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, 2006
                          ------------------------------------------------------

                                       OR

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

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

Date of event requiring this shell company report
                                                   -----------------------------

Commission file number               033-79220-04
                      ----------------------------------------------------------

                         CALPETRO TANKERS (IOM) LIMITED
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

                                   Isle of Man
--------------------------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                15-19 Athol Street, Douglas, Isle of Man IM1 1LB
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

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

    Title of each class                Name of each exchange on which registered

        None                                        Not applicable
--------------------------              ----------------------------------------

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

                                      None
--------------------------------------------------------------------------------

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

                                      None
--------------------------------------------------------------------------------

Indicate the number of shares outstanding of each of the registrant's classes of
capital or common stock, as of the close of the period covered by the annual
report.

               Common stock: 100 shares, par value of $1 per share
--------------------------------------------------------------------------------

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.
                                                               [_] Yes    [X] No

If this report is an annual or transition report,  indicate by check mark if the
registrant  is not required to file  reports  pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.                           [_] Yes    [X] No

Note - Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.                             [X] Yes    [_] No

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

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

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

                                                         [_] Item 17 [X] Item 18

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

                                                               [_] Yes    [X] No
<PAGE>


                          INDEX TO REPORT ON FORM 20-F

                                                                           Page
PART I
Item 1.    Identity of Directors, Senior Management and Advisers.............3
Item 2.    Offer Statistics and Expected Timetable...........................3
Item 3.    Key Information...................................................3
Item 4.    Information on the Company........................................7
Item 4A.   Unresolved Staff Comments........................................21
Item 5.    Operating and Financial Review and Prospects.....................21
Item 6.    Directors, Senior Management and Employees.......................25
Item 7.    Major Shareholders and Related Party Transactions................26
Item 8.    Financial Information............................................26
Item 9.    The Offer and Listing............................................27
Item 10.   Additional Information...........................................27
Item 11.   Quantitative and Qualitative Disclosures about Market Risk.......29
Item 12.   Description of Securities Other than Equity Securities...........29

PART II
Item 13.   Defaults, Dividend Arrearages and Delinquencies..................30
Item 14.   Material Modifications to the Rights of Security Holders
           and Use of Proceeds..............................................30
Item 15.   Controls and Procedures..........................................30
Item 16.   Reserved.........................................................30
Item 16A.  Audit committee financial expert.................................30
Item 16B.  Code of Ethics...................................................30
Item 16C.  Principal Accountant Fees and Services...........................30
Item 16D.  Exemptions from the Listing Rules for Audit Committees...........31
Item 16E.  Purchases of Equity Securities by the Issuer and
           Affiliated Purchasers............................................31

PART III
Item 17.   Financial Statements.............................................32
Item 18.   Financial Statements.............................................32
Item 19.   Exhibits.........................................................32
<PAGE>

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

Please note: In this section, "we", "us" and "our" all refer to the Company.
<PAGE>


                                     PART I

Item 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3.  KEY INFORMATION

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

A. Selected Financial Data

The  selected  Statement of  operations  data of the Company with respect to the
fiscal years ended December 31, 2006,  2005, and 2004, and the selected  balance
sheet data at December 31, 2006 and 2005,  have been derived from the  Company's
audited financial  statements  included herein and should be read in conjunction
with such statements and the notes thereto. The selected statement of operations
and retained earnings data with respect to the years ended December 31, 2003 and
2002 and the selected  balance  sheet data at December  31, 2004,  2003 and 2002
have been derived from audited financial  statements of the Company not included
herein.  The  following  table  should also be read in  conjunction  with Item 5
"Operating  and  Financial  Review  and  Prospects"  and the  Company's  audited
financial  statements and notes thereto included herein.  The Company's accounts
are maintained in U.S. dollars.
<table>
<caption>

                                                     Fiscal Years ended December 31,
                                             2006      2005      2004      2003     2002
(in thousands of $, except share data)
<S>                                        <C>       <C>       <C>       <C>      <C>
 Statement of operations data
 Total operating revenues                   2,378     2,657     3,068     3,500    3,929
 Net (loss) / income                         (47)     (107)      (53)      (37)       70

 Per share data:
 Dividends per share                            -         -         -         -        -

 Balance sheet data:
 Total assets                              28,869    31,946    37,364    42,734   48,049
 Current portion loans                      2,984     2,984     5,210     5,210    5,210
 Long-term loans                           23,874    26,858    29,842    35,052   40,262
 Stockholder's equity                       1,394     1,441     1,548     1,601    1,638
 Number of shares                               2         2         2         2        2
</table>

B. Capitalization and Indebtedness

Not Applicable

C. Reason for the offer and use of proceeds

Not Applicable

D. Risk Factors

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

Our vessel the Sirius  Voyager  (the  "Vessel") is  currently  operated  under a
bareboat charter (the "Charter") to Chevron Transport  Corporation  ("Chevron").
The Charter has a term expiring on April 1, 2015,  subject to Chevron's  options
to terminate the charter on April 1, 2009 and April 1, 2011.  Non-binding notice
of the  intention to exercise the option to terminate  the Charter must be given
at least seven months in advance. As at June 18, 2007, no termination notice had
been  received  from  Chevron  for the  Charter in relation to the April 1, 2009
termination date.

If the tanker industry, which has been cyclical, is depressed in the future when
our Vessel's  Charter expires or is terminated,  our earnings and available cash
flow may  decrease.  Our ability to recharter  our Vessel on the  expiration  or
termination  of its  current  Charter and the charter  rates  payable  under any
renewal or replacement  charters will depend upon, among other things,  economic
conditions in the tanker market. Fluctuations in charter rates and vessel values
result from changes in the supply and demand for tanker  capacity and changes in
the supply and demand for oil and oil products.

Because our Charter may be terminated,  we may incur additional expenses and not
be able to recharter our Vessel profitably

Chevron has the sole discretion to exercise its options to terminate the charter
and will  not owe any  fiduciary  or other  duty to the  holders  of the  Notes,
defined below,  in deciding  whether to exercise the  termination  options,  and
Chevron's  decision may be contrary to our  interests or those of the holders of
the Notes, defined below.

We cannot  predict at this time any of the factors that Chevron will consider in
deciding whether to exercise its final termination option under the Charter.  It
is likely,  however, that Chevron would consider a variety of factors, which may
include  whether a vessel is surplus or suitable to Chevron's  requirements  and
whether  competitive  charterhire rates are available in the open market at that
time.

In the event Chevron does terminate the Charter,  it is required under the terms
of  the  Charter  to  make  a  termination  payment  to us.  The  amount  of the
termination  payment is not expected to be sufficient  to cover our  obligations
under the Term Loans,  defined below. If Chevron terminates the Charter, we will
attempt to arrange a replacement  charter,  or we may sell the Vessel to satisfy
our  obligations  under  the  term  loans.   Replacement  charters  may  include
shorter-term  time charters and employing the Vessel on the spot charter  market
(which is subject to greater  fluctuation  than the time  charter  market).  Any
replacement charter may bring us lower charter rates and would likely require us
to incur greater expenses which may reduce the amounts available, if any, to pay
principal and interest on the Term Loans, defined below.

We operate in the highly  competitive  international  tanker  market which could
affect our position at the end of our current Charter and if Chevron  terminates
its Charter earlier

The  operation  of tanker  vessels  and  transportation  of crude and  petroleum
products is an extremely competitive  business.  During the term of the existing
Charters with the  charterers,  we are not exposed to the risk  associated  with
this competition. At the end of the current Charter or in the event that Chevron
terminate  the  Charter  on the  remaining  termination  dates,  we will have to
compete  with other  tanker  owners,  including  major oil  companies as well as
independent tanker companies for charters.  Due in part to the fragmented tanker
market, competitors with greater resources could enter and operate larger fleets
through  acquisitions or  consolidations  and may be able to offer better prices
and fleets, which could result in us achieving lower revenues from their suezmax
oil  tankers  which  will  reduce  the  amounts  available,  if any,  to pay the
principal and interest on the Term Loans.

Safety, environmental and other governmental and other requirements expose us to
liability,  and  compliance  with current and future  regulations  could require
significant additional expenditures,  which could have a material adverse affect
on our business and financial results.

Our operations are affected by extensive and changing  international,  national,
state and local laws, regulations,  treaties, conventions and standards in force
in international  waters, the jurisdictions in which our Vessel operates and the
country  in which our  vessel  is  registered,  including  those  governing  the
management and disposal of hazardous  substances and wastes,  the cleanup of oil
spills and other contamination,  air emissions, and water discharges and ballast
water  management.  In addition,  vessel  classification  societies  also impose
significant  safety and other  requirements  on our vessel.  In  complying  with
current and future  environmental  requirements,  we may also incur  significant
additional  costs in meeting new  maintenance  and inspection  requirements,  in
developing  contingency  arrangements  for  potential  spills  and in  obtaining
insurance coverage.  Government regulation of vessels, particularly in the areas
of safety and environmental requirements,  can be expected to become stricter in
the  future and  require us to incur  significant  capital  expenditures  on our
vessel to keep it in compliance, or even to scrap or sell the vessel altogether.

Many of these  requirements  are  designed  to reduce the risk of oil spills and
other pollution, and our compliance with these requirements can be costly. These
requirements  also can affect the resale  value or useful  lives of our  vessel,
require a reduction in cargo-capacity, ship modifications or operational changes
or  restrictions,  lead to  decreased  availability  of  insurance  coverage for
environmental   matters   or  result  in  the   denial  of  access  to   certain
jurisdictional waters or ports, or detention in, certain ports.

Under local,  national and foreign laws, as well as  international  treaties and
conventions, we could incur material liabilities, including cleanup obligations,
natural resource damages and third-party  claims for personal injury or property
damages,  in the event that there is a release of petroleum  or other  hazardous
substances  from our  vessel or  otherwise  in  connection  with our  current or
historic operations. We could also incur substantial penalties,  fines and other
civil or criminal sanctions, including in certain instances seizure or detention
of our vessel, as a result of violations of or liabilities  under  environmental
laws, regulations and other requirements.

