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

                            FORM 20-F
(Mark One)
[   ]    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g)
             OF THE SECURITIES EXCHANGE ACT OF 1934

                               OR

[ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
           For the fiscal year ended December 31, 1998

                               OR

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

                 Commission file number 0-29106


                  KNIGHTSBRIDGE TANKERS LIMITED

     (Exact name of Registrant as specified in its charter)

                       ISLANDS OF BERMUDA

         (Jurisdiction of incorporation or organization)

                           Cedar House
                         41 Cedar Avenue
                         Hamilton HM EX 
                             Bermuda

            (Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act:  None

Securities registered or to be registered pursuant to Section
12(g) of the Act:     

                       Title of each class

                          Common Shares
                        (par value $0.01) 




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Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act:     None

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.

Common Shares, par value $0.01         17,100,000

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

                     Yes   X       No       

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

                Item 17             Item 18   X  































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                      TABLE OF CONTENTS (1)

                                                             Page

Part I   Item 1    Description of Business................... 4

         Item 2    Description of Property...................23

         Item 3    Legal Proceedings.........................23

         Item 4    Control of Registrant.....................23

         Item 5    Nature of Trading Market..................23
    
         Item 6    Exchange Controls and Other Limitations 
                        Affecting Security Holders...........24

         Item 7    Taxation..................................25

         Item 8    Selected Financial Data...................26

         Item 9    Management's Discussion and Analysis of
                        Financial Condition and Results of
                        Operations...........................30

         Item 10   Directors and Officers of Registrant......35

         Item 11   Compensation of Directors and Officers....40

         Item 13   Interest of Management in Certain
                        Transactions.........................40

Part IV  Item 18   Financial Statements......................40

         Item 19   Financial Statements and Exhibits.........40




___________________
(1) Items omitted are inapplicable.












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                             PART I

ITEM 1 - DESCRIPTION OF BUSINESS

General

    Knightsbridge Tankers Limited (the "Company") was
incorporated in Bermuda in September, 1996, for the purpose of
the acquisition, disposition, ownership, leasing and chartering
of, through wholly-owned subsidiaries (the "Subsidiaries"), five
very large crude oil carriers ("VLCCs") (the "Vessels"), and
certain related activities. The Company charters the Vessels to
Shell International Petroleum Company Limited (the "Charterer")
on long-term "hell and high water" bareboat charters (the
"Charters"). The obligations of the Charterer under these
charters are jointly and severally guaranteed (the "Charter
Guarantees") by Shell Petroleum N.V. and The Shell Petroleum
Company Limited (the "Charter Guarantors"). The Charterer and the
Charter Guarantors are all companies of the Royal Dutch/Shell
Group of Companies. References herein to the Company include the
Company and the Subsidiaries, unless otherwise indicated.

Ownership and Management of the Company Generally

    In February, 1997, upon the exercise by the underwriters of
their overallotment option, the Company offered and sold to the
public 16,100,000 common shares, par value $0.01 per share (the
"Common Shares"), at an initial offering price of $20 per share.
Simultaneously, the Company sold 1,000,000 Common Shares at a
price of $20 per share to ICB International Limited ("ICB
International"), an indirect wholly-owned subsidiary of ICB
Shipping Aktiebolag (publ) ("ICB"), a Swedish publicly traded oil
tanker owning and operating company. As of December 31, 1998, ICB
International owns approximately 4.7 % of the outstanding Common
Shares. ICB Shipping (Bermuda) Limited (the "Manager"), another
wholly-owned subsidiary of ICB, manages the business of the
Company. See Item 10.

Vessels

    The Company used the net proceeds of the offerings described
above, together with advances totaling $145.6 million under a
credit facility from an international syndicate of lenders (the
"Credit Facility"), primarily to fund the purchase by the
Subsidiaries of the Vessels. Upon their purchase from their
previous owners on February 27, 1997 (the "Delivery Date"), the
Vessels were delivered by the Company to the Charterer under the
Charters. The term of each of the Charters is a minimum of seven
years, with an option for the Charterer to extend the period for
each Vessel's Charter for an additional seven-year term, to a
maximum of 14 years per Charter. Under the Charters, the


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Charterer pays the greater of a base rate of hire or a spot
market related rate. See "Charterhire" below.

    Each Vessel is an approximately 298,000 deadweight tonne
("dwt") double hull VLCC built by Daewoo Heavy Industries, Ltd.
(the "Builder") at its shipyard in Korea. The Vessels meet all
material existing regulatory requirements affecting the Vessels
and their operations. The name, dwt, hull type and date of
original delivery from the Builder's yard are set forth below,
together with certain of the Vessels' particulars:

                                           Date of Delivery from
  Vessel Name  Approximate Dwt  Hull Type      Builder's Yard   

  Murex          298,000          Double      June 2, 1995
  Macoma         298,000          Double      August 1, 1995
  Magdala        298,000          Double      September 28, 1995
  Myrina         298,000          Double      November 15, 1995
  Megara         298,000          Double      March 5, 1996

                       Vessel Particulars

    Length Overall...............      332.0 meters
    Beam Overall.................       58.0 meters
    Depth........................       31.0 meters
    Draught......................       22.0 meters
    Cargo Cubic..................    343,000 cubic meters
    Main Engine Sulzer 7RTA84T (Diesel) rated at 36,000 hp.

    The Vessels are modern, high-quality double hull tankers
designed for enhanced safety and reliability and for relatively
low operating and maintenance costs. Design features include a
cargo system designed for optimum port performance, a high grade
anti-corrosion paint system and pipeline materials which have
been specified with a view to long service, an efficient power
generation system including shaft generator, additional
firefighting and safety equipment over and above minimum
standards and improved structural design.

    The Vessels are all registered in the Isle of Man.

The U.K. Finance Leases

    The Subsidiaries have each entered into conditional
sale/leaseback arrangements the ("U.K. Finance Leases") with a
subsidiary of National Westminster Bank plc, NatWest Leasing and
Asset Finance Ltd. (the "U.K. Lessor") pursuant to which each
Subsidiary has sold a Vessel to the U.K. Lessor under a
conditional sale agreement (the "CSA") and concurrently leased
its Vessel back from the U.K. Lessor for a term of 25 years. By
virtue of certain benefits under United Kingdom tax laws which


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will be passed to the Charterer, the U.K. Finance Leases enable
the Charterer to achieve a reduction in its costs of hiring and
using the Vessels, without reducing the Base Hire, Additional
Hire, if any, or Supplemental Hire (as these terms are defined
herein) payable to the Subsidiaries. During the term of the U.K.
Finance Leases, the Vessels will remain on the Company's
consolidated balance sheet and each Subsidiary will retain title
to the related Vessel.

    On the Delivery Date, the U.K. Lessor paid to the
Subsidiaries an amount equal to $439.8 million in the aggregate
and each Subsidiary delivered its related Vessel to the Charterer
as agent for the U.K. Lessor. Each Subsidiary procured the
opening of a letter of credit (each a "Letter of Credit" and,
collectively, the "Letters of Credit") by a major commercial bank
(each a "LC Bank" and, collectively, the "LC Banks") from which
the U.K. Lessor will be paid rental and other payments due under
the U.K. Finance Leases. The Subsidiaries also established letter
of credit reimbursement accounts (each a "LC Account" and,
collectively, the "LC Accounts") with the LC Banks, as security
for their respective obligations to reimburse the LC Banks for
amounts paid under the Letters of Credit. Interest on the LC
Accounts will be added to such security, and, therefore, will not
benefit the Company.

    The U.K. Lessor, the Charterer and each Subsidiary have
entered into a direct support agreement (each a "Direct Support
Agreement" and, collectively, the "Direct Support Agreements")
containing certain indemnification and other payment obligations
of the Charterer in favor of the U.K. Lessor. The U.K. Finance
Leases are structured so that the LC Banks may not make claims
for reimbursement against the Subsidiaries or the Vessels for
amounts paid or capable of being drawn under the Letters of
Credit, other than claims in respect of funds on deposit in the
LC Accounts (including interest thereon), except in the event
that such funds are returned to the Subsidiaries or paid to a
creditor or a trustee or similar official and then only to the
extent of such returned or paid funds. In addition, the U.K.
Lessor may not make claims against the Subsidiaries or the
Vessels for amounts otherwise due under the U.K. Finance Leases
and capable of being drawn under the Letters of Credit, except to
the extent that the Charterer has paid to a Subsidiary under the
Charters separate amounts denominated in Pounds Sterling
("Sterling Hire") for the sole purpose of enabling the
Subsidiaries to meet their obligations to the U.K. Lessor.

    The U.K. Lessor, the Charterer and each Subsidiary (with the
consent of the Charterer) may not terminate the U.K. Finance
Leases apart from under certain conditions and upon such
termination a termination sum (the "Termination Sum") will be
payable to the U.K. Lessor. One of those conditions includes the


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termination of the Charter and the failure to substitute an
acceptable replacement charter. The recourse of the U.K. Lessor
against the Subsidiaries or the Vessels for all or any portion of
the Termination Sum will be limited to amounts capable of being
drawn under the Letters of Credit and to any amounts paid in
respect thereof by the Charterer to the Subsidiaries as Sterling
Hire. To the extent the Termination Sum exceeds the amount
capable of being drawn under the Letters of Credit, the Charterer
will be obligated to pay the U.K. Lessor the difference. Also,
upon termination, the U.K. Lessor will agree to sell its interest
in the related Vessel and to allow the relevant Subsidiary to
control the disposition of such interest in the related Vessel
and to receive the net proceeds of any sale thereof except in
limited circumstances. However, the Subsidiaries' rights will be
subject to the rights of the agent on behalf of the lenders under
the Credit Facility, as described below, who will be entitled to
control such disposition in certain circumstances.

The Credit Facility

    The Company has entered into the Credit Facility with a
syndicate of international lenders, pursuant to which the Company
on the Delivery Date borrowed $145.6 million in the form of term
loans. Of such amount, $125.4 million was in respect of five
loans (the "Primary Loans"), each in respect of a Vessel, and
$20.2 million was in respect of five loans (the "Amortizing
Loans"), each in respect of a Vessel. The Primary and Amortizing
Loans are equal to approximately 31.65% of the purchase price of
the Vessels, which was $439,821,545 million in the aggregate.
Each Primary Loan will mature on August 27, 2004. Principal on
the Amortizing Loans is amortized in equal quarterly installments
beginning on April 15, 1997 through January 15, 2000. Whether or
not the term of any of the Charters is extended, the Company is
obligated to repay the borrowings under the Credit Facility on
the maturity date. The Credit Facility provides for payment of
interest on the outstanding principal balance of each of the
Primary Loans and on the Amortizing Loans quarterly, in arrears,
at a floating interest rate based on the rate in the London
interbank eurocurrency market. However, the Company has entered
into an interest rate swap transaction (the "Swap") with Goldman
Sachs Capital Markets, L.P., an affiliate of Goldman, Sachs & Co.
(the "Swap Counterparty"), so that it has effectively fixed its
interest rate on the Primary Loans and the Amortizing Loans at
the rate of approximately 7.14% and 6.51%, respectively, per
annum.

    If a Subsidiary sells or disposes of the related Vessel or
the Company sells or disposes of its shareholding in such
Subsidiary, or the U.K. Lessor sells or otherwise disposes of its
interest in a Vessel and rebates the proceeds thereof to the
Subsidiary the Company will be obligated to make a loan


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prepayment in respect of the Credit Facility which will be
applied against the Primary Loans and Amortizing Loans in a
manner depending upon whether the disposal occurred prior to, or
on or after February, 2004.

    The Credit Facility is secured by, among other things, a
pledge by the Company of 100% of the issued and outstanding
capital stock of the Subsidiaries, a guarantee from each
Subsidiary, a mortgage on each Vessel (collectively, the
"Mortgages"), assignments of the Charters and the Charter
Guaranties and an assignment of the U.K. Lessor's rights to take
title to the Vessels and the proceeds from the sale or any
novation thereof. The Credit Facility is not guaranteed by the
Charterer or the Charter Guarantors. The failure by the Company
to make payments due and payable under the Credit Facility could
result in the acceleration of all principal and interest on the
Credit Facility, the enforcement by the lenders under the Credit
Facility of their rights with respect to the security therefor,
and the consequent forfeiture by the Company of one or more of
the Vessels. The Credit Facility and the Swap also provide for
other customary events of default.

    The Credit Facility contains a number of covenants made by
the Company and each of the Subsidiaries that, among other
things, restrict the ability of the Company to incur additional
indebtedness, pay dividends if the Company is in default, change
the business conducted by the Company, create liens on assets or
dispose of assets. In addition, upon termination of a Charter,
the Company and the relevant Subsidiary will be subject to
additional covenants pursuant to the Credit Facility pertaining
primarily to the maintenance and operation of the Vessels.

The Charterer and Charters

    The Charterer is Shell International Petroleum Company
Limited, a wholly-owned subsidiary of The Shell Petroleum Company
Limited, which, in turn, is a subsidiary of N.V. Koninklijke
Nederlandsche Petroleum Maatschappij, which owns 60% of its share
capital, the remaining 40% being owned by The "Shell" Transport
and Trading Company, p.l.c.

    The principal activities of the Charterer are to buy, sell
and otherwise deal in, and to transport, crude oil, petroleum
products and coal and to provide services to the companies of the
Royal Dutch/Shell Group of Companies. The Charterer currently
charters the Vessels from the Subsidiaries under the Existing
Charters.

