional termination date. As of June 15, 2008, no such
notice had been given by Chevron.





The
minimum future revenues to be received on the bareboat charter which has been
accounted for as an operating lease as of December 31, 2007 are as
follows:





Year
      ending December 31,(in
      thousands of $)2008
            
            
            10,4032009
            
            
            10,4032010
            
            
            10,4032011
            
            
            2,1092012
            
            
            -2013
      and later
            
            
            -Total
      minimum lease payments
            
            
            33,318





Cost and
accumulated depreciation on the Vessel leased to third parties at December 31,
2007 were $86.7 million and $28.4 million respectively.





7.
            VESSEL





(in
      thousands of $)
            
            2007
            
            
            2006Cost
            
            
            86,716
            
            
            
            86,716Accumulated
      depreciation
            
            
            (28,414
            )
            
            
            (25,197
            )Net
      book value at end of year
            
            
            58,302
            
            
            
            61,519





Depreciation
expense was $3.2 million for each of the years ended December 31, 2007, 2006 and
2005 respectively.





8.
            DEFERRED
      CHARGES





Deferred
charges are comprised of expenses incurred in connection with the structuring of
the transaction and the issuance of the Notes. Such expenses are being amortized
over the life of the debt using the effective interest method. The deferred
charges are comprised of the following amounts:




(in
      thousands of $)
            
            2007
            
            
            2006Debt
      arrangement fees
            
            
            876
            
            
            
            1,233Accumulated
      amortization
            
            
            (438
            )
            
            
            (756
            )438
            
            
            
            477






F-9


Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements


9.
            DEBT





The
Serial Notes were issued in the aggregate principal amount of $51,700,000, of
which $26,800,000 was allocated to the Company.  The Serial Notes were
fully repaid in February 2006.  The Term Notes were issued in the
aggregate principal amount of $127,100,000, of which $63,550,000 was allocated
to the Company. Interest on the Notes is payable semi-annually on each February
1 and August 1.





(in
      thousands of $)
            
            2007
            
            
            2006Term
      notes (8.04%) due February 1, 2019
            
            
            63,550
            
            
            
            63,550Total
      mortgage notes
            
            
            63,550
            
            
            
            63,550Less:
      short-term portion
            
            
            (2,920
            )
            
            
            -60,630
            
            
            
            63,550





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





Year
      ending December 31,(in
      thousands of $)2008
            2,9202009
            3,1602010
            3,4202011
            3,7002012
            4,0002013
      and later
            46,350Total
      debt
            63,550





As of
December 31, 2007, the effective interest rate for the Term Notes was
8.04%.





The Term
Notes are subject to redemption by the Company through the operation of a
mandatory sinking fund on each payment date commencing February 1, 2008 up
to and including February 1, 2019, according to the schedule of sinking
fund redemption payments set forth below. The sinking fund redemption price is
100% of the principal amount of Term Notes being redeemed, together with accrued
and unpaid interest to the date fixed for redemption.  The Term Notes
will mature, and the final payment of principal and interest on the Term Notes
will be due, on February 1, 2019.  The amortization schedule will
approximate the level of debt service through to the maturity date with an
additional principal payment on the maturity date of $10,995,000.





The
following table provides the scheduled sinking fund redemption amounts and final
principal payment on the Term Notes.








F-10
 Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements


Scheduled
      Payment Date
              (in
      thousands of $)
            
            AmountFebruary
      1, 2008
            
            
            1,430August
      1, 2008
            
            
            1,490February
      1, 2009
            
            
            1,550August
      1, 2009
            
            
            1,610February
      1, 2010
            
            
            1,675August
      1, 2010
            
            
            1,745February
      1, 2011
            
            
            1,815August
      1, 2011
            
            
            1,885February
      1, 2012
            
            
            1,960August
      1, 2012
            
            
            2,040February
      1, 2013
            
            
            2,125August
      1, 2013
            
            
            2,210February
      1, 2014
            
            
            2,295August
      1, 2014
            
            
            2,390February
      1, 2015
            
            
            2,485August
      1, 2015
            
            
            2,585February
      1, 2016
            
            
            2,690August
      1, 2016
            
            
            2,800February
      1, 2017
            
            
            2,910August
      1, 2017
            
            
            3,025February
      1, 2018
            
            
            3,150August
      1, 2018
            
            
            3,275February
      1, 2019
            
            
            14,41063,550





The Notes
have priority of payment as described in the Indenture Agreement and are
collateralized by a statutory first mortgage on the Vessel and assignment to the
Trustee of the Initial Charter, the Chevron Corporation guarantee and certain
other collateral.





The Notes
will be subject to mandatory redemption on a pro rata basis in an aggregate
principal amount equal to the allocated principal amount of the Notes if the
Vessel is a total loss, at a redemption price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest (including default interest) to
the date fixed for redemption.