For example,  OPA affects all vessel owners  shipping oil to, from or within the
United States. OPA allows for potentially  unlimited liability without regard to
fault for owners, operators and bareboat charterers of vessels for oil pollution
in United  States  waters.  Similarly,  the  International  Convention  on Civil
Liability for Oil Pollution Damage, 1969, as amended,  which has been adopted by
most countries outside of the United States. imposes liability for oil pollution
in international waters. OPA expressly permits individual states to impose their
own  liability  regimes with regard to  hazardous  materials  and oil  pollution
incidents occurring within their boundaries. Coastal states in the United States
have enacted  pollution  prevention  liability and response laws, many providing
for unlimited liability.

Compliance with extensive and changing  environmental laws and other regulations
may entail  significant  expenses  including expenses for ship modifications and
changes in  operating  procedures  and  therefore  affect the  operation  of the
Vessel. Although Chevron is responsible for all operational matters and bear all
these expenses during the term of the current Charter, these expenses could have
an adverse effect on our business operations at any time after the expiration or
termination  of the  Charter or in the event  Chevron  fails to make a necessary
payment.

We may not  have  adequate  insurance  in the  event  the  existing  charter  is
terminated

There  are a  number  of risks  associated  with the  operation  of  ocean-going
vessels, including mechanical failure,  collision,  property loss, cargo loss or
damage and  business  interruption  due to  political  circumstances  in foreign
countries,  hostilities  and labour 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. Under the Charter,  Chevron bears
all risks  associated with the operation of our Vessel  including the total loss
of the Vessel.  However,  we cannot  assure  holders of the Term Loans,  defined
below,  that we will  adequately  insure  against  all risks or in the event the
Charter  expires  or is  terminated.  We may  not be  able  to  obtain  adequate
insurance  coverage  at  reasonable  rates for our  Vessel in the future and the
insurers may not pay particular claims.

We are highly dependent on Chevron and Chevron Corporation

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

We may not be able to pay down our debt in the future

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

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

A government  could  requisition for title or seize our Vessel.  Requisition for
title occurs when a government  takes control of a vessel and becomes her owner.
Also, a government could  requisition our Vessel for hire.  Requisition for hire
occurs when a government  takes control of a vessel and effectively  becomes her
charterer at dictated  charter  rates.  Generally,  requisitions  occur during a
period  of  war  or  emergency.  Government  requisition  of  our  Vessel  would
negatively  impact our revenues and therefore  impact our ability to service our
debt.

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

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

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

We are highly leveraged.  As of December 31, 2006, we had $26.9 million in total
indebtedness outstanding and stockholders' equity of $1.4 million. The degree to
which we are leveraged could have important  consequences for the holders of the
Notes, including:

     o    our  ability  to obtain  additional  financing  for  working  capital,
          capital  expenditures,  acquisitions or general corporate purposes may
          be limited;

     o    we  must  dedicate  a  substantial  portion  of  our  cash  flow  from
          operations to the payment of interest on our Term Loans and any future
          indebtedness,  which  reduces  the  funds  available  to us for  other
          purposes;

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

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

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

We have a limited business purpose which limits our flexibility

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

Item 4.  INFORMATION ON THE COMPANY

A  History and Development of the Company

CalPetro  Tankers (IOM) Limited was  incorporated  in the Isle of Man on May 13,
1994. together with three other companies: CalPetro Tankers (Bahamas I) Limited,
CalPetro  Tankers  (Bahamas  II)  Limited and  CalPetro  Tankers  (Bahamas  III)
Limited, each of which was incorporated in the Bahamas. Together these companies
are referred to as the  "Owners".  Each of the Owners was organized as a special
purpose  company for the purpose of  acquiring  one of four oil tankers  (each a
"Vessel",   together  the  "Vessels")  from  Chevron.  We  are  wholly-owned  by
California  Tankers  Investments  Limited, a company organized under the laws of
the Bahamas,  which is in turn a  wholly-owned  subsidiary of CalPetro  Holdings
Limited,  an Isle of Man company.  CalPetro  Holdings  Limited is a wholly-owned
subsidiary of Independent Tankers Corporation  ("ITC"), a Cayman Islands company
which is a wholly-owned subsidiary of Frontline Ltd.  ("Frontline"),  a publicly
listed Bermuda company.

California Petroleum Transport Corporation ("California Petroleum"),  a Delaware
corporation,  acting as agent on behalf of the Owners,  issued as full  recourse
obligations  $167,500,000 Serial First Preferred Mortgage Notes and $117,900,000
8.52% First  Preferred  Mortgage  Notes due 2015  (together  the  "Notes").  The
proceeds  from the sale of the Notes  were  applied by way of  long-term  loans,
being Serial Loans in respect of the Serial First  Preferred  Mortgage Notes and
Term Loans in respect of the First  Preferred  Mortgage  Notes due 2015,  to the
Owners to fund the  acquisition  of the Vessels from Chevron.  We were allocated
$51,830,000  of the Serial Loans and  $29,842,000 of the Term Loans and acquired
our Vessel,  the Sirius  Voyager,  as described  below. We engage in no business
other than the ownership and chartering of our Vessel and  activities  resulting
from or incidental to such ownership and chartering.

Our principal executive offices are located at 15-19 Athol Street, Douglas, Isle
of Man IM1 1LB.

B  Business Overview

Our Vessel is a 150,000 dwt Suezmax oil tanker, called the Sirius Voyager, which
was acquired from Chevron. Suezmax tankers are medium-sized vessels ranging from
approximately  120,000 to 200,000 dwt, and of maximum length,  breadth and draft
capable of passing fully loaded through the Suez Canal.

The Vessel has been chartered  back to Chevron.  The Charter has a term expiring
on April 1, 2015,  subject to Chevron's  rights to terminate the Initial Charter
on April 1,  2009  and  April 1,  2011.  For this  optional  termination  date a
non-binding  notice of the  intention to exercise  the option to  terminate  the
Charter must be given at least twelve months in advance, with irrevocable notice
to be given seven months prior to the termination  date.  Chevron is required to
pay us a  termination  payment  (the  "Termination  Payment") on or prior to the
termination date as follows:

        (in millions of $)
        Optional termination date           Termination payment

        April 1, 2009                       8.89
        April 1, 2011                       7.88

As at June 18, 2007,  no  termination  notice had been received from Chevron for
the Charter.

Chevron is principally  engaged in the marine  transportation of oil and refined
petroleum products.  Chevron's primary transportation routes are from the Middle
East,  Indonesia,  Mexico,  West Africa and the North Sea to ports in the United
States,  Europe,  the United  Kingdom  and Asia.  Chevron has advised us that it
expects  to use the  Vessel  worldwide  as  permitted  under  the  Charter.  The
obligations of Chevron under the Charter are guaranteed by Chevron  Corporation,
a major  international  oil  company,  pursuant  to a  guarantee  (the  "Chevron
Guarantee").   Chevron  is  an  indirect,  wholly-owned  subsidiary  of  Chevron
Corporation.

The Vessel is a double-hull  oil carrier and is presently  registered  under the
Isle of Man flag. The Vessel was  constructed  under the  supervision of Chevron
and designed to Chevron's  specifications to enhance safety and reduce operating
and  maintenance  costs,  including such features as high  performance  rudders,
extra  steel  (minimal  use of high  tensile  steels),  additional  fire  safety
equipment,  redundant power generation equipment, extra coating and electrolytic
corrosion  monitoring  and  protection  systems,  additional  crew  quarters  to
facilitate  added  manning and a double-hull  design  patented by one of Chevron
Corporation's  subsidiaries.  The  builder of Sirius  Voyager  was  Ishikawajima
Harima Heavy Industries Co., Ltd.

Management

On March 31, 1999,  Frontline  became our Manager and  Technical  Advisor to the
Company,  pursuant  to  an  assignment  of a  Management  Agreement.  Under  the
Management Agreement, Frontline provides administrative, management and advisory
services  to us along  with  technical  advisory  services.  If the  Charter  is
terminated  by  Chevron,  Frontline,  acting on our  behalf,  will  provide  all
technical management services and will attempt to find an acceptable replacement
charter for the Vessel.  If an acceptable  replacement  charter is  commercially
unavailable,  the Manager  will  solicit  bids for the sale or  recharter of the
Vessel. The Manager's ability to obtain an acceptable  replacement  charter,  to
sell the Vessel or recharter  the Vessel will depend on market rates for new and
used  vessels,  both of which will depend on the supply of and demand for tanker
capacity for oil  transportation,  and the  advantages or  disadvantages  of the
Vessel compared with other vessels available at the time.

Industry Conditions

The market for  international  seaborne  crude oil  transportation  services  is
highly fragmented and competitive.  Seaborne crude oil  transportation  services
generally are provided by two main types of operators: major oil company captive
fleets (both private and  state-owned)  and  independent  shipowner  fleets.  In
addition, several owners and operators pool their vessels together on an ongoing
basis,  and  such  pools  are  available  to  customers  to the same  extent  as
independently  owned and operated fleets. Many major oil companies and other oil
trading  companies  also operate their own vessels and use such vessels not only
to transport their own crude oil but also to transport crude oil for third party
charterers in direct  competition with  independent  owners and operators in the
tanker  charter  market.  Competition  for charters is intense and is based upon
price,  location,  size, age,  condition and acceptability of the vessel and its
manager.  Competition is also affected by the availability of other size vessels
to compete in the trades in which we engage.

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

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

     (i)  ULCC-size range of approximately 320,000 to 450,000 dwt;
     (ii) VLCC-size range of approximately 200,000 to 320,000 dwt;
     (iii) Suezmax-size range of approximately 120,000 to 200,000 dwt;
     (iv) Aframax-size range of approximately 60,000 to 120,000 dwt; and
     (v)  small tankers of less than approximately 60,000 dwt.