    Pursuant to the Charters, each Vessel is chartered for an
initial term of seven years (ending in February, 2004) plus,
subject to the notice requirement described below, at the option


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of the Charterer, if not extended as described below, up to 90
days plus up to 30 days thereafter. Each Charter is subject to
extension at the option of the Charterer for an additional period
of seven years plus, subject to the notice requirement described
below, at the option of the Charterer, up to 90 days plus up to
30 days thereafter upon at least eight months' prior notice of
such extension, which notice shall be irrevocable. The obligation
of the Charterer to pay charterhire for the Vessels commenced on
the Delivery Date. The Charterer is obligated to give written
notice (which shall be irrevocable), not less than three months
prior to the seventh or as applicable, the fourteenth,
anniversary of the Delivery Date (February, 2004 and February,
2011, respectively), of the number of days, if any, by which the
original term or the extended term, respectively, of a Charter
will extend beyond such anniversary.

    Pursuant to the terms of the Charters, the Charterer's
obligation to pay charterhire for the entire charter period is
absolute, whether there is a loss or damage to a Vessel of any
kind or whether such Vessel or any part thereof is rendered unfit
for use or is requisitioned for hire or for title, and regardless
of any other reason whatsoever. The Charter Guarantors have
agreed to guarantee all of the Charterer's obligations under each
of the Charters.

    A Subsidiary has the right to assign the income it receives
under the relevant Charter without the Charterer's consent;
however, the Subsidiary may not otherwise assign its rights and
obligations under such Charter, without the prior written consent
of the Charterer, which consent shall not be unreasonably
withheld, provided that for this purpose (i) a transfer of the
legal ownership of the shares of a Subsidiary shall be deemed to
be an assignment of such rights and obligations by such
Subsidiary for which the Charterer's consent shall be required,
and (ii) without limitation, it shall be reasonable for the
Charterer to withhold its consent to a transfer and assignment by
a Subsidiary of its rights and obligations under the relevant
Charter to a person or entity with whom the Charterer does not
wish, in good faith, for policy or other reasons to enter into a
business relationship.

    The Charterer may not assign its rights and obligations under
each of the Charters nor may it charter a Vessel by demise, to
any company other than a company of the Royal Dutch/Shell Group
of Companies without the prior written consent of the relevant
Subsidiary, which consent shall not be unreasonably withheld. The
Charterer may otherwise charter a Vessel without the prior
consent of the relevant Subsidiary, provided that the Charterer
remains responsible as principal (or appoints another person to
be responsible in its stead) for navigating and managing such
Vessel throughout the period of such Charter and for defraying


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all expenses in connection with such Vessel throughout such
period. In any such case the Charterer will remain liable for
payment and performance of the Charterer's obligations under such
Charter and the relevant Charter Guaranty shall remain in effect
with respect to such Charter.

    Under each Charter, the Charterer is liable for all expenses
of operating, repairing and maintaining the related Vessel, other
than the initial registration expenses of such Vessel, and bears
all risk of loss of or damage to such Vessel during the term of
such Charter. In addition, a Subsidiary (i) has no liability to
the Charterer for breaches of any of its representations or
warranties made to the Charterer with respect to the Vessel owned
by such Subsidiary, except to the extent of actual recoveries
made by a Subsidiary from third parties in relation thereto, and
(ii) is not liable to continue to supply a Vessel or any part
thereof if, following the delivery of such Vessel under a
Charter, such Vessel or any part thereof is lost, damaged
rendered unfit for use, confiscated, seized, requisitioned,
restrained or appropriated and, in any such case or for any
reason whatsoever, the charterhire payable in respect of such
Vessel shall continue to be payable.

    The Charterer is obligated under each Charter to indemnify
the relevant Subsidiary and the Company in respect of events
arising prior to and through the term of the Charters with
respect to, among other things (i) all costs and expenses of
operating, maintaining and replacing all parts in respect of the
Vessels and (ii) all liabilities, claims and proceedings claimed
by anyone arising in any manner out of, among other things, the
operation or chartering of the Vessels, including environmental
liabilities, other than liabilities arising out of the gross
negligence or willful misconduct of such Subsidiary or the
Company. The indemnities provided in the Charters continue in
full force (in respect of events occurring during the pendency of
a Charter) notwithstanding termination or expiration of such
Charter. All amounts payable under the Charters by the Charterer,
including indemnity payments, are required to be paid free from
and without deduction for certain taxes specified in the Charter.
The Charterer has the right at its expense to assume the defense
of indemnified claims.

    During the term of each Charter, the Charterer is required,
at its own cost, (a) to maintain the related Vessel, as well as
the machinery, cargo handling and other equipment, appurtenances
and spare parts thereof, in the same good state of repair and
efficient operating condition as other vessels owned or operated
by companies of the Royal Dutch/Shell Group of Companies,
ordinary wear and tear excepted, and (b) to keep each Vessel with
unexpired classification of Lloyds Register of Shipping and with
other required certificates (including, without limitation, those


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required by the Vessel's country of registry). In addition, the
Charterer is required to drydock such Vessel and clean and paint
its underwater parts whenever the same shall be necessary, in
accordance with the practices applied to other vessels owned or
operated by companies of the Royal Dutch/Shell Group of
Companies. A Subsidiary shall have the right, at any time on
reasonable notice to the Charterer and at such Subsidiary's
expense, to inspect or survey the relevant Vessel, to ascertain
that such Vessel is being properly repaired and maintained,
provided that such inspection or survey will not interfere with
such Vessel's trading requirements and such Subsidiary shall be
required to rebate to Charterer a sum equivalent to charterhire
payable during any period of drydocking caused solely by the
subsidiary's inspection and survey.

    Pursuant to the Charters, the Charterer is obliged to
maintain marine (hull and machinery), war, protection and
indemnity and pollution risk insurance on each Vessel in a manner
consistent with insurance arrangements currently in force in
relation to similar vessels owned or operated by companies of the
Royal Dutch/Shell Group of Companies, provided that the Charterer
is entitled to self insure with respect to marine (hull and
machinery) and war risks.

Charterhire

    The daily charterhire rate payable under each Charter is
comprised of two primary components: (i) the Base Rate, which is
a fixed minimum rate of charterhire equal to $22,069 per Vessel
per day, payable quarterly in arrears, and (ii) Additional Hire,
which is additional charterhire (determined and paid quarterly in
arrears and may equal zero) that will equal the excess, if any,
of a weighted average of the daily time charter rates for three
round-trip trade routes traditionally served by VLCCs, less an
agreed amount of $10,500 during the initial term of the Charters,
and $14,900 for any extended term, representing daily operating
costs over the Base Rate. This charterhire computation is
intended to enable the Company to receive the greater of (i) an
average of prevailing spot charter rates for VLCCs trading on
such routes after deducting daily operating costs of $10,500
during the initial term of the Charters, and $14,900 for any
extended term and (ii) the Base Rate.

    The Charterer is also obligated to pay Supplemental Hire
quarterly in arrears through January 15, 2000 in fixed amounts
that have been calculated with reference to the swap fixed
interest rate under the Credit Facility and which are equivalent
to amounts due under the Amortizing Loan. Supplemental Hire
therefore serves the Company's business purpose of repaying the
Amortizing Loan. The Charterer is obligated to pay supplemental
Hire as set forth below:


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         January 15, 1999 ............$1,819,615
         April 15, 1999 ..............$1,789,599
         July 15, 1999 ...............$1,763,484
         October 15, 1999.............$1,736,769
         January 15, 2000.............$1,709,153

    The amount of Additional Hire, if any, that is payable is
calculated based on a determination of the London Tanker Brokers
Panel (the "Brokers Panel") or another panel of brokers mutually
acceptable to the Subsidiaries and the Charterer of the average
spot rates (the "Average Spot Rates") in Worldscale points over
the three months ending on the last day of the month preceding
the relevant charterhire payment date (the "Hire Payment Date")
on the following three standard notional round voyage routes and
cargo sizes for similar ships:

         (A)  Arabian Gulf to Rotterdam with 280,000 tonnes of
              cargo; 

         (B)  Arabian Gulf to Singapore with 260,000 tonnes of
              cargo; and 

         (C)  Arabian Gulf to Japan with 260,000 tonnes of cargo.

The determination of the Brokers Panel shall be binding upon both
the Subsidiaries and the Charterer. "Worldscale" is an index
commonly used in the tanker industry for calculating freight
rates in the spot charter market.

The Charter Guaranties

    The Charter Guarantors have entered into the separate joint
and several Charter Guaranties in favor of the Company and each
Subsidiary. Pursuant to the Charter Guaranties, the Charter
Guarantors on a joint and several basis fully and unconditionally
guarantee the prompt payment and performance by the Charterer of
all its obligations under and in connection with each Charter to
the relevant Subsidiary and certain indemnification obligations
under the Charters to the Company. The Charter Guaranties do not
confer any rights or remedies thereunder on any person, other
than the Company and the Subsidiaries, and are not guaranties of
the payment of dividends or any other amounts to the holders of
Common Shares. As the Charter Guarantors are holding companies,
the Charter Guaranties are effectively subordinated to the debt
of their subsidiaries which are operating companies.

Dividend Policy

    The Company policy is to pay quarterly distributions to
holders of record of Common Shares in each January, April, July
and October in amounts substantially equal to the charterhire


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received by the Company under the Charters, less cash expenses
and less any reserves required in respect of any contingent
liabilities. Currently, the Company does not have any material
cash expenses other than (i) a management fee of $750,000 per
annum, payable to the Manager (the "Management Fee") (ii) certain
directors' and officers' liability insurance premiums in the
current amount of $90,000 per annum, (iii) the agent bank annual
fee of $50,000, (iv) payment of interest on the Primary Loans and
(v) payments of interest and principal on the Amortizing Loans
through January 15, 2000, (which are equivalent to the amounts of
Supplemental Hire). Any lease payments under the U.K. Finance
Leases are expected to be paid under the Letters of Credit or
otherwise by the Charterer, and therefore are not considered cash
expenses of the Company and are not expected to reduce amounts
available to the Company for the payment of distributions to
shareholders. Declaration and payment of any dividend is subject
to the discretion of the Company's Board of Directors. The
declaration and payment of distributions to shareholders is
prohibited if the Company is in default under the Credit Facility
or if such payment would be or is reasonably likely to result in
an event of default under the Credit Facility. Any payment of
distributions to shareholders by the Company in any year may also
be dependent upon the adoption by the holders of a majority of
the Common Shares voting at the annual meeting of shareholders of
the Company of a resolution effectuating a reduction in the
Company's share premium and a credit to the Company's contributed
capital surplus account. The Company's shareholders adopted such
a resolution at the Company's annual general meeting in March,
1999. The timing and amount of dividend payments will be
dependent upon the Company's earnings, financial condition, cash
requirements and availability, the provisions of Bermuda law
affecting the payment of distributions to shareholders and other
factors.

    There can be no assurance that the Company will not have
other expenses, including extraordinary expenses, which could
include costs of claims and related litigation expenses, which
are not covered by the indemnification provisions of the
Charters, or that the Company will not have contingent
liabilities for which reserves are required. As an "exempted"
Bermuda company, the Company does not expect to pay any income
taxes in Bermuda. The Company also does not expect to pay any
income taxes in the Cayman Islands (the jurisdiction of
organization of the Subsidiaries) or the Isle of Man (the
jurisdiction in which the Vessels are registered).

    In 1998 and 1997, the Company paid the following
distributions to shareholders per Common Share:





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Record Date            Payment Date            Amount per Share

1998
January 26, 1998       February 10, 1998             $0.75
April 27, 1998         May 12, 1998                  $0.45
July 27, 1998          August 11, 1998               $0.63
October 26, 1998       November 10, 1998             $0.53
1997
April 25, 1997         May 9, 1997                   $0.17
July 25, 1997          August 11, 1997               $0.45
October 27, 1997       November 13, 1997             $0.64


    Because each of the Primary Loans matures after the initial
term of the Charters and must be repaid or refinanced at such
time, the Company may, in the last year of the initial term of a
Charter, set aside amounts for payment of interest and principal
which would be due on the related Primary Loan following
termination of such Charter in the event the Charterer does not
renew such Charter or the Company cannot arrange to recharter or
sell the Vessel as of the expiration date of such Charter. In
addition, the Company may have to set aside amounts in the last
year of the initial term of a Charter in anticipation of costs
that may be incurred in connection with the resale or
rechartering of the Vessel in the event the Charterer does not
renew such Charter. These amounts would not be available for the
payment of distributions to shareholders at such time.

    It is expected that any cash distributions by the Company
will exceed the Company's earnings and profits for U.S. tax
purposes, with the result that for each full year that the
Charters are in place a portion of such distributions may be
treated as a return of the "basis" of a U.S. holder's Common
Shares. The Company is a passive foreign investment company
("PFIC"), and as a result U.S. Holders must make a timely tax
election known as "QEF Election" with respect to the Company in
order to prevent certain tax penalties from applying to such U.S.
holder. The Company intends to provide all necessary tax
information to shareholders during February of each year in order
that they may make such election.  For the year ended December
31, 1998, the Company mailed such tax information to its
shareholders in February, 1999, along with the proxy materials
for its 1999 annual general meeting.