If
Chevron exercises any of its termination options as defined in the Initial
Charter, and the Company does not enter into an acceptable replacement charter
for the Vessel on or before the date which is one week prior to the next sinking
fund payment date for the Term Notes following the effective date of such
termination and the Vessel is sold, with the consent of all the holders of the
Term Notes, then the outstanding Term Notes will be redeemed in part, from the
net proceeds of the sale of the Vessel and the allocable portion of the
Restricted Investments account, in an aggregate redemption price equal to the
sum of such net proceeds and the allocable portion of the debt service reserve
fund.  The debt service reserve fund, together with the interest
earned thereon, provides for the payment of the average annual sinking fund
payment and interest on the Term Notes.  If all the holders of the
Term Notes do not consent to such a sale, Frontline as Manager, will attempt to
re-charter the Vessel.





F-11


Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements




The Term
Notes may be redeemed in whole or in part at the discretion of the Company on
any payment date on or after August 1, 1999 at a redemption price equal to 100%
of the principal amount thereof plus accrued and unpaid interest to the date
fixed for redemption, provided that if (i) such redemption occurs prior to
February 1, 2018 and (ii) a Vessel is then subject to the related Initial
Charter or to an acceptable replacement charter pursuant to which the
charterer  is required to pay charter hire equal to or greater than
the charter hire payable by Chevron during the fixed period, then the make-whole
premium, as defined in the Offering Memorandum, shall be payable with respect to
Mortgage Notes in an amount equal to allocated principal amount of the Mortgage
Notes for such Vessel.  In addition, Term Notes may be redeemed in
part in an aggregate principal amount equal to the allocated principal amount of
the Notes for the Vessel if the Initial Charter for the Vessel is terminated and
an acceptable replacement charter is not entered into, at a redemption price
equal to 100% of the principal amount thereof plus accrued interest to the date
fixed for redemption.





The
Indenture governing the Notes includes certain covenants that, among other
things, prohibit the Company and GSPTC from incurring additional indebtedness
(other than subordinated loans) and impose limitations on the amount of
investments, on loans, advances, mergers, the payment of dividends and the
making of certain other payments, the creation of liens and certain transactions
with affiliates.





10.
            SHARE
      CAPITAL





Authorized
share capital:





(in
      $)
            
            2007
            
            
            20062,000
      common stock of no par value
            
            
            2,000
            
            
            
            2,000





Issued
and outstanding share capital:





(in
      $)
            
            2007
            
            
            20062
      common stock of no par value
            
            
            2
            
            
            
            2





All
      of the Company’s issued and outstanding common shares have been pledged to
      the Indenture Trustee.





11.
            FINANCIAL
      INSTRUMENTS





Fair
Values





The
carrying value and estimate fair value of the Company’s financial instruments at
December 31, 2007 and 2006 are as follows:





2007
            
            
            2007
            
            
            2006
            
            
            2006(in
      thousands of $)
            
            Carrying
      Value
            
            
            Fair
      Value
            
            
            Carrying
      Value
            
            
            Fair
      ValueRestricted
      cash
            
            
            14,337
            
            
            
            14,337
            
            
            
            9,370
            
            
            
            9,370Term
      Notes
            
            
            63,550
            
            
            
            69,702
            
            
            
            63,550
            
            
            
            66,966





The
methods and assumptions used in estimating the fair values of financial
instruments are as follows:





The
restricted cash balance represents investments in guaranteed investment
contracts that are readily convertible into cash.  The guaranteed
investment contracts are considered to be investments held to maturity and as
such are stated at cost plus accrued interest, which approximates fair value.
These contracts are with Pacific Mutual Life Insurance, a California life
insurance company, and are held in the name of the United States Trust Company
on behalf of the Company as the Indenture Trustee.





The
estimated fair value of the Term Notes is based on the quoted market price of
these or similar notes when available.





F-12


Golden
  State Petro (IOM-B) plc
 Notes
to the Financial Statements








Concentrations
of risk


The
Company has no sources for the payment of the principal of, and the interest on,
the Notes except for the Restricted Cash accounts held by the
Trustee.  Accordingly, the Company’s ability to pay debt service on
the Notes is wholly dependent upon its financial condition, results of operation
and cash flows from the Vessel’s operation.





There is
a concentration of credit risk with respect to Restricted Cash to the extent
that all of the amounts are invested with Pacific Mutual Life
Insurance.





There is
a concentration of credit risk due to the fact that the sole source of charter
income is Chevron Transport Corporation.  The Company does not
consider this is a significant risk.





12.
            ASSETS
      PLEDGED





Assets
pledged





(in
      thousands of $)
            
            2007
            
            
            2006Vessel
            
            
            58,302
            
            
            
            61,519Restricted
      bank deposits
            
            
            14,337
            
            
            
            9,37072,639
            
            
            
            70,889








13.
            RELATED
      PARTY TRANSACTIONS





In the years ended December 31, 2007,
2006 and 2005, Frontline has provided management services to the Company
pursuant to a management agreement which is effective until termination by
either party upon 30 days prior written notice.Management fee expenses
and management fee payable as of December 31, 2007, 2006, and 2005 are as
follows:





(in
      thousands of $)
            
            2007
            
            
            2006
            
            
            2005Management
      fee expense
            
            
            50
            
            
            
            50
            
            
            
            50Management
      fee payable
            
            
            21
            
            
            
            21
            
            
            
            21











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