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

The  shipping   industry  is  highly   cyclical,   experiencing   volatility  in
profitability,  vessel  values and charter  rates.  In  particular,  freight and
charterhire rates are strongly  influenced by the supply and demand for shipping
capacity.

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

     o    changes in global crude oil production;
     o    demand  for oil and  production  of crude  oil and  refined  petroleum
          products;
     o    changes in oil production and refining capacity;
     o    global and regional economic and political conditions;
     o    the distance oil and oil products are to be moved by sea;
     o    environmental and other regulatory developments; and
     o    changes  in  seaborne  and other  transportation  patterns,  including
          changes  in the  distances  over  which  cargo is  transported  due to
          geographic  changes in where commodities are produced,  oil is refined
          and cargoes are used.

The factors that influence the supply of tanker capacity include:

     o    the number of newbuilding deliveries;
     o    the scrapping rate of older vessels;
     o    potential conversion of tankers for other purposes;
     o    port or canal congestion;
     o    the number of vessels that are out of service; and
     o    national  or  international  regulations  that may  effectively  cause
          reductions in the carrying  capacity of vessels or early  obsolescence
          of tonnage.

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

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

Inspection by Classification Societies

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

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

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

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

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

     o    Class Renewal Surveys.  Class renewal  surveys,  also known as special
          surveys, are carried out for the ship's hull, machinery, including the
          electrical  plant  and  for  any  special  equipment  classed,  at the
          intervals  indicated by the character of classification  for the hull.
          At the special  survey the vessel is  thoroughly  examined,  including
          audio-gauging  to determine  the  thickness  of the steel  structures.
          Should the thickness be found to be less than class requirements,  the
          classification   society   would   prescribe   steel   renewals.   The
          classification   society  may  grant  a  one  year  grace  period  for
          completion  of the special  survey.  Substantial  amounts of money may
          have to be spent for steel  renewals  to pass a special  survey if the
          vessel  experiences  excessive  wear and tear.  In lieu of the special
          survey  every four or five years,  depending on whether a grace period
          was  granted,  a ship  owner  has the  option  of  arranging  with the
          classification  society for the vessel's  hull or machinery to be on a
          continuous  survey  cycle,  in which every part of the vessel would be
          surveyed  within a five year  cycle.  At an owner's  application,  the
          surveys required for class renewal may be split according to an agreed
          schedule to extend over the entire  period of class.  This  process is
          referred to as continuous class renewal.

Insurance

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

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

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

Environmental Regulations and Other Regulations

Government   regulations  and  laws  significantly  affects  the  ownership  and
operation  of our Vessel.  The various  types of  governmental  regulation  that
affect our Vessel  include  international  conventions  and national,  state and
local laws and regulations of the jurisdictions  where our Vessel operates or is
registered  significantly affect the ownership and operation.  We believe we are
currently in substantial compliance with applicable environmental and regulatory
laws  regarding  the ownership  and  operation of our tanker.  However,  because
existing laws may change or new laws may be  implemented,  we cannot predict the
ultimate cost of complying with all applicable  requirements  or the impact they
will  have  on  the  resale  value  or  useful  life  of  our  tanker.   Future,
non-compliance  could require us to incur  substantial  costs or to  temporarily
suspend operation of our tanker.

We believe that the heightened  environmental  and quality concerns of insurance
underwriters,  regulators and  charterers are leading to greater  inspection and
safety  requirements on all vessels and creating an increasing demand for modern
vessels that are able to conform to the  stricter  environmental  standards.  We
maintain  high  operating  standards for our Vessel that  emphasize  operational
safety,  quality maintenance,  continuous training of our crews and officers and
compliance with United States and international and other national regulations.

Our Vessel is subject to both scheduled and unscheduled inspections by a variety
of  governmental   and  private   entities,   each  of  which  may  have  unique
requirements. These entities include the local port authorities such as the U.S.
Coast Guard, harbor master or equivalent,  classification  societies, flag state
administration  or country of registry,  and charterers,  particularly  terminal
operators and major oil companies  which conduct  frequent  vessel  inspections.
Each of these entities may have unique requirements that we must comply with.

International Maritime Organization

The International Maritime  Organization,  or the IMO (the United Nations agency
for  maritime  safety and the  prevention  of marine  pollution  by ships),  has
adopted the International Convention for the Prevention of Marine Pollution from
Ships,  1973,  as modified by the Protocol of 1978 relating  thereto,  which has
been updated through various amendments,  or the "MARPOL Convention." The MARPOL
Convention relates to environmental standards including oil leakage or spilling,
garbage  management,  as well as the handling  and disposal of noxious  liquids,
harmful substances in packaged forms,  sewage and air emissions.  In March 1992,
the IMO adopted  regulations  that set forth pollution  prevention  requirements
applicable to tankers,  which became effective in July 1993. These  regulations,
which  have  been  adopted  by more  than  150  nations,  including  many of the
jurisdiction in which our Vessel operates, provide, in part, that:

     o    tankers   between  25  and  30  years  old  must  be  of   double-hull
          construction or of a mid-deck design with  double-sided  construction,
          unless:

          (1)  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 bottom; or

          (2)  they are capable of  hydrostatically  balanced  loading  (loading
               cargo into a tanker in such a way that,  in the event of a breach
               of the hull, water flows into the tanker,  displacing oil upwards
               instead of into the sea);

     o    tankers 30 years old or older must be of double-hull  construction  or
          mid-deck design with double-sided construction; and

     o    all tankers are subject to enhanced inspections.

Also, under IMO regulations,  a tanker must be of double-hull  construction or a
mid-deck design with double-sided construction, or be of another approved design
ensuring the same level of protection against oil pollution, if the tanker:

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

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

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

These  regulations  were amended in 2001 and provided a timetable  for the phase
out of single hull tankers. This timetable was amended again in December 2003 in
response to European Union, or EU,  proposals,  further  accelerating  the final
phase-out dates for single hull tankers.

The  baseline  phase-out  dates apply to tankers  according  to their  certified
arrangement  (protectively  located  segregated ballast tanks or PL/SBT) and the
type of oil carried as cargo. These regulations  identify 3 categories of single
hull tankers, including double side and double bottom tankers:

a)  Category  1 (Pre-  PL/SBT)  oil  tankers-any  tanker of 20,000 dwt or above
    carrying crude oil, fuel oil,  heavy diesel oil or lubricating  oil as cargo
    or of 30,000 dwt or above carrying other types of oil.
b)   Category 2 (PL/SBT) oil tankers-any  tanker of 20,000 dwt or above carrying
     crude oil,  fuel oil,  heavy diesel oil or  lubricating  oil as cargo or of
     30,000 dwt or above carrying other types of oil.
c)  Category  3 oil  tankers-any  tanker of  between  5,000 dwt and  20,000 dwt
    carrying crude oil, fuel oil,  heavy diesel oil or lubricating  oil as cargo
    or less than 30,000 dwt carrying other types of oil.

The table below provides the specific phase out dates according to each category
of oil  tanker.  Oil  tankers  that meet  MARPOL  Regulation  13F or have double
bottoms and double sides with  dimensions in compliance  with MARPOL  Regulation
13G1(c) continue to be exempt from the accelerated phase out.


<TABLE>
Baseline Phase Out Scheme
<CAPTION>
   Phase Out Date                               Year of Delivery

                           Category 1               Category 2                             Category 3
    <S>                <C>                            <C>
   April 5, 2005      before April 5, 1982                         before April 5, 1977
       + 2005          after April 5, 1982            After April 5, 1977 but before January 1, 1978
       + 2006                                                        1978* and 1979*
       + 2007                                                        1980* and 1981*
       + 2008                                                             1982*
       + 2009                                                             1983*
       + 2010                                                         1984* or later

                    + by Anniversary of Delivery Date In Year
                                * subject to CAS
</table>

For  Category  2 and  3  tankers,  a  successful  completion  of  the  Condition
Assessment  Scheme  (CAS)  is  required  by 15  years  of age  or by  the  first
intermediate or renewal survey due after April 5, 2005, which ever occurs later.

The new  phase-out  regime  became  effective  on April 5, 2005.  For Category 1
tankers  (pre-MARPOL  tankers without segregated ballast tanks,  generally built
before 1982),  the final  phase-out date was brought  forward to 2005 from 2007.
For Category 2 tankers  (MARPOL  tankers,  generally built after 1982) the final
phase out date has brought forward to 2010 from 2015.

To soften the  significant  impact  that would  occur if the  approximately  700
tankers  (approximately 67.0 million tons dwt) were to be phased out globally in
2010 as per above,  two  exceptions to the baseline phase out dates were adopted
which  allow  Category 2 and 3 oil  tankers  that have passed the CAS to operate
beyond the 2010 cut-off date as summarized below:

Exception  One - a flag state may  permit oil  tankers to operate to 25 years of
age provided  that, not later than July 1, 2001, the entire cargo tank length is
protected  with one of the following  arrangements  which cannot be used for the
carriage of oil:

     o    Double bottoms having a height at centerline  which does not meet that
          required by the MARPOL Regulation 13E; or

     o    Wing tanks  having a width  which does not meet that  required  by the
          International Bulk Chemical Code for type 2 cargo tank location.

Exception  Two - a flag state may permit oil  tankers,  that do not have  double
bottoms nor double sides, to operate to the age of 25 or the anniversary date of
the tanker's delivery in 2015, whichever occurs earlier.

Although the flag States are permitted to grant  extensions in both of the above
cases provided CAS is  satisfactorily  completed and IMO has been so informed of
the  extension,  coast  States have the right to deny oil tankers that have been
granted such extensions into their ports and offshore terminals.

Oil tankers granted life extension under Exception One may be denied entry after
2015 if they are 25 years of age and older.  Oil  tankers  with  neither  double
bottoms nor double sides which have been granted an  extension  under  Exception
Two may be denied entry after the relevant phase out date.