Limited Purposes of the Company

    The business of the Company is limited by its Bye-Laws to the
consummation of the transactions described above and related
activities including the ownership of the Subsidiaries engaged in
the acquisition, disposition, ownership, leasing and chartering
of the Vessels and engaging in activities necessary, suitable or


                               14



<PAGE>

convenient to accomplish, or in connection with or incidental to,
the foregoing, including entering into the Credit Facility and
the U.K Finance Leases and the refinancing thereof. During the
terms of the Charters, the Company expects that its only source
of operating revenue from which the Company may pay distributions
to shareholders on the Common Shares will be cash payments from
the Subsidiaries to the Company. Also, during the terms of the
Charters, the Subsidiaries' only source of operating revenue will
be charterhire paid to the Subsidiaries by the Charterer. The
Company's Bye-Laws may be amended only upon the affirmative vote
of 66-2/3% of the outstanding Common Shares, and, insofar as the
Company's purposes or powers are concerned or insofar as the
interests of the lenders under the Credit Facility are
prejudiced, with the approval of the lenders under the Credit
Facility. In addition, the Company and the Subsidiaries have
agreed with the Charterer not to take certain acts which would
subject them to general jurisdiction of the U.S. courts.

Industry Conditions

    Highly Cyclical Nature. The amount of Additional Hire payable
under the Charters, if any, as well as the ability of the Manager
to sell or recharter a Vessel upon the expiration or termination
of the related Charter and the amount of any proceeds therefrom,
will be dependent upon, among other things, economic conditions
in the oil tanker industry. The oil tanker industry has been
highly cyclical, experiencing volatility in charterhire rates and
vessel values resulting from changes in the supply of and the
demand for crude oil and in tanker capacity. The demand for
tankers is influenced by, among other factors, the demand for
crude oil, global and regional economic conditions, developments
in international trade, changes in seaborne and other
transportation patterns, weather patterns, oil production, armed
conflicts, port congestion, canal closures, embargoes and
strikes. In addition, the Company anticipates that the future
demand for VLCCs, such as the Vessels, will also be dependent
upon continued economic growth in the United States, Continental
Europe and the Far East and competition from pipelines and other
sizes of tankers. Adverse economic, political, social or other
developments in any of these regions could have an adverse effect
on the Company's business and results of operations. In addition,
even if demand for crude oil grows in these areas, demand for
VLCCs may not necessarily grow and may even decline. Demand for
crude oil is affected by, among other things, general economic
conditions, commodity prices, environmental concerns, taxation,
weather and competition from alternatives to oil.  Demand for the
seaborne carriage of oil depends partly on the distance between
areas that produce crude oil and areas that consume it and their
demand for oil. The incremental supply of tanker capacity is a
function of the delivery of new vessels and the number of older
vessels scrapped, in lay-up, converted to other uses, reactivated


                               15



<PAGE>

or lost. Such supply may be affected by regulation of maritime
transportation practices by governmental and international
authorities. All of the factors influencing the supply of and
demand for oil tankers are outside the control of the Company,
and the nature, timing and degree of changes in industry
conditions are unpredictable. Furthermore, the amount of
Additional Hire will be determined quarterly with reference to
three round-trip trade routes between the following locations:
(i) the Arabian Gulf and Rotterdam, The Netherlands, (ii) the
Arabian Gulf and Japan and (iii) the Arabian Gulf and Singapore.
Therefore, the demand for oil in the areas serviced by such
routes could have a significant effect on the amount of
Additional Hire that may be payable. There can be no assurance
that Additional Hire will be payable for any quarter.

    Limited Opportunities for VLCCs; Dependence on Arabian Gulf
Crude Oil. VLCCs are specifically designed for the transportation
of crude oil and, due to their size, are used to transport crude
oil primarily from the Arabian Gulf to the Far East, Northern
Europe, the Caribbean and the Louisiana Offshore Oil Port
("LOOP"). While VLCCs are increasingly being used to carry crude
oil from other areas, any decrease in shipments of crude oil from
the Arabian Gulf would have a material adverse effect on the
Company at any time after the expiration or termination of the
Charters (or earlier if such decrease adversely affects
charterhire rates for shipments from the Arabian Gulf). Among the
factors which could lead to such a decrease are (i) increased
crude oil production from non-Arabian Gulf areas, (ii) increased
refining capacity in the Arabian Gulf area, (iii) increased use
of existing and future crude oil pipelines in the Arabian Gulf
area, (iv) a decision by Arabian Gulf oil-producing nations to
increase their crude oil prices or to further decrease or limit
their crude oil production, (v) armed conflict in the Arabian
Gulf or along VLCC trading routes, (vi) political or other
factors and (vii) the development and the relative costs of
nuclear power, natural gas, coal and other alternative sources of
energy.

    Economic Trends. 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.




                               16



<PAGE>

Vessel Values

    General. Tanker values have generally experienced high
volatility.  The fair market value of oil tankers, including the
Vessels, 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 Vessels at the
termination of their respective Charters or earlier at the time
of their sale.

    Oversupply. 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. Notwithstanding the
aging of the world tanker fleet and the adoption of new
environmental regulations which will result in a phaseout of many
single hull tankers, significant deliveries of new VLCCs would
adversely affect market conditions.

Environmental and Other Regulations

    The IMO is an agency organized in 1958 by the United Nations.
Over 100 national governments are members of the IMO, whose
purpose is to develop international regulations and practices
affecting shipping and international trade and to encourage the
adoption of standards of safety and navigation. During the last
35 years, the IMO has initiated over 700 resolutions and 30 major
conventions and protocols. All IMO agreements must be ratified by
the individual government constituents. Outside the United
States, many countries have ratified and follow the liability
scheme adopted by the IMO and set out in the International
Convention on Civil Liability for Oil Pollution Damage, 1969, as
amended by a 1976 SDR Protocol and a 1992 Protocol (the "CLC").
Under these liability conventions, a vessel's registered owner is
strictly liable for pollution damage caused on the territorial
waters of a contracting state by discharge of persistent oil,
subject to certain complete defenses. In countries in which the
1969 CLC applies the limit of liability is on a sliding scale
starting at US$ 1.80 per limitation ton (net ton up to a maximum
of US$ 19 million). In countries in which the 1992 CLC applies
the limitation is calculated as follows: US$4 million for vessels
not exceeding 500 gross tons raising by US$ 568 per gross ton to
US$ 80 million. The exact amount of liability is tied to a unit
of account (SDR) which varies according to a basket of
currencies. The right to limit liability is forfeited where the
spill is caused by the owner's actual fault or privity. Vessels
trading to contracting states must establish evidence of
insurance covering the limited liability of the owner. In


                               17



<PAGE>

jurisdictions where the CLC has not been adopted, various
legislative schemes or common law govern, and liability is
imposed either on the basis of fault or in a manner similar to
the CLC.

    On March 6, 1992, the IMO adopted regulations which set forth
new and upgraded requirements for pollution prevention for
tankers. These regulations went into effect on July 6, 1995 in
the Isle of Man, the jurisdiction in which the Vessels are
registered.  The regulations state, in part, that (i) tankers
between 25 and 30 years old must be of double hull construction
or of a mid-deck design with double side construction, unless
they have wing tanks or double bottom spaces, not used for the
carriage of oil, which cover at least 30% of the length of the
cargo tank section of the hull or trades the vessel in
hydrostatistical balance which ensures at least the same level of
protection against oil spills in the event of collision or
stranding, (ii) tankers 30 years or older must be of double hull
construction or mid-deck design with double side construction,
and (iii) all tankers will be subject to enhanced inspections. In
addition, the regulations provide, in part, that a tanker must be
of double hull construction or a mid-deck design with double side
construction or be of another approved design ensuring the same
level of protection against oil pollution in the event that such
tanker (i) is the subject of a contract for a major conversion or
original construction on or after July 6, 1993, (ii) commences a
major conversion or has its keel laid on or after January 6,
1994, or (iii) completes a major conversion or is a newbuilding
delivered on or after July 6, 1996. All of the Vessels have
double hulls and comply with the IMO regulations.

    The operation of the Vessels is also affected by the IMO's
newly adopted ISM Code, which requires shipowners and bareboat
charterers to develop an extensive "Safety Management System",
which includes policy statements, manuals, standard procedures
and lines of communication. Noncompliance with the ISM Code may
subject the shipowner or bareboat charterer to increased
liability and may lead to decreases in available insurance
coverage for affected Vessels. Although compliance with the ISM
Code is the responsibility of the Charterer, the Company may
become primarily responsible for compliance with the ISM Code if
the Charterer were to default in its obligations under the
Charters.

    The IMO continues to review and introduce new regulations on
a regular basis. It is impossible to predict what additional
regulations, if any, may be passed by the IMO, whether those
regulations will be adopted by member countries and what effect,
if any, such regulations might have on the operation of oil
tankers. The Charterer has advised the Company that it currently
intends to use the Vessels to deliver crude oil primarily to


                               18



<PAGE>

Northern Europe, East Asia, the United States and the Gulf of
Mexico (primarily LOOP) from oil producing areas in the Arabian
Gulf. Because patterns of world crude oil trade are not constant,
the Vessels may load crude oil in any crude oil producing areas
of the world for delivery to areas where oil refineries are
located. In the Company's opinion, trading of the Vessels in such
areas will not expose the Vessels to regulations more stringent
than those of the United States and/or the IMO. However,
additional laws and regulations may be adopted which could limit
the use of oil tankers such as the Vessels in oil producing and
refining regions.

United States Regulation

    On August 18,1990, OPA was enacted and became effective in
the United States. OPA applies to all owners, operators and
bareboat charterers of vessels that trade to the United States or
its territories or possessions or operate in United States
waters, which include the United States territorial seas and the
two hundred nautical mile exclusive economic zone of the United
States. Under OPA, Responsible Parties (as defined therein) are
strictly liable on a joint and several basis for discharges of
oil (unless the discharge results solely from the act or omission
of a third party (subject to certain statutory qualifications the
effects of which have not been determined by any judicial
interpretation), an act of God or an act of war) for all oil
spill containment and clean-up costs and other damages arising
from actual and threatened discharges of oil pertaining to their
vessels in the 200 mile exclusive economic zone of the United
States. These other damages include (i) natural resources damages
and the costs of assessment thereof, (ii) real and personal
property damages, (iii) net loss of taxes, royalties, rent, fees
and other lost government revenues, (iv) lost profits or
impairment of earning capacity due to property or natural
resources damage, (v) net cost of public services necessitated by
a spill response, such as protection from fire, safety or health
hazards, and (vi) loss of subsistence use of natural resources.
OPA limits the strict liability of Responsible Parties to the
greater of $1,200 per gross ton or $10 million per tanker
(subject to possible adjustment for inflation), or approximately
$188.4 million per Vessel. However, this limit does not apply if
the incident is caused by violation of applicable United States
federal safety, construction or operating regulations, or gross
negligence or willful misconduct by the Responsible Party or that
of a person in a contractual relationship with the Responsible
Party, or if the Responsible Party failed or refused to report
the incident or to cooperate and assist in connection with oil
removal activities. There are no limits to U.S. state law
liability.




                               19



<PAGE>

    Under OPA, with certain limited exceptions, all newly built
or converted tankers operating in United States waters must be
built with double hulls conforming to particular specifications.
Tankers that do not have double hulls are subject to structural
and operational measures to reduce oil spills and will be phased
out by the year 2015. All of the Vessels will comply at delivery
with the double hull requirements. In addition, OPA specifies
vessel manning, equipment and other construction requirements
that are in various stages of development by the USCG applicable
to new and to existing vessels.

    The USCG has issued a rule which requires evidence of
financial responsibility equal to the aggregate of OPA's strict
liability limit of $1,200 per gross ton and $300 per gross ton
for potential liability for discharges of hazardous substances
pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"),
Such financial responsibility, evidenced by issuance of a
Certificate of Financial Responsibility ("COFR"), may be
demonstrated by a guaranty in the form of acceptable insurance,
surety bond, self-insurance or other means approved by the USCG.
The rule states that claimants may bring suit directly against an
insurer, surety or other party that furnishes the guaranty. In
the event that such insurer, surety or other party is sued
directly, it is limited to asserting the following defenses: (i)
the defense that the incident was caused by the willful
misconduct of the responsible party; (ii) the defenses available
to the Responsible Party under OPA or CERCLA; (iii) the defense
that the claim exceeds the amount of the guaranty; (iv) the
defense that the claim exceeds the property amount of the
guaranty based on the gross tonnage of the vessel; and (v) the
defense that the claim has not been made under either OPA or
CERCLA. Certain insurance organizations, which typically provide
guaranties, including the major P&I Associations which cover
pollution risks, have refused to furnish guaranties for
Responsible Parties under the USCG rule. Accordingly, Responsible
Parties have procured other sources of financial guaranties at
additional cost. Under the Charters, the Charterer will be
responsible for obtaining a COFR covering the Vessels and for all
other costs of compliance with environmental laws and
regulations.

    Owners or operators of tankers operating in United States
waters must file vessel response plans with the USCG, and their
tankers must operate in compliance with USCG approved plans. Such
response plans must, among other things: (i) identify and ensure,
through contract or other approved means, the availability of
necessary private response resources to respond to a "worst case"
discharge or to a substantial threat of a worst case discharge of
oil or a hazardous substance; (ii) describe crew training and
drills; and (iii) identify a qualified individual with full


                               20



<PAGE>

authority to implement removal actions. If the Charterer intends
to trade a Vessel to or from the United States, it must, pursuant
to the terms of the Charter, prepare and file such a plan with
the USCG at its own expense.

    OPA specifically permits individual states to impose their
own liability regimes with regard to oil pollution incidents
occurring within their boundaries, and many states have enacted
legislation providing for unlimited liability for oil spills. In
some cases, states which have enacted such legislation have not
yet issued implementing regulations defining tanker owners' or
operators' responsibilities under these laws.

    It is impossible to predict what additional legislation, if
any, may be promulgated by the United States or any other country
or authority.

The Year 2000 Computer Question

    The Vessels are provided with computers and have computerized
control systems. Further the Vessels have equipment such as for
example navigational aids, communications systems, machinery
equipment, cargo measuring equipment and alarm systems that rely
on computers or embedded computer chips for proper function.

