Exhibit
10.2

    


    
      

      
        

      

    

     

    
      	 
      	
              666
      Third Avenue

              New
      York, NY 10017

            	
              Tel:  212
      953 4100

            	
              www.osg.com

            


    

    


    9/11/2006

    


    Mr. Ian
Blackley

    9 Castle
Road

    Chappaqua,
NY  10514

    


    Dear
Ian:

    


    We are
pleased to confirm your offer as managing Director & Chief Operating Officer
– OSG Ship Management (UK) Ltd., effective September 1, 2005.  The
relevant components of this offer are as follows:

    


    1.      Title and
Position.  You will be
Managing Director & Chief Operating Officer – OSG Ship Management (UK) Ltd.,
(“OSGUK”).  You will manage OSGUK (and all its subsidiaries) with
principal responsibility for the technical operation of all vessels managed by
OSGUK – currently OSG’s crude oil fleet and LNG fleet.  In this
position, you will report directly to the Global Head of Shipping
Operations.  You will continue to be based out of the New York office
and on secondment in Newcastle for the duration of this
assignment.  You will be located in Newcastle and will devote
substantially all of your business time and reasonable best efforts to the
performance of your duties and shall discharge your duties diligently,
faithfully and in the best interests of the Company.

     

    2.      Compensation
and Benefits.   The Company
will pay you a base salary at the rate of $375,000 (“Base Salary”) per year and
you will be eligible for bonuses in accordance with our bonus plans which, for
2005, will be pro rated for the portion of the year you are employed in this new
position.  You will continue to be paid out of this office and
effectively carry forward your existing benefits and programs for which you are
currently eligible.  The company will meet expenses of required
filings including tax filings, and legal and tax advice that are incurred with
this assignment.

    


    3.      Tax
Equalization.   During your
assignment you will be eligible for tax equalization.  The objective
of the company’s Tax Equalization Program is to ensure that you neither gain nor
lose as a result of your foreign assignment.  The program ensures that
your total taxes will be approximately the same during your foreign assignment
as they would have been had employment continued here in the US.

    During
the year OSG will withhold a hypothetical tax which is an estimate of your US
Federal and State tax liability on your company and personal
income.  This calculation will be done prior to the start of your
international assignment and will be adjusted during your international
assignment if there is a change in your hypothetical tax.  Note,
hypothetical tax withheld by OSG will be used for payment of actual taxes [or
application towards additional costs relating to your overseas
assignment].


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      
      

    

    
      

      
        

      

    

    
 

    
      	 
      	
              666
      Third Avenue

              New
      York, NY 10017

            	
              Tel:  212
      953 4100

            	
              www.osg.com

            


    

    


    At each
year-end, after your US tax returns have been finalized, the final hypothetical
tax liability will be computed.  This tax equalization calculation is
based on applicable Federal and State tax laws in force during the period for
which the calculation is being made.  The final hypothetical tax will
be compared to the amounts withheld during the year.  A settlement
between you and the Company will be made at that time.

    


    4.      Moving
Expenses.  In recognition of
this move to Newcastle and the various expenses that may be incurred, you will
be given a lump sum payment of $40,000.  Upon completion of this
assignment, the company will meet all reasonable moving expenses for your return
to the US.  This provision will not apply in the event of your
voluntary resignation from the company.

    


    5.      Termination.   If your
employment with the Company terminates as a result of your resignation the
Company will pay (i) any Base Salary earned but not yet paid, (ii) any accrued
vacation pay, (iii) any bonus for any prior completed year earned to the extent
provided under the terms of the applicable plan or program but not yet paid, and
(iv) any amounts due under any other plan of the Company applicable to
you.  You will not be entitled to any other amounts.

    


    Once you
have accepted this offer by signing this letter, please return a copy to
me.

    


    
      
        	 
      	
                /s/Robert
      Johnston

              
	 
      	
                Robert
      Johnston

              
	 
      	 
      
	 
      	
                Sr.
      Vice President and Chief Commercial Officer

              
	 
      	 
      
	
                Agreed
      & Accepted:

              	 
      
	 
      	 
      
	
                /s/Ian
      Blackley

              	 
      
	
                Ian
      Blackley

              	 
      


      

    

     

    
      
         


      

      
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