In December 2003, the IMO adopted MARPOL Regulation 13H on the prevention of oil
pollution  from oil tankers  when  carrying  heavy  grade oil,  or HGO.  The new
regulation  bans the carriage of HGO in single hull oil tankers of 5,000 dwt and
above after  April 5, 2005,  and in single hull oil tankers of 600 dwt and above
but less than 5,000 dwt,  no later than the  anniversary  of their  delivery  in
2008.

Under MARPOL Regulation 13H, HGO means any of the following:

     o    crude oils having a density at 15(0)C higher than 900 kg/m3;

     o    fuel oils having  either a density at 15(0)C higher than 900 kg/ m3 or
          a kinematic viscosity at 50(0)C higher than 180 mm2/s;

     o    bitumen, tar and their emulsions.

Under MARPOL Regulation 13H, the flag state may allow continued operation of oil
tankers  of 5,000 dwt and  above,  carrying  crude oil with a density  at 15(0)C
higher  than 900  kg/m3  but lower  than 945  kg/m3,  that  conform  to  certain
technical  specifications and, in the opinion of the such state, the ship is fit
to continue such operation, having regard to the size, age, operational area and
structural  conditions  of the ship and provided  that the  continued  operation
shall not go beyond the date on which the ship  reaches 25 years  after the date
of its delivery.  The flag state may also allow continued  operation of a single
hull oil tanker of 600 dwt and above but less than 5,000  dwt,  carrying  HGO as
cargo,  if, in the opinion of the such state,  the ship is fit to continue  such
operation,  having  regard to the size,  age,  operational  area and  structural
conditions of the ship, provided that the operation shall not go beyond the date
on which the ship reaches 25 years after the date of its delivery.

The IMO has also negotiated international  conventions that impose liability for
oil pollution in international  waters and a signatory's  territorial waters. In
September 1997, the IMO adopted Annex VI to the International Convention for the
Prevention of Pollution from Ships to address air pollution from ships. Annex VI
was ratified in May 2004, and became effective in May 2005. Annex VI sets limits
on sulfur oxide and nitrogen  oxide  emissions  from ship exhausts and prohibits
deliberate   emissions   of  ozone   depleting   substances,   such  as  halons,
chlorofluorocarbons,  emissions  of  volatile  compounds  from  cargo  tanks and
prohibition  of shipboard  incineration  of specific  substances.  Annex VI also
includes a global cap on the sulfur  content of fuel oil and allows for  special
areas to be  established  with more  stringent  controls  on  sulfur  emissions.
Compliance with these  regulations  could require the  installation of expensive
emission  control  systems  and could  have an adverse  financial  impact on the
operation of our Vessel. Additional or new conventions, laws and regulations may
be adopted that could adversely affect our ability to manage our Vessel.

The  operation of our Vessel is also affected by the  requirements  set forth in
the  IMO's  Management  Code  for the Safe  Operation  of  Ships  and  Pollution
Prevention,  or the ISM Code.  The ISM Code  requires  ship owners and  bareboat
charterers to maintain an extensive "Safety Management System" that includes the
adoption  of  a  safety  and  environmental   protection  policy  setting  forth
instructions  and procedures  for safe  operation and describing  procedures for
emergencies.  The failure of a ship owner or a bareboat charterer to comply with
the ISM  Code may  subject  such  party to  increased  liability,  may  decrease
available insurance coverage for the affected vessels and may result in a denial
of access to, or detention in certain  ports.  We rely on the safety  management
system that has been developed by Chevron.

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

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

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

United  States  Oil  Pollution  Act  of  1990  and  Comprehensive  Environmental
Response, Compensation and Liability Act of 1980

The United States regulates the tanker industry with an extensive regulatory and
liability  regime  for  environmental  protection  and  cleanup  of oil  spills,
consisting primarily of the United States Oil Pollution Act of 1990, or OPA, and
the  Comprehensive  Environmental  Response,  Compensation  and Liability Act of
1980, or CERCLA.  OPA affects all owners and operators  whose vessels trade with
the United States or its territories or possessions, or whose vessels operate in
the waters of the United  States.,  which include the United States  territorial
sea and the 200 nautical mile exclusive  economic zone around the United States.
CERCLA applies to the discharge of hazardous substances (other than oil) whether
on land or at sea. Both OPA and CERCLA impact our operations.

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

     o    natural resources damages and related assessment costs;

     o    real and personal property damages;

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

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

     o    loss of subsistence use of natural resources.


OPA limits the  liability  of  responsible  parties to the greater of $1,200 per
gross ton or $10.0  million per tanker that is over 3,000 gross tons (subject to
possible adjustment for inflation).  Under a recently proposed legislation,  OPA
liability  limits will be increased,  when such  legislation is enacted,  to the
greater of $1,900 per gross ton or $16.0  million  per tanker that is over 3,000
gross tons per discharge (subject to possible adjustment for inflation). The act
specifically  permits  individual  states to impose their own liability  regimes
with regard to oil pollution  incidents  occurring within their boundaries,  and
some states have enacted  legislation  providing  for  unlimited  liability  for
discharge of  pollutants  within their waters.  In some cases,  states that have
enacted this type of legislation  have not yet issued  implementing  regulations
defining tanker owners' responsibilities under these laws.

CERCLA,  which  applies to owners and  operators of tankers,  contains a similar
liability  regime and provides  for cleanup and removal of hazardous  substances
and for  natural  resource  damages.  Liability  under  CERCLA is limited to the
greater of $300 per gross ton or $5.0 million.  These limits of liability do not
apply,  however,  where the incident is caused by violation of applicable United
States  federal  safety,  construction  or  operating  regulations,  or  by  the
responsible party's gross negligence or willful misconduct.  These limits do not
apply if the  responsible  party  fails or refuses to report the  incident or to
co-operate and assist in connection with the substance removal  activities.  OPA
and CERCLA  each  preserve  the right to recover  damages  under  existing  law,
including maritime tort law.

OPA also requires owners and operators of vessels to establish and maintain with
the United States Coast Guard evidence of financial responsibility sufficient to
meet the limit of their  potential  strict  liability  under the act. The United
States  Coast  Guard has enacted  regulations  requiring  evidence of  financial
responsibility  in the amount of $1,500 per gross ton for tankers,  coupling the
OPA  limitation  on liability of $1,200 per gross ton with the CERCLA  liability
limit of $300 per gross ton. We expect that if the recently proposed legislation
increasing  liability  limitations under OPA is enacted, the United States Coast
Guard will  accordingly  increase the amounts of the  financial  responsibility.
Under  these  regulations,  an owner or  operator  of more  than one  tanker  is
required to obtain a  certificate  of  financial  responsibility  for the entire
fleet in an amount equal only to the financial responsibility requirement of the
tanker having the greatest maximum strict liability under OPA and CERCLA.

Operators,  such as Chevron in the case of our  Vessel,  are  required to insure
their vessels with  pollution  liability  insurance in the maximum  commercially
available amount of $1.0 billion any one incident or occurrence.  A catastrophic
spill could exceed the insurance coverage available,  in which event there could
be a material adverse effect on our business.

Under OPA,  oil tankers  without  double  hulls will not be permitted to come to
United States ports or trade in the United States waters by 2015.

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

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

     o    describe crew training and drills; and

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

In addition,  the United  States Coast Guard has announced it intends to propose
similar regulations  requiring certain vessels to prepare response plans for the
release of hazardous substances.

OPA does not prevent individual states from imposing their own liability regimes
with respect to oil pollution  incidents  occurring within their boundaries.  In
fact,  most  U.S.   states  that  border  a  navigable   waterway  have  enacted
environmental  pollution  laws that  impose  strict  liability  on a person  for
removal  costs and damages  resulting  from a discharge of oil or a release of a
hazardous substance. These laws may be more stringent than United States federal
law.

Other U.S. Environmental Requirements


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

The Clean Water Act (the "CWA")  prohibits  the  discharge  of oil or  hazardous
substances  into navigable  waters and imposes  strict  liability in the form of
penalties  for any  unauthorized  discharges.  The CWA also imposes  substantial
liability for the costs of removal,  remediation and damages. State laws for the
control  of  water   pollution  also  provide   varying   civil,   criminal  and
administrative  penalties  in the case of a discharge  of petroleum or hazardous
materials into state waters.  The CWA complements  the remedies  available under
the more recent OPA and CERCLA,  discussed above.  Under current  regulations of
the EPA,  vessels are not  required to obtain CWA permits for the  discharge  of
ballast water in U.S. ports. However, as a result of a recent U.S. federal court
decision,  vessel owners and operators may be required to obtain CWA permits for
the discharge of ballast  water,  or they will face  penalties for failing to do
so. Although the EPA is likely to appeal this decision,  we do not know how this
matter  is  likely  to be  resolved  and we  cannot  assure  you that any  costs
associated with compliance with the CWA's  permitting  requirements  will not be
material to our results of operations.

The National  Invasive  Species Act, or NISA, was enacted in 1996 in response to
growing  reports of harmful  organisms  being  released into U.S.  ports through
ballast  water taken on by ships in foreign  ports.  NISA  established a ballast
water management program for ships entering U.S. waters.  Under NISA,  mid-ocean
ballast  water  exchange  is  voluntary,  except for ships  heading to the Great
Lakes,  Hudson Bay, or vessels  engaged in the foreign  export of Alaskan  North
Slope crude oil. However,  NISA's exporting and record-keeping  requirements are
mandatory for vessels bound for any port in the United States.  Although ballast
water  exchange is the primary  means of compliance  with the act's  guidelines,
compliance  can also be achieved  through the retention of ballast water onboard
the  ship,  or the  use  of  environmentally  sound  alternative  ballast  water
management  methods  approved by the U.S. Coast Guard. If the mid-ocean  ballast
exchange is made mandatory  throughout the United States,  or if water treatment
requirements or options are instituted,  the costs of compliance  could increase
for ocean carriers.