    The initial term of the Charters extend well beyond the year
2000. Shell International Trading and Shipping Co Ltd.
("STASCO"), the Company which operates the vessels for the
Charterer, has assured the Company that it is very aware of the
year 2000 problem. STASCO has confirmed that in the dealings with
the Company it is taking, and will continue to take, all
reasonable steps to allow business continuity into the year 2000
and beyond.

    The Charterer's obligation to pay charter hire is absolute,
including in circumstances where a Vessel should be unfit for use
due to computer related problems, should such occur in spite of
STASCO's diligent approach to the preparations for the year 2000.
In addition, the Charterer is obliged to indemnify the relevant
Subsidiary and the Company in respect of events arising through
the term of the Charters with respect to, among other things, all
liabilities claims and proceedings arising in any manner out of
the operation of the Vessels with no exclusion of events relating
to computers or problems that could affect computers at certain
dates. The Charterer's obligations as described above are fully
and unconditionally guaranteed, on a joint and several basis, by
the Charter Guarantors.

    The Company relies on banks for its payments and on general
communication equipment. The Company will only rely on
internationally recognized commercial banks and communication


                               21



<PAGE>

companies for providing such services. The Company relies on
services provided by the Manager for its administration and
management. The Manager provides these services at a fixed price.
The Manager has assured the Company that it shall be able to
provide such services without date related interruptions.
Accordingly the Company does not expect to incur any year 2000
related expenses.

Loss and Liability Insurance

    General. There are a number of risks associated with the
operation of the Vessels, including mechanical failure,
collision, property loss, cargo loss or damage and business
interruption due to political circumstances in foreign countries,
hostilities and labor strikes. 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. OPA, which imposes virtually unlimited
liability upon owners, operators and demise charterers of any
vessel trading in the United States exclusive economic zone for
certain oil pollution accidents in the United States, has made
liability insurance more expensive for ship owners and operators
trading in the United States market and has also caused insurers
to consider reducing available liability coverage. Pursuant to
the Charters, the Charterer will bear all risks associated with
the operation of the Vessels, including, without limitation, any
total loss of one or more Vessels. The Charterer will also
indemnify each Subsidiary and the Company, and the Charter
Guarantors have agreed to guarantee such obligation, for all
liabilities arising prior to and during the term of the Charters
in connection with the chartering and operation of the Vessels,
including, under environmental protection laws and regulations,
other than liabilities arising out of the gross negligence or
willful misconduct of such Subsidiary or the Company.

    Hull and Machinery Insurance. The Charterer will be entitled
to self-insure the marine (hull and machinery) and war risk on
each Vessel. In event of loss, following full payments of
charterhire under the Charter's "hell and high water" provisions,
a lump sum payment will be made to the relevant Subsidiary on
expiration of a Charter, based upon three independent
shipbrokers' evaluations of fair market values of similar vessels
at the expiry of the Charter.

    Protection and Indemnity Insurance. Protection and indemnity
insurance covers the legal liability of the Charterer, the
Subsidiaries and, as required, their respective associated
companies or managers for their shipping activities. This
includes the legal liability and other related expenses of injury
or death of crew, passengers and other third parties, loss or


                               22



<PAGE>

damage to cargo, claims arising from collisions with other
vessels, damage to other third-party property, pollution arising
from oil or other substances, and salvage, towing and other
related costs, including wreck removal.  The Company expects that
the Charterer will obtain coverage to the fullest extent from
time to time available on normal terms from members of the
International Group of P&I Associations (currently approximately
$ 4.25 billion, with the exception of oil pollution liability,
which is available up to $500 million per Vessel per accident).
The Company believes that the Charterer has entered each of the
Vessels into a P&I Association that is a member of the
International Group of P&I Associations. As a member of a mutual
association, the Charterer (and, under certain circumstances, a
Subsidiary) will be subject to calls payable to the association
based on its claim records as well as the claim record of all
other members of the association.

    Excess Oil Pollution Insurance. In addition to the $500
million of oil pollution insurance currently available through
the P&I Associations, the Company believes that the Charterer has
purchased from an insurer $200 million of excess coverage for the
Vessels for liabilities arising from oil pollution for a total
coverage of $700 million per Vessel per incident.

ITEM 2 - DESCRIPTION OF PROPERTY

    Other than its interests in the Vessels, the Company has no
interest in any other property.

ITEM 3 - LEGAL PROCEEDINGS

    To the best of the Company's knowledge, no material legal
proceedings including the Company or any directors, officers or
affiliates of the registrant are currently pending and no such
proceedings are known to be contemplated by any governmental
authorities.

ITEM 4 - CONTROL OF REGISTRANT

    The Company is not directly or indirectly owned or controlled
by another corporation or entity or by any foreign government. As
of February 22, 1999, no person known to the Company was the
beneficial owner of more than 10% of the Company's voting
securities.

ITEM 5 - NATURE OF TRADING MARKET

    The following table sets forth the high and low closing
prices of the Common Shares on the Nasdaq National Market for
each of the quarters indicated.



                               23



<PAGE>

                                              NASDAQ
For the quarter ended:                   HIGH           LOW
    March 31, 1998                      29 1/2         25 3/4
    June 30, 1998                       30 3/4         26 1/8
    September 30, 1998                  27             20 5/16
    December 31, 1998                   23             18 1/2

    On February 22, 1999, the closing price of the Common Shares
as quoted on the National Market was $17,50. On such date there
were 17,100,000 Common Shares outstanding, 17,098,300 of which,
representing 99.99% of the Common Shares outstanding, were held
of record in the United States.

ITEM 6 - EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING
SECURITY HOLDERS

    The Company has been designated as a non-resident of Bermuda
for exchange control purposes by the Bermuda Monetary Authority,
whose permission for the issue of the Common Shares was obtained
prior to the offering thereof.

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

    Subject to the foregoing, there are no limitations on the
rights of owners of the Common Shares to hold or vote their
shares. Because the Company has been designated as non-resident
for Bermuda exchange control purposes, there are no restrictions
on its ability to transfer funds in and out of Bermuda or to pay
dividends to United States residents who are holders of the
Common Shares, other than in respect of local Bermuda currency.

    In accordance with Bermuda law, share certificates may be
issued only in the names of corporations or individuals. In the
case of an applicant acting in a special capacity (for example,
as an executor or trustee), certificates may, at the request of
the applicant, record the capacity in which the applicant is
acting. Notwithstanding the recording of any such special
capacity, the Company is not bound to investigate or incur any
responsibility in respect of the proper administration of any
such estate or trust.

    The Company will take no notice of any trust applicable to
any of its shares or other securities whether or not it had
notice of such trust.


                               24



<PAGE>

    As an "exempted company", the Company is exempt from Bermuda
laws which restrict the percentage of share capital that may be
held by non-Bermudians, but as an exempted company, the Company
may not participate in certain business transactions including:
(i) the acquisition or holding of land in Bermuda (except that
required for its business and held by way of lease or tenancy for
terms of not more than 21 years) without the express
authorization of the Bermuda legislature; (ii) the taking of
mortgages on land in Bermuda to secure an amount in excess of
$50,000 without the consent of the Minister of Finance of
Bermuda; (iii) the acquisition of securities created or issued
by, or any interest in, any local company or business, other than
certain types of Bermuda government securities or securities of
another "exempted company, exempted partnership or other
corporation or partnership resident in Bermuda but incorporated
abroad; or (iv) the carrying on of business of any kind in
Bermuda, except in so far as may be necessary for the carrying on
of its business outside Bermuda or under a license granted by the
Minister of Finance of Bermuda.

    There is a statutory remedy under Section 111 of the
Companies Act 1981 which provides that a shareholder may seek
redress in the Bermuda courts as long as such shareholder can
establish that the Company's affairs are being conducted, or have
been conducted, in a manner oppressive or prejudicial to the
interests of some part of the shareholders, including such
shareholder. However, this remedy has not yet been interpreted by
the Bermuda courts.

    The Bermuda government actively encourages foreign investment
in "exempted" entities like the Company that are based in Bermuda
but do not operate in competition with local business. In
addition to having no restrictions on the degree of foreign
ownership, the Company is subject neither to taxes on its income
or dividends nor to any exchange controls in Bermuda. In
addition, there is no capital gains tax in Bermuda, and profits
can be accumulated by the Company, as required, without
limitation. There is no income tax treaty between the United
States and Bermuda pertaining to the taxation of income other
than applicable to insurance enterprises.

ITEM 7 - TAXATION

    The Company is incorporated in Bermuda. Under current Bermuda
law, the Company is not subject to tax on income or capital
gains, and no Bermuda withholding tax will be imposed upon
payments of dividends by the Company to its shareholders. No
Bermuda tax is imposed on holders with respect to the sale or
exchange of Common Shares. Furthermore, the Company has received
from the Minister of Finance of Bermuda under the Exempted
Undertakings Tax Protection Act 1966, as amended, an assurance


                               25



<PAGE>

that, in the event that Bermuda enacts any legislation imposing
any tax computed on profits or income, including any dividend or
capital gains withholding tax, or computed on any capital asset,
appreciation, or any tax in the nature of an estate, duty or
inheritance tax, then the imposition of any such tax shall not be
applicable. The assurance further provides that such taxes, and
any tax in the nature of estate duty or inheritance tax, shall
not be applicable to the Company or any of its operations, nor to
the shares, debentures or other obligations of the Company, until
March 2016.

    There are no provisions of any reciprocal tax treaty between
Bermuda and the United States affecting withholding.

ITEM 8 - SELECTED FINANCIAL DATA

    The following consolidated balance sheet as of December 31,
1998 and December 31, 1997, and statement of operations for the
year ended December 31, 1998, and for the period from September
18, 1996 to December 31, 1997, have been derived from the
Financial Statements of the Company which are included herein and
which have been audited by Deloitte & Touche, independent
auditors, whose report thereon is also included herein. The
balance sheet and operating information provided should be read
in conjunction with the accompanying Financial Statements and the
related notes thereto, and the discussion under "Item 9 -
Managements Discussion and Analysis of Financial Condition and
Results of Operation" included elsewhere herein.

























                               26



<PAGE>

                   CONSOLIDATED BALANCE SHEETS
                        (in U.S. Dollars)

ASSETS

Current assets                    Dec 31, 1998     Dec 31, 1997

Cash                              $    315,223     $    217,374
Current installments of notes     
  receivable                         6,726,152        6,726,151
Charter hire receivable             10,268,805       15,449,599
Prepaid expenses                        14,000           14,000

Total current assets                17,324,180       22,407,124

Notes receivable                     1,681,538        8,407,690
Vessels under capital lease,                  
  less accumulated depreciation 
  of $32,449,053 and $14,856,193   407,372,491      424,965,352
Capitalized financing fees and                
  expenses, less accumulated 
  amortization of $685,291 and 
  $313,748                            1,915,513       2,287,056

TOTAL ASSETS                      $428,293,722     $458,067,222
                                  =============    =============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accrued expenses and other
  current liabilities             $  2,300,568     $  2,377,736
Current installments of
  credit facility                    6,726,152        6,726,151

Total current liabilities            9,026,720        9,103,887

Credit facility                    127,078,936      133,805,088

Shareholders' equity

Common shares, par value $0.01 per share:
Authorized and outstanding        
  17,100,000                           171,000          171,000
Additional paid-in capital                   -      314,987,247
Contributed capital surplus       





                               27



<PAGE>

  account                          292,017,066           -     

Total shareholders' equity         292,188,066      315,158,247

    
TOTAL LIABILITIES AND 
SHAREHOLDERS' EQUITY              $428,293,722     $458,067,222
                                   ============     ============

         See notes to consolidated financial statements.











































                               28



<PAGE>

              CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in U.S. Dollars)

                                   Jan 1, 1998     Sep 18, 1996
                                - Dec 31, 1998   - Dec 31, 1997
    
Charter hire revenue              $ 45,039,385     $ 42,138,180

Operating expenses:
Depreciation of vessels under                 
  capital leases                   -17,592,860      -14,856,193
Management fee                        -750,000         -630,308
Administration expenses                -91,140          -77,993
    
Operating income                    26,605,385       26,573,686


Interest income                        888,120        1,737,023
Interest expense                    -9,686,142       -8,517,664
Other financial costs                 -421,543         -313,748
Net income                        $ 17,385,820     $ 19,479,297
                                   ===========      ===========

Earnings per common share                $1.02            $1.61

Weighted average number of 
  shares outstanding                17,100,000       12,127,021

         See notes to consolidated financial statements.
























                               29



<PAGE>

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

Overview

    In February, 1997, the Company offered and sold to the public
16,100,000 Common Shares at the initial public offering price of
$20 per share. Simultaneously the Company sold 1,000,000 Common
Shares at a price of $20 per share to ICB International Ltd. The
Company is managed by the Manager, which is another wholly owned
subsidiary of ICB Shipping AB.

    The Company's five subsidiaries each purchased one VLCC from
their previous owner on February 27, 1997 and immediately
delivered the Vessels to the Charterer under five separate "hell
and high water" bareboat charters, each with a minimum term of
seven years with an option for the Charterer to extend the period
for each Vessel with another seven year period.

The Charters

    Under the Charters, the Charterer pays the higher of a base
rate of hire or a spot market related rate. The charterhire is
payable quarterly in arrears and the spot market rate of hire is
assessed on a quarterly basis. In each quarter where the spot
market related rate is lower than the base rate the charterhire
payable is the base rate. In each quarter where the spot market
related rate is higher than the base rate, the spot market
related rate is payable.