Our operations  occasionally generate and require the transportation,  treatment
and disposal of both hazardous and non-hazardous  wastes that are subject to the
requirements of the U.S.  Resource  Conservation  and Recovery Act or comparable
state, local or foreign requirements.  In addition, from time to time we arrange
for the disposal of hazardous waste or hazardous  substances at offsite disposal
facilities.  If such materials are improperly  disposed of by third parties,  we
might still be liable for clean up costs under applicable laws.

Our Vessel  currently carry cargoes to U.S. waters regularly and we believe that
it is suitable to meet OPA and other U.S. environmental requirements and that it
would also qualify for trade if chartered to serve U.S. ports.


European Union Tanker Restrictions

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

International Conventions on Civil Liability for Oil Pollution Damage

Although the United States is not a party to these  Conventions,  many countries
ratified and followed the liability system adopted by the IMO and originally set
out in the International  Convention on Civil Liability for Oil Pollution Damage
of 1969 and the Convention for the  Establishment of an  International  Fund for
Oil Pollution of 1971. This  international  oil pollution regime was modified in
1992 by two  Protocols.  The  amended  Conventions  are known as the 1992  Civil
Liability Convention and the 1992 Fund Convention.  The 1992 Conventions entered
into  force  on May 30,  1996.  Due to a  number  of  denunciations  of the 1971
Convention this Convention ceased to be in force on May 24, 2004. A large number
of States have also  denounced the 1969 Civil  Liability  Convention and as more
States do so its importance is  increasingly  diminishing.  Under the 1992 Civil
Liability  Convention,  a vessel's  registered  owner is strictly liable for oil
pollution damage caused in the territory, territorial seas or exclusive economic
zone of a  contracting  state by  discharge  of  persistent  oil from a  tanker,
subject to certain complete defences. The 1992 Fund established by the 1992 Fund
Convention pays  compensation to those suffering oil pollution damage in a State
party to the 1992 Fund Convention who did not obtain full compensation under the
1992 Civil Liability  Convention.  This would normally apply where the shipowner
has a defence under the 1992 Civil  Liability  Convention or the damage  exceeds
the shipowner's liability under that Convention.  Under an amendment that became
effective on November 1, 2003,  liability  limits under the 1992 Civil Liability
Convention  were  increased by over 50%.  For vessels of 5,000 to 140,000  gross
tons (a unit of  measurement  for the  total  enclosed  spaces  within a vessel)
liability will be limited to SDR 4,510,000 (approximately $6.7 million) plus SDR
631  (approximately  $932) for each additional gross ton over 5,000. For vessels
of over  140,000  gross  tons,  liability  will  be  limited  to SDR  89,770,000
(approximately $132.7 million).  Also with effect from the same date the maximum
amount payable by the 1992 Fund  increased  from SDR 135 million  (approximately
$199.5 million) to SDR 203million  (approximately $300.0 million).  The right to
limit liability is forfeited under the 1992 Civil Liability  Convention if it is
proved that the pollution  damage resulted from the shipowner's  personal act or
omission, committed with the intent to cause such damage, or recklessly and with
knowledge that such damage would probably result. Vessels trading to States that
are parties to the 1992 Civil  Liability  Convention  must  provide  evidence of
insurance  covering the  liability  of the owner.  On March 2005 a third tier of
compensation  was  established  by  means of a  Supplementary  Fund.  This  Fund
provides  additional   compensation  to  that  available  under  the  1992  Fund
Convention for pollution damage in States that are members of the  Supplementary
Fund.  The amount  available  is SDR 750 million  (approximately  $1.1  billion)
including the costs payable under the 1992 Civil  Liability  Convention  and the
1992  Fund  Convention,  SDR 203  million  (approximately  $300.0  million).  In
jurisdictions  where the 1992 Civil  Liability  Convention has not been adopted,
various  legislative  schemes  govern or common law  applies,  and  liability is
imposed  either  on the  basis  of  fault  or in a  manner  similar  to the 1992
Convention.  We believe that our P&I insurance covers  liabilities  either under
the  international oil pollution schemes or under local regimes like for example
the US Oil Pollution Act 1990.

The unit of account in the 1992  Conventions is the Special  Drawing Right (SDR)
as defined by the International Monetary Fund. In this document the SDR has been
converted  into US dollars at the rate of exchange  applicable on May 2, 2006 of
SDR 1 = USD 1.477760.

Vessel Security Regulations

Since the terrorist  attacks of September 11, 2001, there have been a variety of
initiatives  intended to enhance  vessel  security.  On November 25,  2002,  the
Maritime  Transportation  Security  Act of 2002,  or MTSA came into  effect.  To
implement  certain  portions of the MTSA, in July 2003,  the United States Coast
Guard  issued  regulations  requiring  the  implementation  of certain  security
requirements  aboard vessels  operating in waters subject to the jurisdiction of
the United States.  Similarly, in December 2002, amendments to the International
Convention for the Safety of Life at Sea, or SOLAS, created a new chapter of the
convention  dealing  specifically with maritime  security.  The new chapter came
into effect in July 2004 and imposes various  detailed  security  obligations on
vessels and port  authorities,  most of which are contained in the newly created
International  Ship and Port Facilities  Security Code, or ISPS Code.  Among the
various requirements are:

     o    on-board  installation of automatic  information  systems,  or AIS, to
          enhance vessel-to-vessel and vessel-to-shore communications;

     o    on-board installation of ship security alert systems;

     o    the development of vessel security plans; and

     o    compliance with flag state security certification requirements.

The United States Coast Guard regulations,  intended to align with international
maritime security standards,  exempt non-U.S.  vessels from MTSA vessel security
measures provided such vessels have on board a valid International Ship Security
Certificate  that  attests  to  the  vessel's  compliance  with  SOLAS  security
requirements and the ISPS Code.

Our Vessel complies with the various  security  measures  addressed by the MTSA,
SOLAS and the ISPS Code.

C  Organizational Structure

As described  above,  and also in Item 7. Major  Shareholders  and Related Party
Transactions, we are a wholly owned subsidiary of California Tankers Investments
Limited,  a  company  organised  under  the  laws  of the  Bahamas,  which  is a
wholly-owned  subsidiary of ITC.  Frontline  ultimately  controls the Company as
described in more detail in Item 4.
<PAGE>



D  Property, Plant and Equipment

Other than the Vessel described above, we do not have any property.

Item 4A.  UNRESOLVED STAFF COMMENTS

None

Item 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

The following  discussion  should be read in  conjunction  with Item 3 "Selected
Financial Data" and the Company's audited Financial Statements and Notes thereto
included herein.

Our strategy  has been to acquire a Vessel and charter  this to Chevron  under a
bareboat charters which is expected to provide:

a)  charterhire  payments  we expect will be  sufficient  to pay, so long as the
    Charter is in effect:

     i.   the obligations under the loans for acquiring the Vessel,
     ii.  management fees and technical advisor's fees,
     iii. recurring fees and taxes, and
     iv.  any  other  costs  and  expenses   incidental  to  the  ownership  and
          chartering of the Vessel;

b)  termination  payments  sufficient to make sinking fund and interest payments
    on the Term  Loans,  to the  extent  allocable  to the  Vessel for which the
    related  Charter has been  terminated,  for at least two years following any
    such  termination,  during which time the Vessel may be sold or rechartered;
    and

c)  that the Vessel will be maintained in  accordance  with the good  commercial
    maintenance  practices  required  by the  Charter  and to arrange for vessel
    management and  remarketing  services to be available in case the Charter is
    terminated by Chevron, or the Vessel is for any other reason returned to our
    possession and use.

As of June 18, 2007,  notice had not been  received  from Chevron  regarding the
termination of the Charter.

Trend Information

It is expected that as the Vessel ages, the charter  income will be reduced.  In
line with this effect, the interest payable on the Term Loans financing the ship
will also be reduced as the  principal  is repaid.  Thus,  there is a consistent
reduction in income, expenses and net assets employed by the Company. However we
expect that cash flows will be adequate to service the debt load, although there
will always be  uncertainty  related to this because of the nature of the tanker
business.  However,  over the past few years,  the charter  rates have been at a
level such that we have been able to service our debt. The structure of debt and
charterhire agreements,  including provision for early termination,  provides us
with a clear future.


Market Overview

The tanker  market  proved its strength in 2006 and it was the demand side which
had the greatest  influence on the rates. The year started at average daily time
charter equivalent ("TCE") rates of approximately  $70,000 thereafter  following
the  traditional  seasonal  pattern  by  softening  to TCEs of about  $25,000 by
mid-April.  From this point markets firmed against most market predictions up to
TCEs of about $75,000 at the end of August. The fear of another active hurricane
season in the US Gulf combined with geopolitical  uncertainty and increased risk
of supply  disruptions gave strong incentives to build oil stocks throughout the
summer.  On-land storage capacity was in some regions filled to the brim, driven
by an  extraordinary  strong  contango,  with a wide use of tankers  for storage
purposes as the consequence.

Gradually  the oil  market  picked  up on the very  strong  stockbuilding  which
triggered a sharp drop in crude  prices,  from $76 per barrel in early August to
$56 in early October.  This subsequently made markets weaken and TCEs of $30,000
were reached mid-December.  At the very end of the year markets firmed providing
one steep spike to TCEs of approximately  $90,000 for a short period.  Depending
on the source of  information,  the  average  TCE for the year was $50,000 for a
double hulled Suezmax with a single hull earned about 60 percent of this.

For OPEC it was of great importance to prevent an uncontrolled  price decline so
it decided in October to cut production with by 1.2 million barrels per day from
November.  It was reported by the International Energy Agency ("IEA") an average
OPEC Oil  production,  including  Iraq but not  Angola,  of  approximately  29.7
million  barrels per day during 2006,  a 0.02  million  barrels per day decrease
from 2005.  Even if OPEC crude  production was unchanged from 2005 to 2006 there
was a noticeable shift from Nigeria and Venezuela to the Middle East.

IEA further estimate an average world oil demand at 84.5 million barrels per day
in 2006,  a 1.0  percent  increase  from  2005.  For 2007 a 1.8  percent or 1.55
million  barrels  per day growth is  forecasted  in world oil demand  with North
America, China and the Middle East as the main drivers.

The total Suezmax fleet increased by 7.5 percent in 2006 from 322 to 346 vessels
according to industry sources. The same source stipulates that a total of 25 new
vessels were  delivered to owners during 2006 while 77 new orders were made. The
majority of these are set to be delivered in 2009. The total order book amounted
to 123 vessels at the end of the year which represented approximately 35 percent
of the existing fleet.

The  tanker  market  looks  healthy  also for 2007 and it was  possible  to sell
freight  futures at the end of 2006 for the  calendar  year 2007 at a level that
equated to TCEs for the Suezmax segment at approximately $40,000.

Operating results

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

Total Revenues

 (in thousands of $)                            2006       2005    % Change
Finance lease interest income                  2,378      2,657        (11)%
-------------------------------------------------------------------------------

Interest  income  has  fallen  in line  with  expectations.  As the value of the
finance  lease falls on an annual  basis,  so does the interest  received on the
finance lease.

Expenses

(in thousands of $)                             2006       2005    % Change
Interest expense                               2,352      2,642        (11)%
Amortization of loan discount                     26         73        (64)%
-------------------------------------------------------------------------------

Interest  expense has fallen in line with  expectations,  with interest  expense
falling in line with the  principal  loan  outstanding  each year.  The  Company
amortizes  the discount  over the life of the Term Loans.  Amortization  of loan
discount has fallen as the serial loan discount was fully amortized in 2005.

Year ended December 31, 2005 compared with the year ended December 31, 2004

Total Revenues

 (in thousands of $)                            2005       2004    % Change
Finance lease interest income                  2,657      3,068       (13%)
------------------------------------------------------------------------------

Refer to explanation for 2006.

Expenses

  (in thousands of $)                           2005       2004    % Change
Interest expense                               2,642      3,028       (13%)
Amortization of loan discount                     73         73           -
------------------------------------------------------------------------------

Refer to explanation for 2006 for interest  expense.  The loan discount remained
the same  between  2005 and 2004 as both the  Serial  and Term  Loans were being
amortized.

Liquidity and Capital Resources

As set forth above,  revenues from the Charter are  currently  sufficient to pay
our obligations under the Term Loans. Chevron may elect to terminate the Charter
on the remaining specified termination dates, April 1, 2009 or April 1, 2011. If
the Charter is terminated by Chevron,  the Manager,  acting on our behalf,  will
attempt  to  find an  acceptable  replacement  charter  for  the  Vessel.  If an
acceptable  replacement  charter is commercially  unavailable,  the Manager will
solicit bids for the sale or recharter of our Vessel.  The Manager's  ability to
obtain an acceptable  replacement  charter,  to sell the Vessel or recharter the
Vessel will depend on market rates for new and used vessels,  both of which will
depend on the supply of and demand for tanker  capacity for oil  transportation,
and the advantages or  disadvantages  of the Vessel  compared with other vessels
available at the time.

Off-balance Sheet Arrangements

None


Tabular disclosure of contractual obligations

As at December  31,  2006,  we had the  following  contractual  obligations  and
commitments:

<table>
<caption>
                                                         Payments due by period
                                   Less than 1 year                                  More than 5 years
(in thousands of $)                                    1-3 years      3-5 years                             Total
<S>                                         <C>            <C>            <C>             <C>               <C>
Term Loans (8.52%)                          2,984          5,968          5,968           11,938            26,858

------------------------------------------------------------------------------------------------------------------
Total contractual obligations               2,984          5,968          5,968           11,938            26,858
------------------------------------------------------------------------------------------------------------------
</table>

Critical Accounting Policies

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

     o    Financing lease and revenue recognition

As the lease has been classified as a finance lease,  the minimum lease payments
(net of amounts representing estimated executory costs including profit thereon)
plus the unguaranteed residual value are recorded as the gross investment in the
lease.  The difference  between the gross investment in the lease and the sum of
the present values of the two components of the gross  investment is recorded as
unearned  income  which is  amortized  to income  over the lease term as finance
lease interest  income to produce a constant  periodic rate of return on the net
investment in the lease.

Recently Issued Accounting Standards

In September 2006, the United States Securities and Exchange  Commission ("SEC")
issued SAB No. 108  Considering  the  Effects of Prior Year  Misstatements  When
Quantifying  Misstatements in Current Year Financial Statements,  which provides
interpretative  guidance on how registrants should quantify financial  statement
misstatements.  Under  SAB 108  registrants  are  required  to  consider  both a
"rollover"  method,  which focuses  primarily on the income  statement impact of
misstatements,  and the "iron curtain"  method,  which focuses  primarily on the
balance  sheet impact of  misstatements.  The effects of prior year  uncorrected
errors include the potential accumulation of improper amounts that may result in
material  misstatement  on the balance  sheet or the  reversal  of prior  period
errors in the  current  period  that  result in a material  misstatement  of the
current period income statement amounts.  Adjustments to current or prior period
financial  statements  would be required in the event that after  application of
various  approaches for assessing  materiality  of a  misstatement  in a current
period financial  statements and consideration of all relevant  quantitative and
qualitative  factors,  a misstatement is determined to be material.  The Company
adopted the  provisions of SAB 108 as of December 31, 2006 and this did not have
a material effect on the Company's results of operations or financial position.
<PAGE>



Item 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Executive Officers of CalPetro Tankers (IOM) Limited

Name                                Age     Position

Tor Olav Troim                      44      Director and President
Kate Blankenship                    42      Director and Secretary
John Killip                         62      Director

Tor Olav Troim has been a Director  of  CalPetro  Tankers  (IOM)  Limited  since
October  31,  2001.  Mr.  Troim  graduated  as M.Sc  Naval  Architect  from  the
University of Trondheim,  Norway in 1985. His careers include  Portfolio Manager
Equity in  Storebrand  ASA (1987-  1990),  and Chief  Executive  Officer for the
Norwegian  Oil  Company  DNO AS  (1992-1995).  Since  1995 Mr.  Troim has been a
Director of SeaTankers  Management  in Cyprus.  In this capacity he has acted as
Chief Executive Officer for the public companies Frontline and Golar LNG Limited
(NASDAQ).  Mr. Troim was also the Chief Executive Officer of Seadrill Ltd. until
the recent takeover and intergration of Smedvig ASA. Mr. Troim is currently Vice
Chairman of these three  companies and in addition is a director and Chairman of
Ship  Finance  International  Limited  (NYSE)  and a member of the Boards in the
public companies  Golden Ocean Group Limited (OSE),  Aktiv Kapital ASA (OSE) and
PanFish ASA (OSE).

Kate  Blankenship  has been a Director of CalPetro  Tankers  (IOM) Limited since
October 31,  2001.  Mrs.  Blankenship  has been a director of the Manager  since
March  2000.  Mrs.  Blankenship  served  as the  Chief  Accounting  Officer  and
Secretary of Frontline  between 1994 and October  2005.  Mrs.  Blankenship  also
serves as Chief Financial Officer of Knightsbridge  Tankers Limited and director
of Golar LNG Limited, Ship Finance International  Limited,  Seadrill Limited and
Golden  Ocean  Group  Limited.  She is a member of the  Institute  of  Chartered
Accountants in England and Wales.

John Michael Killip has been a non-executive Isle of Man resident Director since
October 31, 2001.  Mr.  Killip is a manager with Equity  Limited,  the corporate
service  provider owned by Cains Advocates  Limited,  Isle of Man, who are legal
advisers  to the Company  and as such are  entitles  to change for  professional
advice and services.  He has been in a managerial  capacity with Cains Advocates
Limited/Equity Limited for over 18 years.

B.  Compensation

During  the  year  ended  December  31,  2006,  we paid no  compensation  to our
directors and officers.

C.  Board Practices

The directors have no fixed date of expiry of their term of office.  The details
of their  service are shown above.  The  directors  have no  entitlement  to any
benefits on termination of their office.

We have neither an audit nor a remuneration committee.

D.  Employees

We do not have any employees involved in the management of the Vessel.

Frontline  is  our  Manager  as  described  below  in  Item  7 -  Related  Party
Transactions.

E.  Share Ownership

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

Item 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

We are a wholly owned subsidiary of California  Tankers  Investments  Limited, a
company  organized  under  the  laws of the  Bahamas,  which  is a  wholly-owned
subsidiary of ITC. Frontline  ultimately controls us as described in more detail
in Item 4. All the issued and outstanding  shares of our capital stock have been
pledged by us to California Petroleum Transport  Corporation ("CPTC) pursuant to
the stock pledge agreement between us and CPTC and are being held by the Bank of
New York, formerly the Chase Manhattan Trust Company of California and JP Morgan
Chase (the "Collateral Trustee") as part of the collateral for the Notes.

Significant  changes in ownership have been disclosed in Item 4 and there are no
known arrangements that may lead to a change in control of the company.

Related Party Transactions

As discussed in Item 4, Frontline,  the ultimate parent,  is our Manager.  Under
the  Management  Agreement,  Frontline  is  entitled to a  Management  Fee and a
Technical Advisor's Fee.

Under the terms of the  management  agreement,  the Management Fee consists of a
fee of $13,625  initially per annum for each Vessel,  along with a fee of $3,000
covering all four Vessels, payable semi-annually in arrears for the period until
the third  anniversary of the closing of the Notes issue then increasing by four
percent on each subsequent anniversary of the closing of the issue of the Notes.