    The base rate is the aggregate of a bareboat charter
component of $22,069 per vessel per day and an operating element
of $10,500 per day (in the first seven years) which result in a
time charter equivalent rate of $32,569 per day.

    The spot market related rate is assessed through a formula
agreed between the Company and the Charterer and based on market
awards provided by the London Tanker Broker Panel. The London
Tanker Broker Panel is asked to provide for each quarter the
average spot rates for three standard notional round voyages for
ships similar to the Vessels:

i)     Arabian Gulf to Rotterdam with 280,000 tonnes of cargo;

ii)    Arabian Gulf to Singapore with 260,000 tonnes of cargo;
       and

iii)   Arabian Gulf to Japan with 260,000 tonnes of cargo.





                               30



<PAGE>

    The relevant spot rates are weighted with (i) representing
50% and (ii) and (iii) each representing 25% when the spot market
related rate is determined.

    The calculated spot market related rates for 1998 were 

for the first quarter 1998             $29,645
for the second quarter 1998            $39,989
for the third quarter 1998             $35,585
for the fourth quarter 1998            $27,015

    As a consequence, charterhire was payable at the Base Rate
for the first and fourth quarters of 1998 and at the higher spot
market related rate in the second and third quarters of 1998. The
charterhire payment for the fourth quarter of 1998 was received
in 1999.

The Tanker Market

    According to preliminary data from industry sources which the
Company has not verified, global oil consumption increased only
marginally by one-half percent in 1998. The consumption in the
Asian region declined by 2 % mainly due to a drop in Korean and
Japanese demand by 15 % and 2 %, respectively. Outside Asia
demand increased, partly due to historically low oil prices.

    Continued growth in Middle East exports counteracted to some
degree the effect of the decline in Asian consumption that would
otherwise have put further pressure on VLCC rates. The demand for
transportation of Middle Ease crude to Western destinations
increased in the year.

    The VLCC market in 1998 remained strong through August but
weakened in the latter part of the year. The market has recovered
somewhat in the early part of 1999.

    In 1998, 17 VLCCs were scrapped or converted to storage or
other uses, while 13 newly built vessels were delivered. A total
of 34 newbuilding contracts were signed during the year, and at
year-end the orderbook included 88 VLCCs, corresponding to 20 %
of the existing fleet, which then comprised 432 VLCCs. In 1999,
deliveries are scheduled for 33 VLCCs followed by 41 in 2000 and
14 in 2001.

    Of the existing VLCCs, 140 will reach 25 years of age during
the next three years. As discussed elsewhere in this Annual
Report, when tank vessels reach 25 years they are required to be
retrofitted with separate ballast tanks or loaded to hydrostatic
balance, which limits cargo carrying capacity.




                               31



<PAGE>

    Average earnings for VLCCs in the first three quarters of the
year were better than in previous years. However, due to weaker
earnings in the final quarter, earnings as a whole were down
compared with 1997. Charter rates hit a low point of about
$20,000 per day in September but subsequently recovered and were
about $30,000 per day in January/February 1999.

Year Ended December 31, 1998 compared to Period
September 18, 1996 - December 31, 1997

Charterhire

    In total, charterhire earned during 1998 increased by 6.9 %
to $45,039,385 from $42,138,180 for the period ending December
31, 1997, reflecting a full year of operations during 1998. Of
this amount, $40,275,925 ($33,920,740 in 1997) was charterhire
paid at the Base Rate. The remaining $4,763,460 ($8,217,440 in
1997) was Additional Hire. More hire was paid at the Base Rate in
1998, because the Company's Vessels were in operation for the
full year, as compared to approximately 10 months in 1997, with
the Vessels having been delivered on February 27, 1997.
Additional Hire was higher in 1997, due to the higher market
charter rates for portions of that year, which resulted in
additional payments under the formula under which the Charterer
is obligated to pay Additional Hire.

Operating Expenses

    Operating expenses during 1998 increased by 18.4 % to
$18,434,000 from $15,564,494 in the period ending December 31,
1997. This increase in operating expenses again reflected the
Company's having operated for a full year in 1998. Depreciation
of the Company's Vessels increased by 18.4 % to $17,592,860 in
1998 from $14,856,193 in 1997, reflecting a full year's
depreciation in 1998 as compared to approximately 10 months
during 1997. The management fee paid by the Company to the
Manager increased by 19 % to $750,000 in 1998 from $630,308 in
1997, reflecting a payment for the full year in 1998 as compared
to a pro rata payment in 1997 from the closing of the Company's
initial public offering in February, 1997. Other administrative
expenses, consisting of premiums for the Company's directors' and
officers' liability insurance increased by 16.9 % to $91,140 in
1998 from $77,993 in 1997, again reflecting a full year of
operations. The Company does not expect to incur significant
administrative expenses, apart from premiums in respect of the
Company's directors' and officers' and general liability
insurance, which the Company prepays on an annual basis. There
can be no assurance, however, that the Company will not have
other cash expenses or contingent liabilities for which reserves
will be required.



                               32



<PAGE>

Interest Income and Expense

    Interest income during 1998 decreased by 48.9 % to $888,120
from $1,737,023 in the period ending December 31, 1997. The
Company received interest on deposits in the amount of $160,580
in 1998, as compared to $779,244 in 1997, when the Company had on
deposit the proceeds of its initial public offering from the
closing of that offering on February 12, 1997, until Delivery
Date on February 27, 1997. Interest received from the Charterer
(in the form of Supplemental Hire) in respect of the Amortising
Loan totaled $727,540 in 1998 as compared to $957,779 in 1997.

    Interest expense increased by 13.7 % to $9,686,142 in 1998
from $8,517,664 in 1997, primarily due to the Company's paying
interest on the Primary Loan for the full year in 1998. Interest
relating to the Primary Loan was $8,959,859 in 1998 as compared
to $7,561,055 in 1997. Interest relating to the Amortising Loan
was $726,283 in 1998 as compared to $956,609 in 1997, and
depreciation of the Credit Facility expense was $371,543 in 1998
as compared to $313,748 in 1997. During 1998, the Company
incurred a fee to the agent bank for the Credit Facility in the
amount of $50,000. There can be no assurance that the Company
will not have other financial expenses for which reserves will be
required.

Liquidity and capital resources

    Total assets of the Company at December 31, 1998, were
$428,293,722 compared to $458,067,222 at December 31, 1997.

    The difference was primarily due to a full year's
depreciation of the vessels during 1998, amortization of notes
receivable and lower charterhire receivable at December 31, 1998
than at December 31, 1997.

    The Company's shareholders' equity at December 31, 1998, was
$292,188,066 as compared to $315,158,247 at December 31, 1997.
The decrease was due to net income for 1998 of $17,385,820 as
compared to $19,479,297 in 1997 less distributions to the
shareholders of $40,356,001 as compared to $21,546,000 in 1997.

    The Company's sources of capital have been the proceeds of
its initial public offering and the Credit Facility and the U.K.
Finance Lease. While the Manager is required to bear the
Company's expenses (other than certain extraordinary expenses,
insurance premiums for directors' and officers' liability and
general liability insurance and principal and interest on account
of the Credit Facility), the Manager has no additional obligation
to make additional capital contributions to the Company. The
Company has sufficient sources of income through the payment of
charterhire by the Charterer during the term of the Charters to


                               33



<PAGE>

pay ordinary recurring expenses that are not borne by the
Manager. However, there can be no assurance that the Company will
be able to repay or refinance its borrowings when the Primary
Loan becomes due, or that it will not incur extraordinary
expenses. Payments of principal and interest on the Amortizing
Loan are due in quarterly installments through January 15, 2000.
The Supplemental Hire is in an amount equivalent to those
quarterly installments.

Inflation 

    Management does not believe that inflation will significantly
affect the Company's expenses over the term of the Charters.
However, during the term of the Charters, inflationary pressures
could result in increased spot charter rates, thereby resulting
in an increase in Additional Hire being payable by the Charterer.
On the other hand, in the event that inflation becomes a
significant factor in the world economy, management believes that
inflationary pressures could materially and adversely affect the
market for crude oil and oil tankers (including the Vessels) and
result in increased vessel operating costs. These factors may
affect the Charterer's decision as to whether to extend the term
with respect to one or more of the Charters and may be
significant to the Company in the event that the Charterer does
not exercise such rights of extension.

    The Company's borrowings under the Credit Facility will bear
interest at a floating rate. The Company has entered into the
Swap, which effectively converts its obligations to a fixed rate,
assuming the Swap Counterparty performs its obligations
thereunder. In the event of a default by such Swap Counterparty,
the Company could face increased interest expense.

Currency Exchange Rates 

    Although the Company's activities will be conducted
worldwide, the international shipping industry's functional
currency is the United States Dollar and virtually all of the
Company's operating revenues and most of its anticipated cash
expenses are expected to be denominated in United States Dollars.
Accordingly, the Company's operating results following expiration
of termination of the Charters are not expected to be adversely
affected by movements in currency exchange rates or the
imposition of currency controls in the jurisdictions in which the
Vessels operate.








                               34



<PAGE>

ITEM 10 - DIRECTORS AND OFFICERS OF REGISTRANT

Directors and Senior Management of the Company and the Manager

    Pursuant to a Management Agreement with the Company (the
"Management Agreement"), the Manager provides management,
administrative and advisory services to the Company.

    Set forth below are the names and positions of the directors
and executive officers of the Company and the Manager.  Directors
of both the Company and the Manager are elected annually, and
each director elected holds office until a successor is elected.
Officers of both the Company and the Manager are elected from
time to time by vote of the respective board of directors and
hold office until a successor is elected.


                           The Company

Name                              Age   Position

Clarence Dybeck                   68    Director and Chairman
Ola Lorentzon                     49    Director; Deputy Chairman
                                          and Treasurer
Douglas C. Wolcott                67    Director
David M. White                    59    Director
Timothy Counsell                  40    Director
Jackie Armstrong                  33    Secretary

                           The Manager

Name                              Age   Position

Johannes C.J. Michel              50    Director and Chairman
Per Eriksson                      49    Director; Deputy Chairman
                                          and Treasurer
James Keyes                       35    Director
Chantal Hadall                    29    Secretary

    Certain biographical information with respect to each
director and executive officer of the Company and the Manager is
set forth below.

    Clarence Dybeck has been Chairman and a director of the
Company since September 18, 1996. Mr. Dybeck has also served as
Chairman of the Board and as a director of ICB since 1988 and
1986, respectively. Mr. Dybeck has also been Chairman of
Stockholm Chartering AB since 1990 and of Arvak Ltd. since 1997.
Mr. Dybeck has been involved in the commercial shipping industry
since 1956.



                               35



<PAGE>

    Ola Lorentzon has been Deputy Chairman, Treasurer and a
director of the Company since September 18, 1996. Mr. Lorentzon
has also been a director and President of ICB since 1987. Mr.
Lorentzon is also currently a director of The Swedish Protection
and Indemnity Club (SAAF), Swedish Ships Mortgage Bank and The
Swedish Shipowners' Association. Mr. Lorentzon is also Deputy
Chairman of the Liberian Shipowners Council and a member of the
International Association of Tanker Owners (Intertanko) Council.

    Douglas C. Wolcott has been a director of the Company since
September 18, 1996. Mr. Wolcott served as President of Chevron
Shipping Corporation until 1994. He was formerly the Chairman of
the Oil Companies International Forum (OCIMF), the Interim
Supplement to Tanker Liability for Oil Pollution (CRISTAL) and
the Marine Preservation Association (MPA). Mr. Wolcott also
served as Deputy Chairman and Director of the United Kingdom
Protection and Indemnity Club and as a director of The American
Bureau of Shipping and London & Overseas Freighters Limited. He
is currently also a director of the Golden Ocean Group Limited, a
tanker and dry bulk vessel owner, and the On-the-Go Software Co,
a software company.

    David M. White has been a director of the Company since
September 18, 1996. Mr. White was Chairman of Dan White
Investment Limited which is now closed. Mr. White has also served
as a director of NatWest Equity Primary Markets Limited from
January 1992 to March 1996, and was previously a director of both
NatWest Markets Corporate Finance Limited and NatWest Markets
Securities Limited until December 1991.

    Timothy J. Counsell has been a director of the Company since
March 27, 1998. Mr. Counsell is a partner of the law firm of
Appleby Spurling & Kempe, Bermudian counsel to the Company and
joined the firm in 1990. Mr. Counsell is currently a director of
BT Shipping Limited and alternate director of Mosvold Shipping,
Bona Shipholding Ltd. and Benor Tankers Ltd.

    Jackie Armstrong has been Secretary of the Company since
October 15, 1998. Ms. Armstrong has been an associate of the law
firm of Appleby Spurling & Kempe, Bermudan counsel to the
Company, since 1998.

    Johannes C.J. Michel has been the Chairman and a director of
the Manager since October 23, 1996. Mr. Michel has also served as
Managing Director of Clermont Shipping B.V., a wholly-owned
subsidiary of ICB, since 1990 and as Corporate Controller and
Managing Director of Chester International B.V. since 1987.

    Per Eriksson has been Deputy Chairman and a director of the
Manager since October 23, 1996. Mr. Eriksson has also served as
Managing Director of Ipiranga Shipping Ltd., an indirect wholly-


                               36



<PAGE>

owned subsidiary of ICB, since 1991. Before his employment in the
ICB group, Mr. Eriksson served as Financial Controller of Alfa
Romeo Svenska AB from 1988 to 1991.

    James Keyes has been a director of the Manager since October
23, 1996.  Mr. Keyes is a partner of the law firm of Appleby,
Spurling & Kempe, Bermudan counsel to the Company and the
Manager, since March 1993.