The Technical  Advisor's  Fee was  initially  $10,000 per annum for each Vessel,
payable semi-annually in arrears,  during the initial first three year period as
described  above. On each subsequent  anniversary of the closing of the issue of
the Notes,  the fee will  increase by four percent.  In addition,  the Technical
Advisor  is  entitled  to be  reimbursed  for the fees,  costs and  expenses  of
conducting periodic inspections of the Vessels.

Pursuant to a Designated  Representative  Agreement,  CalPetro  Holdings Limited
(the  "Designated   Representative")   was  appointed  to  represent  California
Petroleum as its Designated  Representative to act on its behalf with respect to
certain  administrative  matters  such as the  filing of  periodic  reports  and
financial  statements  with the  Securities  and  Exchange  Commission.  The fee
payable to the Designated  Representative (the "Designated  Representative Fee")
during the initial three year period  described above was $15,000 per annum with
a four percent  increase on each  subsequent  anniversary  of the closing of the
issue of the Notes.

In 2006,  a total of  $39,260  was paid  under  the  Management  and  Designated
Representative Agreements.

Item 8.  FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

See Item 18 below.


Legal Proceedings

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

Item 9.  THE OFFER AND LISTING

The  company  does not have any shares  outstanding  other  than those  owned by
California Tankers Investments Limited, which are not traded on any exchange.

Item 10.  ADDITIONAL INFORMATION

A.      Share Capital

Not Applicable
B.      Memorandum and Articles of Association

The Company is No. 68060 in the Isle of Man register.

Directors may be interested in Company  transactions but such interest should be
disclosed to the other  directors or Company  members  prior to agreement by the
board or Company meeting as appropriate.  The director concerned may not vote on
the transaction. The directors may borrow on behalf of the Company as they think
fit.  There are no stated age limits for  directors  and  directors  need not be
stockholders. They do not retire by rotation.

All shares issued are unclassified,  there is no authorization in force to issue
other classes of share. Consequently all shares have equal entitlement to voting
rights,  dividends,  profit  shares  and other  rights  and  duties.  Should any
dividend be declared and not claimed the directors  may, after a period of three
years,  resolve that such  dividends are forfeit for the benefit of the Company.
There are no provisions for changes to the rights of  stockholders  contained in
the articles,  except that by resolution of the directors the authorised capital
may be increased  and that the Company may divide or combine  shares  within the
same class.

Company  meetings may be convened by the directors or held on request of members
holding 50% of the voting shares.  Annual meetings are held according to Isle of
Man law.  Members,  their  properly  appointed  proxies and  corporate  members'
representatives are entitled to attend.

There are no limits to  ownership  of Company  securities  or to the exercise of
voting  rights.  Disclosure  of ownership is governed by Isle of Man law and any
laws operative in the jurisdictions  pertaining to the owners of the securities.
The directors of the Company may, without giving a reason, decline to register a
transfer of shares.

C.      Material Contracts

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


D.      Exchange Controls

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

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

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

E.      Taxation

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

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

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

F.      Dividends and Paying Agents

Not Applicable

G.      Statement by Experts

Not Applicable

H.      Documents on Display

We are subject to the informational  requirements of the Securities Exchange Act
of 1934, as amended. In accordance with these requirements,  we file reports and
other  information with the Securities and Exchange  Commission  ("SEC").  These
materials,  including this annual report and the accompanying  exhibits,  may be
inspected and copied at the public reference facilities maintained by the SEC at
100 F Street,  N.E.,  Washington,  DC. 20549. You may obtain  information on the
operation  of the public  reference  room by calling 1 (800)  SEC-0330.  The SEC
maintains  a website  (http://www.sec.gov.)  that  contains  reports,  proxy and
information  statements and other  information  regarding  registrants that file
electronically  with the SEC. In addition,  documents referred to in this annual
report may be inspected at the our  principal  executive  offices at 15-19 Athol
Street,  Douglas,  Isle of Man  IM1  1LB or at the  offices  of our  manager  at
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda HM 08.


I.      Subsidiary Information

Not Applicable

Item 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative information about market risk

Quantitative  information  about market risk instruments at December 31, 2006 is
as follows:

The Term Loans bear  interest at a rate of 8.52% per annum.  Interest is payable
on April 1 and October 1 of each year.  Principal is repayable on the Term Loans
in accordance with a remaining ten-year sinking fund schedule.

The table below provides the revised scheduled  sinking fund redemption  amounts
and final principal payment of the Allocated  Principal Amount of the Term Loans
following termination of the related Initial Charter on last termination date.


 Scheduled payment date     Charter not   Charter terminated  Charter terminated
                            terminated                  2009                2011
 (in thousands of $)             $'000                 $'000               $'000

 April 1, 2007                    2,984             2,984                 2,984
 April 1, 2008                    2,984             2,984                 2,984
 April 1, 2009                    2,984             2,984                 2,984
 April 1, 2010                    2,984             1,470                 2,984
 April 1, 2011                    2,984             1,590                 2,984
 April 1, 2012                    2,984             1,730                 1,090
 April 1, 2013                    2,984             1,880                 1,180
 April 1, 2014                    2,984             2,030                 1,280
 April 1, 2015                    2,986             9,206                 8,388
-------------------------------------------------------------------------------
                                 26,858            26,858               26,858
 ==============================================================================

As at June 18, 2007,  no  termination  notice had been received from Chevron for
the Charter.

Qualitative information about market risk

We were  organised  solely for the purpose of the  acquisition of one Vessel and
subsequently entered into a long-term agreement with Chevron.

Item 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable
<PAGE>



                                     PART II

Item 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None

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

None

Item 15.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Management  assessed  the  effectiveness  of the  design  and  operation  of the
Company's  disclosure  controls and procedures pursuant to Rule 13a-15(e) of the
Securities  Exchange  Act of 1934,  as of the end of the period  covered by this
annual report as of December 31, 2006. Based upon that evaluation, the Principal
Executive  Officer and Principal  Financial Officer concluded that the Company's
disclosure controls and procedures are effective as of the evaluation date.

(b) Changes in internal controls

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

Item 16.  RESERVED

Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Company's equity is neither listed nor publicly  traded.  The equity is held
by one beneficial holder,  California Tankers Investments  Limited.  Accordingly
the Company's Board of Directors has determined that the role played by an audit
committee would have no applicability to the Company.

Item 16B. CODE OF ETHICS

The Company's equity is neither listed nor publicly  traded.  The equity is held
by one beneficial holder,  California Tankers Investments  Limited.  Accordingly
the Company's  Board of Directors has determined  that the role played by a code
of ethics would have no applicability to the Company.

Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal  accountant  for 2006 and 2005 was Grant  Thornton.  The following
table sets forth for the two most recent  fiscal  years the fees paid or accrued
for audit and services provided by Grant Thornton.


(in thousands of $)                            2006             2005

Audit fees (a)                                   20               19
Audit related fees (b)                            -                -
Tax fees (c)                                      -                -
All other fees (d)                                -                -
--------------------------------------------------------------------
Total                                            20               19
--------------------------------------------------------------------

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

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

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

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

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

Item 16D. EXEMPTIONS FROM THE LISTING RULES FOR AUDIT COMMITTEES

Not Applicable

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

Not Applicable

<PAGE>

                                    PART III

Item 17.    FINANCIAL STATEMENTS

Not Applicable.

Item 18.    FINANCIAL STATEMENTS

The following financial statements and notes,  together with the report of Grant
Thornton Independent Registered Public Accounting Firm are filed as part of this
annual report.

                                                                      Page

Report of Independent Registered Public Accounting Firm                F-1

Statements of Operations and Retained Earnings for the Years Ended     F-2
December 31, 2006, 2005 and 2004

Balance Sheets as of December 31, 2006 and 2005 (as restated)          F-3

Statements of Cash Flows for the Years Ended December 31,              F-4
2006, 2005 (as restated) and 2004 (as restated)

Notes to the Financial Statements                                      F-5

Item 19.  EXHIBITS

1.1*    Certificate of  Incorporation  and Memorandum of Association of CalPetro
        Tankers (IOM) Limited,  incorporated  by reference to Exhibit 3.3 in the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

1.2*    Articles of Association of CalPetro Tankers (IOM) Limited,  incorporated
        by  reference to Exhibit 3.4 in the  Registration  Statement of CalPetro
        Tankers  (Bahamas I) Limited,  CalPetro  Tankers  (Bahamas  II) Limited,
        CalPetro  Tankers  (Bahamas  III)  Limited,  and CalPetro  Tankers (IOM)
        Limited filed  November 9, 1994 on Forms S-3, S-1 and F-1,  Registration
        No. 33-79220.

2.1*    Form  of  Term  Indenture   between   California   Petroleum   Transport
        Corporation  and  Chemical  Trust  Company of  California,  as Indenture
        Trustee,  incorporated  by reference to Exhibit 4.1 in the  Registration
        Statement  of CalPetro  Tankers  (Bahamas I) Limited,  CalPetro  Tankers
        (Bahamas  II) Limited,  CalPetro  Tankers  (Bahamas  III)  Limited,  and
        CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1
        and F-1, Registration No. 33-79220.

2.2*    Form of Term Mortgage Notes, incorporated by reference to Exhibit 4.2 in
        the  Registration  Statement  of CalPetro  Tankers  (Bahamas I) Limited,
        CalPetro  Tankers  (Bahamas II) Limited,  CalPetro Tankers (Bahamas III)
        Limited,  and CalPetro  Tankers (IOM) Limited filed  November 9, 1994 on
        Forms S-3, S-1 and F-1, Registration No. 33-79220.