    Chantal Hadall has been Secretary of the Manager since
December 29, 1998. Mrs. Hadall has been a Corporate Administrator
employed by A.S. & K. Services Ltd, an affiliate of Appleby,
Spurling & Kempe, Bermudan counsel to the Company, since 1998.

Committees of the Board of Directors

    Pursuant to the rules of the National Association of
Securities Dealers, Inc., relating to companies whose shares are
quoted on the Nasdaq National Market, the Company has established
an audit committee comprised of Messrs. White and Wolcott,
independent directors of the Company.

Management Agreement

    General. Under the Management Agreement the Manager is
required to manage the day-to-day business of the Company
subject, always, to the objectives and policies of the Company as
established from time to time by the Board. All decisions of a
material nature concerning the business of the Company are
reserved to the Company's Board of Directors. The Management
Agreement will terminate in 2012, unless earlier terminated
pursuant to the terms thereof, as discussed below.

    Management Fee and Other Expenses. For its services under the
Management Agreement, the Manager is entitled to a Management Fee
equal to $750,000 per annum. The Company believes that these fees
are substantially on the same terms that would be obtained from a
non-affiliated party. The Manager was not affiliated with the
Company, the Charterer or Guarantors at the time these fees were
negotiated.

    Pursuant to the Management Agreement, the Manager is required
to pay from the Management Fee, on behalf of the Company, all of
the Company's expenses including the Company's directors' fees
and expenses; provided, however, that the Manager is not
obligated to pay, and the Company is required to pay from its own
funds (i) all expenses, including attorneys' fees and expenses,
incurred on behalf of the Company in connection with (A) the
closing of the Company's public offering and all fees and
expenses related thereto and to the documents and agreements
described herein, including in connection with the Credit


                               37



<PAGE>

Facility and the U.K. Finance Leases, (B) any litigation
commenced by or against the Company unless arising from the
Manager's gross negligence or willful misconduct, and (C) any
investigation by any governmental, regulatory or self-regulatory
authority involving the Company or the Offerings unless arising
from the Manager's gross negligence or willful misconduct,
(ii) all premiums for insurance of any nature, including
directors' and officers' liability insurance and general
liability insurance, (iii) all costs in connection with the
administration and the registration and listing of the Common
Shares, (iv) principal and interest on the Credit Facility,
(v) brokerage commissions, if any, payable by the Company,
(vi) all costs and expenses required to be incurred or paid by
the Company in connection with the redelivery of any Vessel
following the expiration or earlier termination of the related
Charter, (including, without limitation, any drydocking fees and
the cost of special surveys and appraisals) and (vii) any amount
due to be paid by the Company pursuant to the U.K. Finance Lease
Transactions.

    Notwithstanding the foregoing, the Manager will have no
liability to the Company under the Management Agreement for
errors of judgment or negligence other than its gross negligence
or willful misconduct.

    Manager's Role at Expiration of Charters. In the event the
Charterer shall notify a Subsidiary that it will not extend or
renew a Charter for a Vessel, the Manager is required under the
Management Agreement to analyze the alternatives available to the
Company for the use or disposition of such Vessel, including the
sale of such Vessel (or the Subsidiary owning such Vessel) and
the distribution of the proceeds to the Company's shareholders,
and to report to the Board with its recommendations and the
reasons for such recommendations at least five months before the
expiration of such Charter. If directed by the Company's
shareholders to sell a Vessel (or the Subsidiary owning such
Vessel), the Manager is required upon the Board's request to
solicit bids for the sale of such Vessel (or the Subsidiary
owning such Vessel) for the presentation to the Board.  In such
case, the Manager will be obligated to recommend the sale of the
Vessel to the bidder which has offered the bid most economically
favorable to the Company and the holders of the Common Shares.
The Manager will receive a commission equal to 1% of the net
proceeds of such sale unless sold to the Manager or an affiliate
of the Manager.  If not directed by the Company shareholders to
sell the Vessel, the Manager is required to attempt to recharter
the Vessel on an arms-length basis upon such terms as the Manager
deems appropriate, subject to the approval of the Board. The
Manager will receive a commission equal to 1.25% of the gross
freight earned from such rechartering (which is the standard
industry commission). In either such case, the Manager, on behalf


                               38



<PAGE>

of the Company, may utilize the services of brokers and lawyers,
and enter into such compensation arrangements with them, subject
to the Board's approval, as the Manager deems appropriate.

    If, upon the expiration of a Charter, the Company undertakes
any operational responsibility with respect to the related Vessel
and requests the Manager to perform any of such responsibility on
the Company's behalf, the parties will negotiate a new fee and
expense arrangement. If the parties are unable to reach a new fee
and expense arrangement, either party may terminate the
Management Agreement on 30 days' notice to the other party.

    Termination of Management Agreement. In addition to the
circumstance set forth above, the Company may terminate the
Management Agreement at any time upon 30 days' notice to the
Manager for any reason, provided that any such termination shall
have been approved by a resolution duly adopted by the
affirmative vote of the holders of at least 66-2/3% of the
Company's outstanding Common Shares. The Company may terminate
the Management Agreement at any time upon five business days'
prior written notice to the Manager in the event of the Manager's
material breach thereof, the failure of the Manager to maintain
adequate authorization to perform its duties thereunder, the
Manager's insolvency, in the event that it becomes unlawful for
the Manager to perform its duties thereunder or if the Manager
ceases to be wholly-owned, directly or indirectly, by ICB. The
Manager may terminate the Management Agreement upon ten business
days' prior written notice to the Company in the event that the
Company undergoes a "change of control" which is the election of
any director whose election was not recommended by the then
current Board. Upon any termination of the Management Agreement,
the Manager is required to promptly wind up its services
thereunder in such a manner as to minimize any interruption to
the Company's business and submit a final accounting of funds
received and disbursed under the Management Agreement to the
Company and any undisbursed funds of the Company in the Manager's
possession or control will be promptly paid by the Manager as
directed by the Company. The Company believes that in the case of
any termination of the Management Agreement, the Company could
obtain an appropriate alternative arrangement for the management
of the Company, although there can be no assurance that such
alternative arrangement would not cause the Company to incur
additional cash expenses. In the case of a termination without
cause by the Company upon a resolution adopted by the holders of
at least 66 2/3% of the Company's Common Shares (as described
above) or by the Manager in the case of a "change in control,"
the Company shall pay to the Manager an amount equal to the
present value calculated at a discount rate of 5% per annum of
all fees which the Manager would have received through the
seventh anniversary of the Delivery Date in the absence of such
termination, and following the seventh anniversary of the


                               39



<PAGE>

Delivery Date, the Company shall pay to the Manager an amount
equal to the present value calculated at a discount rate of 5%
per annum of all fees which the Manager would have received
through the fifteenth anniversary of the Delivery Date in the
absence of such termination.

ITEM 11 - COMPENSATION OF DIRECTORS AND OFFICERS

    Pursuant to the Management Agreement, the Manager pays from
the Management Fee the annual directors' fees of the Company. For
1998, the directors received from the Manager $72,000 in fees in
the aggregate. No separate compensation was paid to the Company's
officers. The manager expects to pay the same directors' fee for
the year 1999 as was paid to directors for 1998.

ITEM 12 - OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR
SUBSIDIARIES

    Not Applicable.

ITEM 13 - INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

    Messrs. Dybeck and Lorentzon are, respectively, Chairman and
Chief Executive Officer of ICB, which is the indirect parent of
the Manager.

ITEM 15 - DEFAULTS UPON SENIOR SECURITIES

    Not Applicable.

ITEM 16 - CHANGES IN SECURITIES, CHANGES IN SECURITIES
FOR REGISTERED SECURITIES AND USE OF PROCEEDS

    Not Applicable.

ITEM 17 - FINANCIAL STATEMENTS

    Not Applicable.

ITEM 18 - FINANCIAL STATEMENTS

    See the financial statements listed in Item 19 below and set
forth on pages F-1 through F-8.

ITEM 19 - FINANCIAL STATEMENTS AND EXHIBITS

Financial Statements

    The following financial statements, together with the report
of Deloitte & Touche thereon, are filed as part of this annual



                               40



<PAGE>

report:

Index to Financial Statements

                                                             Page

         Independent Auditors' Report                        F-1

         Consolidated Financial Statements:
         Consolidated Balance Sheets as of                   F-2
         December 31, 1998 and December 31, 1997

         Consolidated Statements of Operations
         for the year ended December 31, 1998 and
         for the period from September 18, 1996
         to December 31, 1997                                F-3

         Consolidated Statements of Cash Flows
         for the year ended December 31, 1998 and  
         for the period from September 18, 1996 
         to December 31, 1997                                F-4

         Consolidated Statements of Shareholders'
         Equity for the year ended December 31, 
         1998, and for the period from September 
         18, 1996 to December 31, 1997                       F-5

         Notes to Consolidated Financial Statements          F-6

























                               41



<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Knightsbridge Tankers Limited
Bermuda

We have audited the accompanying consolidated balance sheets of
Knightsbridge Tankers Limited and subsidiaries as of December 31,
1998 and September 18, 1997 and the related consolidated
statements of operations, shareholders' equity and cash flows for
the period from September 18, 1996 through December 31, 1997.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.

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

In our opinion, such consolidated financial statements present
fairly, in all material respects, the consolidated financial
position of Knightsbridge Tankers Limited as of December 31, 1998
and 1997 and the results of their operations and its cash flows
for the year ended December 31, 1998 and for the period from
September 18, 1996 through December 31, 1997 in conformity with
generally accepted accounting principles in the United States of
America.

Deloitte & Touche
Stockholm, Sweden
March 10, 1998












                               42



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
                   CONSOLIDATED BALANCE SHEETS
                        (in U.S. Dollars)

ASSETS

Current assets                    Dec 31, 1998     Dec 31, 1997

Cash                              $    315,223     $    217,374
Current installments of notes                                  
  receivable                         6,726,152        6,726,151
Charter hire receivable             10,268,805       15,449,599
Prepaid expenses                        14,000           14,000

Total current assets                17,324,180       22,407,124

Notes receivable                     1,681,538        8,407,690
Vessels under capital lease,                       
  less accumulated depreciation 
  of $32,449,053 and $14,856,193   407,372,491      424,965,352
Capitalized financing fees and                     
  expenses, less accumulated 
  amortization of $685,291 and 
  $313,748                           1,915,513        2,287,056

TOTAL ASSETS                      $428,293,722     $458,067,222
                                  =============    ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accrued expenses and other
  current liabilities             $  2,300,568     $  2,377,736
Current installments of
  credit facility                    6,726,152        6,726,151

Total current liabilities            9,026,720        9,103,887

Credit facility                    127,078,936      133,805,088

Shareholders' equity

Common shares, par value $0.01 per share:
Authorized and outstanding        
  17,100,000                           171,000          171,000
Additional paid-in capital                   -      314,987,247
Contributed capital surplus       




                               43



<PAGE>

  account                          292,017,066           -     

Total shareholders' equity         292,188,066      315,158,247

    
TOTAL LIABILITIES AND 
SHAREHOLDERS' EQUITY              $428,293,722     $458,067,222
                                  =============    ============


         See notes to consolidated financial statements.










































                               44



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
              CONSOLIDATED STATEMENT OF OPERATIONS
                        (in U.S. Dollars)


                                   Jan 1, 1998     Sep 18, 1996
                                - Dec 31, 1998   - Dec 31, 1997

Charter hire revenue              $ 45,039,385     $ 42,138,180

Operating expenses:
Depreciation of vessels under                 
  capital leases                   -17,592,860      -14,856,193
Management fee                        -750,000         -630,308
Administration expenses                -91,140          -77,993
    
Operating income                    26,605,385       26,573,686

Interest income                        888,120        1,737,023
Interest expense                    -9,686,142       -8,517,664
Other financial costs                 -421,543         -313,748
Net income                        $ 17,385,820     $ 19,479,297
                                  ============     ============

Earnings per common share                $1.02           $ 1.61

Weighted average number of
shares outstanding                  17,100,000       12,127,021

         See notes to consolidated financial statements.























                               45



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in U.S. Dollars)

Cash flows from                    Jan 1, 1998     Sep 18, 1996
operating activities             -Dec 31, 1998    -Dec 31, 1997

Net income                         $17,385,820      $19,479,297

Items to reconcile net income to 
net cash provided by operating 
  activities:
Depreciation                        17,592,860       14,856,193
Amortization of capitalized
  fees and expenses                    371,543          313,748

Changes in operating assets
  and liabilities:
Receivables                         11,906,946      -22,189,750
Accrued expenses and other        
  current liabilities                  -77,167        9,103,887
Net cash provided by operating                
  activities                        47,180,002       21,563,375

Cash flows from investing activities

Notes receivable from                         
  Shell International                        -      -15,133,841
Purchase of vessels under         
  capital lease                              -     -439,821,545
Net cash used in investing                    
  activities                                 -     -454,955,386

Cash flows from financing activities

Loan proceeds                                -      142,975,049
Repayments of loan                  -6,726,152       -5,044,614
Net proceeds from share                            
  offerings                                  -      317,224,950
Redemption of original                        
  share capital                              -          -12,000
Distribution to shareholders       -40,356,001      -21,546,000
Net cash used in/provided by 
  financing activities             -47,082,153      433,597,385



Net increase in cash and                      
  cash equivalents                      97,849          205,374
Cash and cash equivalents at      



                               46



<PAGE>

  beginning of period                  217,374           12,000

Cash and cash equivalents at
end of period                        $ 315,223        $ 217,374
                                     =========        =========

         See notes to consolidated financial statements.














































                               47



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        (in U.S. Dollars)


                                          Contributed
                              Additional      capital            
                      Share      paid-in      surplus    Retained
                    capital      capital      account    earnings        Total
                           
Original issue
Sept 18, 1996       $12,000            -            -           -      $12,000

Net proceeds from
share issuance     171,000$  317,053,950            -           -  317,224,950

Original share
redemption          -12,000            -            -           -      -12,000

Net income                -            -            - $19,479,297   19,479,297

Distribution to
the shareholders          -   -2,066,703            - -19,479,297  -21,546,000

Balance at
Dec 31, 1997       $171,000 $314,987,247            -          -  $315,158,247
Reallocation
share premium             - -314,987,247 $314,987,247           -            -

Net income                -            -            - $17,385,820   17,385,820

Distribution to
the shareholders                       -  -22,970,181 -17,385,820  -40,356,001

Balance at 
Dec 31, 1998       $171,000   $        - $292,017,066   $       - $292,188,066
                   ===========================================================

Distributions per common share 1998 $2.36 (1997 $1.26)



               See notes to consolidated financial statements.










                               48



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1   Description of business

General

Knightsbridge Tankers Limited (the "Company") was incorporated in
Bermuda in September, 1996, for the purpose of the acquisition,
disposition, ownership, leasing and chartering of five very large
crude oil carriers (the "Vessels"), and certain related
activities.  The Vessels are owned through wholly-owned
subsidiaries (the "Subsidiaries"). The Company charters the
Vessels to Shell International Petroleum Company Limited (the
"Charterer") on long-term "hell and high water" bareboat charters
(the "Charters"). The obligations of the Charterer under these
charters are jointly and severally guaranteed by Shell Petroleum
N.V. and The Shell Petroleum Company Limited (the "Charter
Guarantors"). The Charter and the Charter Guarantors are all
companies of the Royal Dutch/Shell Group of Companies. The term
of each of these Charters is a minimum of seven years, with an
option for the Charterer to extend the period for each Vessel's
Charter for an additional seven-year term, to a maximum of
approximately 14 years per Charter. Under the Charters, the
Charterer pays the greater of a base rate of hire or a spot
market related rate.

Ownership and Management of the Company

In February, 1997, the Company offered and sold to the public
16,100,00 common shares, par value $0.01 per share, at an initial
offering price of $20 per share. Simultaneously, the Company sold
1,000,000 common shares at a price of $20 per share to ICB
International Limited ("ICB International"), an indirect wholly-
owned subsidiary of ICB Shipping Aktiebolag (publ) ("ICB"), a
Swedish publicly traded oil tanker owning and operating company.
As of December 31, 1998, ICB International owned approximately
4.7% of the outstanding Common Shares.

ICB Shipping (Bermuda) Limited (the "Manager"), another wholly-
owned subsidiary of ICB, manages the business of the Company.

2   Summary of Significant Accounting Policies

Basis of Presentation - The consolidated financial statements are
prepared in accordance with accounting principles generally
accepted in the United States. They include the accounts of
Knightsbridge Tankers Limited and its wholly-owned subsidiaries.
Significant intercompany items and transactions have been
eliminated upon consolidation.



                               49



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reporting Currency - The consolidated financial statements are
stated in U.S. dollars because the Company receives its revenues
and incurs its expenses in U.S. dollars.

Vessels and Depreciation - Vessels are stated at cost less
accumulated depreciation. Depreciation is calculated based on
cost, using the straight-line method, over the useful life of
each vessel.  The useful life of each vessel is deemed to be 25
years.

Capitalized Financing Fees and Expenses - Costs relating to the
Credit Facility are capitalized and amortized over seven years.

Earnings per Share - Earnings per share are based on the weighted
average number of common shares outstanding for the period
presented. For all periods presented, the Company had no
potentially dilutive securities outstanding and therefore basic
and dilutive earnings per share are the same.

Distribution to Shareholders - Distribution to shareholders is
applied first to retained earnings. When retained earnings are
not sufficient, distribution is applied to contributed capital
surplus account.

3   Capital Leases

In connection with the original Vessels purchase transaction, the
Company entered into a conditional sale/leaseback transaction
with a third party banking institution. The lease agreement does
not incumber or obligate the Company's current or future cash
flows and has no effect on the Company's financial position.

4   The Credit Facility

The Company has entered into the Credit Facility with a syndicate
of international lenders, pursuant to which the Company borrowed
$145.6 million in the form of two term loans (the "Loans", or the
"Primary Loan" and the "Amortizing Loan"). Of such amount, $125.4
million was in respect of the Primary Loan, and $20.2 million was
in respect of the Amortizing Loan.

Aggregate maturities of the Credit Facility subsequent to
December 31, 1998 are as follows:

         1999                          $  6,726,152
         2000                          $  1,681,538
         2004                          $125,397,399



                               50



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Credit Facility is secured by, among other things, a pledge
by the Company of 100% of the issued and outstanding capital
stock of the Subsidiaries, a guarantee from each Subsidiary, a
mortgage on each Vessel, assignments of the Charters and the
Charter Guaranties and an assignment of the Lessor's rights to
take title to the Vessels and the proceeds from the sale or any
novation thereof.

The Credit Facility provides for payment of interest on the
outstanding principal balance of the Loans quarterly, in arrears,
at a floating interest rate based on the rate in the London
interbank eurocurrency market.

The Company has entered into an interest rate swap transaction
with Goldman Sachs Capital Markets, L.P., an affiliate of
Goldman, Sachs & Co., so that it has effectively fixed its
interest rate obligations on the Primary Loan and the Amortizing
Loan at the rate of approximately 7.14% and 6.51%, respectively,
per annum.

The terms of the interest rate swap transaction are as follows:

Notional amount,
  December 31, 1998        $125,397,399              $8,407,690
Trade date             February 6, 1997        February 6, 1997
Effective date        February 27, 1997       February 27, 1997
Termination date        August 27, 2004        January 15, 2000

5   Contributed capital surplus account

At the Company's General Meeting held on March 27, 1998, a
resolution was taken to reallocate Additional Paid-In Capital to
the Contributed Capital Surplus account.

6  Taxation

The Company is incorporated in Bermuda. Under current Bermuda
law, the Company s not subject to tax on income.












                               51



<PAGE>

                  KNIGHTSBRIDGE TANKERS LIMITED
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7  Related Party Transaction

On February 12, 1997, the Company entered into a management
agreement with ICB under which ICB provides certain
administrative, management and advisory services to the Company
for an amount of $750,000 per year. The management agreement will
terminate in 2012 unless earlier termination is approved.

In addition, a fee of $3.5 million was paid by the Company to
ICB, in 1997, on the date of the issuance of the shares in
consideration of certain of ICB's previous activities on behalf
of the Company prior to the consummation of the offering.






































                               52



<PAGE>

Designation
of Exhibit in
this Form 20-F     Description of Exhibit
_______________    ______________________

1                  Underwriting Agreement among Knightsbridge
                   Tankers Limited (the "Company"), Cedarhurst
                   Tankers LDC ("Cedarhurst"), Hewlett Tankers
                   LDC ("Hewlett"), Inwood Tankers LDC
                   ("Inwood"), Lawrence Tankers LDC ("Lawrence")
                   and Woodmere Tankers LDC ("Woodmere") (each of
                   Cedarhurst, Hewlett, Inwood, Lawrence and
                   Woodmere a "Subsidiary" and collectively the
                   "Subsidiaries"), Lazard Freres & Co. LLC and
                   Goldman, Sachs & Co., as representatives for
                   the U.S. underwriters (the "Representatives"),
                   ICB Shipping (Bermuda) Limited (the "Manager")
                   and ICB International Ltd. ("ICB
                   International")**
 
3.1                Memorandum of Association of the Company
                   (Exhibit 3.1)*

3.2                Bye-Laws of the Company (Exhibit 3.2)*

3.2.1              Execution version of Bareboat Charter dated
                   February 12, 1997 between Woodmere and Shell
                   International Petroleum Company Limited
                   ("SIPC") relating to the M.T. Myrina.**

3.2.2              Execution version of Bareboat Charter dated
                   February 12, 1997 between Hewlett and SIPC
                   relating to the M.T. Megara.**

3.2.3              Execution version of Bareboat Charter dated
                   February 12, 1997 between Inwood and SIPC
                   relating to the M.T. Murex.**

3.2.4              Execution version of Bareboat Charter dated
                   February 12, 1997 between Lawrence and SIPC
                   relating to the M.T. Macoma.**

3.2.5              Execution version of Bareboat Charter dated
                   February 12, 1997 between Cedarhurst and SIPC
                   relating to the M.T. Magdala.**

3.3.1              Execution version of Charter Guaranty dated
                   February 12, 1997 made by Shell Petroleum N.V.
                   ("SPNV") and The Shell Petroleum Company
                   Limited ("SPCo") (collectively the



                               53



<PAGE>

                   "Guarantors") in favor of Woodmere relating to
                   the M.T. Myrina.**

3.3.2              Execution version of Charter Guaranty dated
                   February 12, 1997 made by the Guarantors in
                   favor of Hewlett relating to the M.T.
                   Megara.**

3.3.3              Execution version of Charter Guaranty dated
                   February 12, 1997 made by the Guarantors in
                   favor of Inwood relating to the M.T. Murex.**

3.3.4              Execution version of Charter Guaranty dated
                   February 12, 1997 made by the Guarantors in
                   favor of Lawrence relating to the M.T.
                   Macoma.**

3.3.5              Execution version of Charter Guaranty dated
                   February 12, 1997 made by the Guarantors in
                   favor of Cedarhurst relating to the M.T.
                   Magdala.**

3.3.6              Execution version of Pooling Agreement dated
                   February 27, 1997 among the Subsidiaries as
                   owners, and Shell International Trading and
                   Shipping Company Limited on behalf of SIPC
                   (collectively the "Charterers") relating to
                   the fleet spares.**

3.4                Execution version of Charter Guaranty dated
                   February 12, 1997 made by the Guarantors in
                   favor of the Company.**

3.5                Execution version of Management Agreement
                   dated February 12, 1997 between the Manager
                   and the Company (incorporated by reference
                   from Exhibit 10.5 of the Registration
                   Statement).**

3.6.1              Memorandum of Agreement dated October 24, 1996
                   among Ocala Shipping Limited ("Ocala"), the
                   Charterers and Shell Tankers (UK) Limited
                   ("STUK"), as buyer, relating to the M.T.
                   Myrina (incorporated by reference from
                   Exhibit 10.6 of the Registration Statement).**

3.6.2              Memorandum of Agreement dated October 24, 1996
                   among Kerbela Shipping Corp. ("Kerbela") the
                   Charterers and STUK relating to the M.T.
                   Megara (incorporated by reference from
                   Exhibit 10.7 of the Registration Statement).**


                               54



<PAGE>

3.6.3              Memorandum of Agreement dated October 24, 1996
                   among Trevose Shipping Corp. ("Trevose"), the
                   Charterers and STUK relating to the M.T. Murex
                   (incorporated by reference from Exhibit 10.8
                   of the Registration Statement).**

3.6.4              Memorandum of Agreement dated October 24, 1996
                   among Tourmaline Shipping Limited
                   ("Tourmaline"), the Charterers and STUK
                   relating to the M.T. Macoma (incorporated by
                   reference from Exhibit 10.9 of the
                   Registration Statement).**

3.6.5              Memorandum of Agreement dated October 24, 1996
                   among Fluid Navigation Ltd. ("Fluid"), the
                   Charterers and STUK relating to the M.T.
                   Magdala (incorporated by reference from
                   Exhibit 10.10 of the Registration
                   Statement).**

3.7.1              Assignment Agreement dated November 25, 1996
                   from STUK and Shell International Trading &
                   Shipping Company Limited to the Company and
                   the Subsidiaries relating to the relevant
                   Memorandum of Agreement (incorporated by
                   reference from Exhibit 10.11 of the
                   Registration Statement).**

3.7.2              Assignment of Rights dated February 27, 1997
                   between Ocala  as seller and Woodmere as buyer
                   relating to the M.T. Myrina.**

3.7.3              Assignment of Rights dated February 27, 1997
                   between Kerbela  as seller and Hewlett as
                   buyer regarding the M.T. Megara.**

3.7.4              Assignment of Rights dated February 27, 1997
                   between Trevose  as seller and Inwood as buyer
                   regarding the M.T. Murex.**

3.7.5              Assignment of Rights dated February 27, 1997
                   between Tourmalene  as seller and Lawrence as
                   buyer regarding the M.T. Macoma.**

3.7.6              Assignment of Rights dated February 27, 1997
                   between Fluid  as seller and Cedarhurst as
                   buyer regarding the M.T. Magdala.**

3.8.1              Execution version of Letter Agreement dated
                   February 6, 1997 among the Company, SIPC, ICB
                   International, the Subsidiaries and the


                               55



<PAGE>

                   Manager (incorporated by reference from
                   Exhibit 10.12.1 of the Registration
                   Statement).**

3.8.2              Execution version of Letter Agreement dated
                   February 6, 1997 among the Company, the
                   Manager, ICB International, SIPC and the
                   Guarantors (incorporated by reference from
                   Exhibit 10.12.2 of the Registration
                   Statement).**

3.9                U.K. Finance Lease Transaction Offer Letter
                   dated November 12, 1996 made by National
                   Westminster Bank Plc in favor of the Company
                   and SIPC (incorporated by reference from
                   Exhibit 10.13 of the Registration
                   Statement).**

3.10.1             Conditional Sale Agreement dated November 25,
                   1996 between NatWest Leasing (GB) Limited
                   ("NLL") and Woodmere relating to the M.T.
                   Myrina (incorporated by reference from
                   Exhibit 10.14 of the Registration
                   Statement).**

3.10.2             Conditional Sale Agreement dated November 25,
                   1996 between NLL and Hewlett relating to the
                   M.T. Megara (incorporated by reference from
                   Exhibit 10.15 of the Registration
                   Statement).**

3.10.3             Conditional Sale Agreement dated November 25,
                   1996 between NLL and Inwood relating to the
                   M.T. Murex (incorporated by reference from
                   Exhibit 10.16 of the Registration
                   Statement).**

3.10.4             Conditional Sale Agreement dated November 25,
                   1996 between NLL and Lawrence relating to the
                   M.T. Macoma (incorporated by reference from
                   Exhibit 10.17 of the Registration
                   Statement).**

3.10.5             Conditional Sale Agreement dated November 25,
                   1996 between NLL and Cedarhurst relating to
                   the M.T. Magdala (incorporated by reference
                   from Exhibit 10.18 of the Registration
                   Statement).**

3.11.1             Execution version of Charterparty by way of
                   Demise dated February 12, 1997 between NLL as


                               56



<PAGE>

                   lessor and Woodmere as leasee relating to the
                   M.T. Myrina.**

3.11.2             Execution version of Charterparty by Way of
                   Demise dated February 12, 1997 between NLL as
                   lessor and Hewlett as leasee relating to the
                   M.T. Megara.**

3.11.3             Execution version of Charterparty by Way of
                   Demise dated February 12, 1997 between NLL as
                   lessor and Inwood as leasee relating to the
                   M.T. Murex.**

3.11.3(a)          Amendment Agreement to the Charterparty by Way
                   of Demise dated February 27, 1997 among NLL,
                   Inwood and SIPC.**

3.11.4             Execution version of Charterparty by Way of
                   Demise dated February 12, 1997 between NLL as
                   lessor and Lawrence as leasee relating to the
                   M.T. Macoma.**

3.11.5             Execution version of Charterparty by Way of
                   Demise dated February 12, 1997 between NLL as
                   lessor and Cedarhurst as leasee relating to
                   the M.T. Magdala.**

3.12.1             Execution version of Direct Support Agreement
                   dated February 12, 1997 among NLL as lessor,
                   SIPC and Woodmere as leasee.**

3.12.2             Execution version of Direct Support Agreement
                   dated February 12, 1997 among NLL as lessor,
                   SIPC and Hewlett as leasee.**

3.12.3             Execution version of Direct Support Agreement
                   dated February 12, 1997 among NLL as lessor,
                   SIPC and Inwood as leasee.**

3.12.4             Execution version of Direct Support Agreement
                   dated February 12, 1997 among NLL as lessor,
                   SIPC and Lawrence as leasee.**

3.12.5             Execution version of Direct Support Agreement
                   dated February 12, 1997 among NLL as lessor,
                   SIPC and Cedarhurst as leasee.**

3.13               Execution version of Lessor Direct Agreement
                   dated February 12, 1997 among the Company as
                   borrower, the Subsidiaries as leasees, NLL as
                   lessor and GSI.**


                               57



<PAGE>

3.13(a)            Amendment Agreement to the Lessor Direct
                   Agreement dated February 27, 1997 among the
                   Company as borrower, the Subsidiaries as
                   leasees, NLL as lessor and Royal Bank of
                   Scotland Plc ("RBS") as agent.**

3.14.1             Execution version of Lessor Mortgage and
                   Assignment dated February 12, 1997 from NLL as
                   chargor to Woodmere as chargee.**

3.14.2             Execution version of Lessor Mortgage and
                   Assignment dated February 12, 1997 from NLL as
                   chargor to Hewlett as chargee.**

3.14.3             Execution version of Lessor Mortgage and
                   Assignment dated February 12, 1997 from NLL as
                   chargor to Inwood as chargee.**

3.14.4             Execution version of Lessor Mortgage and
                   Assignment dated February 12, 1997 from NLL as
                   chargor to Lawrence as chargee.**

3.14.5             Execution version of Lessor Mortgage and
                   Assignment dated February 12, 1997 from NLL as
                   chargor to Cedarhurst as chargee.**

3.15.1             Execution version of Deposit Agreement and
                   Deposit Charge dated February 12, 1997 between
                   Woodmere as leasee and Midland Bank PLC as a
                   letter of credit issuing bank ("Midland").**

3.15.2             Execution version of Deposit Agreement and
                   Deposit Charge dated February 12, 1997 between
                   Hewlett as leasee and Midland.**

3.15.3             Execution version of Deposit Agreement and
                   Deposit Charge dated February 12, 1997 between
                   Inwood as leasee and Royal Bank of Canada
                   Europe Limited as a letter of credit issuing
                   bank ("RBC").**

3.15.4             Execution version of Deposit Agreement and
                   Deposit Charge dated February 12, 1997 between
                   Lawrence as leasee and National Australia Bank
                   Limited as a letter of credit issuing bank
                   ("NAB").**

3.15.5             Execution version of Deposit Agreement and
                   Deposit Charge dated February 12, 1997 between
                   Cedarhurst as leasee and NAB.**



                               58



<PAGE>

3.16.1             Execution version of Irrevocable Standby
                   Letter of Credit by Midland in favor of
                   Woodmere as leasee.**

3.16.2             Execution version of Irrevocable Standby
                   Letter of Credit by Midland in favor of
                   Hewlett as leasee.**

3.16.3             Execution version of Irrevocable Standby
                   Letter of Credit by RBC in favor of Inwood as
                   leasee.**

3.16.4             Execution version of Irrevocable Standby
                   Letter of Credit by NAB in favor of Lawrence
                   as leasee.**

3.16.5             Execution version of Irrevocable Standby
                   Letter of Credit by NAB in favor of Cedarhurst
                   as leasee.**

3.17.1             Execution version of Reimbursement Agreement
                   dated February 12, 1997 between Woodmere as
                   leasee and Midland.**

3.17.2             Execution version of Reimbursement Agreement
                   dated February 12, 1997 between Hewlett as
                   leasee and Midland.**

3.17.3             Execution version of Reimbursement Agreement
                   dated February 12, 1997 between Inwood as
                   leasee and RBC.**

                   3.17.4Execution version of Reimbursement
                   Agreement dated February 12, 1997 between
                   Lawrence as leasee and NAB.**

3.17.5             Execution version of Reimbursement Agreement
                   dated February 12, 1997 between Cedarhurst as
                   leasee and NAB.**

3.18.1             Execution version of Residual Obligation
                   Agreement dated February 12, 1997 between SIPC
                   as obligor and Midland relating to Woodmere as
                   lessee.**

3.18.2             Execution version of Residual Obligation
                   Agreement dated February 12, 1997 between SIPC
                   as obligor and Midland relating to Hewlett as
                   lessee.**




                               59



<PAGE>

3.18.3             Execution version of Residual Obligation
                   Agreement dated February 12, 1997 between SIPC
                   as obligor and RBC relating to Inwood as
                   lessee.**

3.18.4             Execution version of Residual Obligation
                   Agreement dated February 12, 1997 between SIPC
                   as obligor and NAB relating to Lawrence as
                   lessee.**

3.18.5             Execution version of Residual Obligation
                   Agreement dated February 12, 1997 between SIPC
                   as obligor and NAB relating to Cedarhurst as
                   lessee.**

3.19               Execution version of Term Loan Facility
                   Agreement dated February 6, 1997 among the
                   Company as borrower, the Subsidiaries as
                   guarantors, GSI as arranger and as agent,
                   Goldman Sachs Capital Partners L.P. as bank
                   ("GSCP") and Goldman Sachs Capital Markets
                   L.P. as swap counterparty ("GSCM").**

3.19(a)            Amendment Agreement to Term Loan Facility
                   Agreement dated February 27, 1997 among the
                   Company as borrower, the Subsidiaries as
                   guarantors, GSI as arranger and retiring
                   agent, Goldman Sachs International Bank as
                   bank ("GSIB"), GSCM as swap counterparty and
                   RBS as successor agent.**

3.19(b)            Side Letter to the Term Loan Facility
                   Agreement dated February 27, 1997 among the
                   Company, the Subsidiaries, SIPC, NLL and
                   GSI.**

3.20.1             Vessel Mortgage dated February 27, 1997
                   granted by Woodmere in favor of GSI relating
                   to the M.T. Myrina.**

3.20.2             Vessel Mortgage dated February 27, 1997
                   granted by Hewlett in favor of GSI relating to
                   the M.T. Megara.**

3.20.3             Vessel Mortgage dated February 27, 1997
                   granted by Inwood in favor of GSI relating to
                   the M.T. Murex.**

3.20.4             Vessel Mortgage dated February 27, 1997
                   granted by Lawrence in favor of GSI relating
                   to the M.T. Macoma.**


                               60



<PAGE>

3.20.5             Vessel Mortgage dated February 27, 1997
                   granted by Cedarhurst in favor of GSI relating
                   to the M.T. Magdala.**

3.21.1             Execution version of Floating Charge dated
                   February 12, 1997 between Woodmere as chargor
                   and GSI as agent.**

3.21.2             Execution version of Floating Charge dated
                   February 12, 1997 between Hewlett as chargor
                   and GSI as agent.**

3.21.3             Execution version of Floating Charge dated
                   February 12, 1997 between Inwood as chargor
                   and GSI as agent.**

3.21.4             Execution version of Floating Charge dated
                   February 12, 1997 between Lawrence as chargor
                   and GSI as agent.**

3.21.5             Execution version of Floating Charge dated
                   February 12, 1997 between Cedarhurst as
                   chargor and GSI as agent.**

3.22               Execution version of Floating Charge dated
                   February 12, 1997 between the Company as
                   chargor and GSI as agent.**

3.23               Execution version of Mortgage of Shares dated
                   February 12, 1997 between the Company as
                   chargor and GSI as agent.**

3.24               Execution version of Borrower Assignment dated
                   February 12, 1997 between the Company as
                   assignor and GSI as agent.**

3.25.1             Execution version of Guarantor (Subsidiary)
                   Assignment dated February 12, 1997 between
                   Woodmere as assignor and GSI as agent.**

3.25.2             Execution version of Guarantor (Subsidiary)
                   Assignment dated February 12, 1997 between
                   Hewlett as assignor and GSI as agent.**

3.25.3             Execution version of Guarantor (Subsidiary)
                   Assignment dated February 12, 1997 between
                   Inwood as assignor and GSI as agent.**

3.25.4             Execution version of Guarantor (Subsidiary)
                   Assignment dated February 12, 1997 between
                   Lawrence as assignor and GSI as agent.**


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<PAGE>

3.25.5             Execution version of Guarantor (Subsidiary)
                   Assignment dated February 12, 1997 between
                   Cedarhurst as assignor and GSI as agent.**

3.26               Execution version of ISDA Master Agreement
                   dated February 6, 1997 between GSCM and the
                   Company.**

3.27               Execution version of Intercreditor Agreement
                   dated February 12, 1997 among the Company as
                   borrower, the Subsidiaries as leasees
                   (collectively with the Company as Obligors),
                   GSI as arranger and as agent, GSCP as bank and
                   GSCM as swap bank and SIPC, SPCo, SPNV and the
                   Manager, each as a subordinated creditor.**

3.27(a)            Amendment Agreement dated February 27, 1997 to
                   the Intercreditor Agreement among the Company
                   as borrower, the Subsidiaries as leasees
                   (collectively with the Company as Obligors),
                   GSI as arranger, RBS as agent, GSIB as bank,
                   GSCM as swap bank and SIPC, SPCo, SPNV and the
                   Manager, each as a subordinated creditor.**

3.27(b)            Finance Party Accession/Designation Agreement
                   dated February 27, 1997 among the Company and
                   the Subsidiaries as obligors, GSI as existing
                   party and arranger, RBS as new party, NLL as
                   lessor, GSIB as bank, GSCM as swap bank and
                   SIPC, SPCo, SPNV and the Manager, each as a
                   subordinated creditor.**

3.28               Execution version of Multipartite Agreement
                   dated February 12, 1997 among the Company as
                   borrower, the Subsidiaries as guarantors, SIPC
                   as charterer, GSI as arranger and agent, GSCP
                   as bank and GSCM as swap bank.**

3.29               Execution version of Subordination Agreement
                   dated February 12, 1997 among the Company, the
                   Subsidiaries, ICB International, the Manager,
                   the Guarantors, SIPC and Goldman, Sachs & Co.
                   as representative of the U.S. Underwriters,
                   and GSI as representative of the International
                   Underwriters.**

3.30               Execution version of Share Purchase Agreement
                   dated February 12, 1997 between the Company
                   and ICB International (incorporated by
                   reference from Exhibit 10.37 of the Company's



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<PAGE>

                   Registration Statement on Form F-1, filed
                   December 13, 1996 (File No. 333-6170).

                   
*  Incorporated by reference to same Exhibit No. in the Company's
Registration Statement on Form F-1, filed December 13, 1996 (File
No. 333-6170)
**Incorporated by reference to same Exhibit No. in the Company's
Report on Form 6-K, filed March 20, 1997 (File No. 0-29106)












































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<PAGE>

                           SIGNATURES

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

                                 KNIGHTSBRIDGE TANKERS
                                   LIMITED


                                 By:  /s/Ola Lorentzon     
                                 _____________________
                                 Ola Lorentzon
                                 Deputy Chairman and Treasurer



Dated:  March 12, 1999

































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01655002.AG2