2.3*    Form of  Bahamian  Statutory  Ship  Mortgage  and Deed of  Covenants  by
        [CalPetro  Tankers (Bahamas I) Limited],  [CalPetro Tankers (Bahamas II)
        Limited] to California  Petroleum Transport  Corporation  (including the
        form of  assignment  of such  Mortgage  to  Chemical  Trust  Company  of
        California,  as Collateral  Trustee,  by California  Petroleum Transport
        Corporation),   incorporated   by   reference  to  Exhibit  4.4  in  the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

2.4*    Form of Assignment  of Initial  Charter  Guarantee by [CalPetro  Tankers
        (Bahamas I) Limited]  [CalPetro Tankers (Bahamas II) Limited]  [CalPetro
        Tankers  (IOM)  Limited]  [CalPetro  Tankers  (Bahamas  III) Limited] to
        California  Petroleum  Transport  Corporation  (including  the  form  of
        Collateral  Assignment  of such  Initial  Charter  Guarantee to Chemical
        Trust  Company of  California,  as  Collateral  Trustee,  by  California
        Petroleum Transport  Corporation),  incorporated by reference to Exhibit
        4.7 in the  Registration  Statement  of  CalPetro  Tankers  (Bahamas  I)
        Limited,   CalPetro  Tankers  (Bahamas  II)  Limited,  CalPetro  Tankers
        (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November
        9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.

2.5*    Form of Assignment of Earnings and  Insurances  from  [CalPetro  Tankers
        (Bahamas I) Limited]  [CalPetro Tankers (Bahamas II) Limited]  [CalPetro
        Tankers  (IOM)  Limited]  [CalPetro  Tankers  (Bahamas  III) Limited] to
        California Petroleum Transport Corporation, incorporated by reference to
        Exhibit 4.8 in the  Registration  Statement of CalPetro Tankers (Bahamas
        I) Limited,  CalPetro  Tankers  (Bahamas II) Limited,  CalPetro  Tankers
        (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November
        9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.

2.6*    Form of Assignment of Initial Charter from [CalPetro Tankers (Bahamas I)
        Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM)
        Limited[   [CalPetro   Tankers  (Bahamas  III)  Limited]  to  California
        Petroleum  Transport  Corporation  (including  the  form  of  Collateral
        Assignment  of  such  Initial  Charter  to  Chemical  Trust  Company  of
        California,  as Collateral  Trustee,  by California  Petroleum Transport
        Corporation),   incorporated   by   reference  to  Exhibit  4.9  in  the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

2.7*    Form  of  Management  Agreement  between  P.D.  Gram  & Co.,  A.S.,  and
        [CalPetro  Tankers (Bahamas I) Limited]  [CalPetro  Tankers (Bahamas II)
        Limited]  [CalPetro  Tankers (IOM) Limited]  [CalPetro  Tankers (Bahamas
        III)  Limited],  incorporated  by  reference  to  Exhibit  4.10  in  the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

2.8*    Form of  Assignment  of  Management  Agreement  from  [CalPetro  Tankers
        (Bahamas I) Limited]  [CalPetro Tankers (Bahamas II) Limited]  [CalPetro
        Tankers  (IOM)  Limited]   [CalPetro  Tankers  (Bahamas  III)  Limited],
        incorporated by reference to Exhibit 4.11 in the Registration  Statement
        of CalPetro Tankers  (Bahamas I) Limited,  CalPetro Tankers (Bahamas II)
        Limited,  CalPetro Tankers  (Bahamas III) Limited,  and CalPetro Tankers
        (IOM)  Limited  filed  November  9,  1994 on  Forms  S-3,  S-1 and  F-1,
        Registration No. 33-79220.

2.9*    Form of Serial Loan Agreement  between  California  Petroleum  Transport
        Corporation and [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
        (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers
        (Bahamas III) Limited], incorporated by reference to Exhibit 4.12 in the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

2.10*   Form of Term  Loan  Agreement  between  California  Petroleum  Transport
        Corporation and [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
        (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers
        (Bahamas III) Limited], incorporated by reference to Exhibit 4.13 in the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

2.11*   Form of Collateral  Agreement  between  California  Petroleum  Transport
        Corporation  [CalPetro  Tankers (Bahamas I) Limited]  [CalPetro  Tankers
        (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers
        (Bahamas  III)  Limited],   the  Indenture   Trustee  under  the  Serial
        Indenture,  the Indenture  Trustee under the Term Indenture and Chemical
        Trust Company of  California,  as Collateral  Trustee,  incorporated  by
        reference  to Exhibit  4.14 in the  Registration  Statement  of CalPetro
        Tankers  (Bahamas I) Limited,  CalPetro  Tankers  (Bahamas  II) Limited,
        CalPetro  Tankers  (Bahamas  III)  Limited,  and CalPetro  Tankers (IOM)
        Limited filed  November 9, 1994 on Forms S-3, S-1 and F-1,  Registration
        No. 33-79220.

2.12*   Form of  Issue of One  Debenture  from  [CalPetro  Tankers  (Bahamas  I)
        Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM)
        Limited]   [CalPetro   Tankers  (Bahamas  III)  Limited]  to  California
        Petroleum  Transport  Corporation,  incorporated by reference to Exhibit
        4.15 in the  Registration  Statement  of  CalPetro  Tankers  (Bahamas I)
        Limited,   CalPetro  Tankers  (Bahamas  II)  Limited,  CalPetro  Tankers
        (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November
        9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.

4.1*    Form of Initial Charter Guarantee by Chevron  Corporation,  incorporated
        by reference to Exhibit 10.1 in the  Registration  Statement of CalPetro
        Tankers  (Bahamas I) Limited,  CalPetro  Tankers  (Bahamas  II) Limited,
        CalPetro  Tankers  (Bahamas  III)  Limited,  and CalPetro  Tankers (IOM)
        Limited filed  November 9, 1994 on Forms S-3, S-1 and F-1,  Registration
        No. 33-79220.

4.2*    Form of Bareboat Initial Charter between  [CalPetro  Tankers (Bahamas I)
        Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM)
        Limited]  [CalPetro Tankers (Bahamas III) Limited] and Chevron Transport
        Corporation,   incorporated   by   reference  to  Exhibit  10.2  in  the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

4.3*    Form of Vessel Purchase  Agreement between [CalPetro Tankers (Bahamas I)
        Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM)
        Limited]  [CalPetro Tankers (Bahamas III) Limited] and Chevron Transport
        Corporation  (including  the form of Assignment of such Vessel  Purchase
        Agreement to California Petroleum Transport),  incorporated by reference
        to  Exhibit  10.3 in the  Registration  Statement  of  CalPetro  Tankers
        (Bahamas I) Limited,  CalPetro  Tankers  (Bahamas II) Limited,  CalPetro
        Tankers (Bahamas III) Limited,  and CalPetro Tankers (IOM) Limited filed
        November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.

10.1*   Powers of  Attorney  for  directors  and  certain  officers  of CalPetro
        Tankers (IOM) Limited,  incorporated by reference to Exhibit 24.1 in the
        Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro
        Tankers  (Bahamas II) Limited,  CalPetro  Tankers (Bahamas III) Limited,
        and CalPetro  Tankers (IOM) Limited filed November 9, 1994 on Forms S-3,
        S-1 and F-1, Registration No. 33-79220.

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

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

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

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

* Incorporated by reference to the filing indicated.
<PAGE>


Report of Independent Registered Public Accounting Firm
To the Board of Directors
Calpetro Tankers (IOM) Limited

We have  audited  the  accompanying  balance  sheets of Calpetro  Tankers  (IOM)
Limited  (the  "Company")  as of  December  31,  2006 and  2005 and the  related
statements of operations and retained  earnings,  and cash flows for each of the
three years in the period ended December 31, 2006.  These  financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we  engaged  to  perform  an audit of its  internal
control over financial reporting.  Our audits included consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Calpetro Tankers (IOM) Limited
as of  December  31, 2006 and 2005 and the  results of its  operations  and cash
flows for each of the three years in the period  ended  December  31,  2006,  in
conformity with accounting principles generally accepted in the United States of
America.

As discussed in Note 2 the Company has restated its balance sheet as of December
31, 2005 and its  statements of cash flows for the years ended December 31, 2005
and 2004.



/s/ Grant Thornton LLP

New York, New York
June 22, 2007

<PAGE>

CalPetro Tankers (IOM) Limited
Statements of Operations and Retained Earnings
For the years ended December 31, 2006, 2005 and 2004
(in thousands of $)

                                                      2006       2005      2004
Operating revenues
         Finance lease interest income               2,378      2,657     3,068
-------------------------------------------------------------------------------
         Total operating revenues                    2,378      2,657     3,068
-------------------------------------------------------------------------------
Operating expenses
         General and administrative expenses         (110)       (95)      (74)
-------------------------------------------------------------------------------
         Total operating expenses                    (110)       (95)      (74)
-------------------------------------------------------------------------------
Net operating income                                 2,268      2,562     2,994
-------------------------------------------------------------------------------
Other operating income/(expenses)
         Interest income                                63         46       54
         Interest expense                          (2,352)    (2,642)  (3,028)
         Amortization of deferred charges             (26)       (73)     (73)
-------------------------------------------------------------------------------
         Net other expenses                        (2,315)    (2,669)   (3,047)
-------------------------------------------------------------------------------
Net loss                                              (47)      (107)      (53)
===============================================================================

Retained earnings at the start of the year           1,440      1,547     1,600
-------------------------------------------------------------------------------
Retained earnings at the end of the year             1,393      1,440     1,547
===============================================================================

The accompanying notes are an integral part of these financial statements
<PAGE>

CalPetro Tankers (IOM) Limited
Balance Sheets as of December 31, 2006 and 2005
(in thousands of $)

                                                              2006         2005
                                                                           (As
                                                                      restated)
ASSETS
    Current assets:
    Restricted cash                                            1,867      1,837
    Current portion of net investment in finance lease         3,096      3,094
    Interest receivable                                          545        608
    Other current assets                                           8          6
-------------------------------------------------------------------------------
    Total current assets                                       5,516      5,545
    Net investment in finance lease, less current portion     23,164     26,186
    Deferred charges                                             189        215
-------------------------------------------------------------------------------
    Total assets                                              28,869     31,946
===============================================================================

LIABILITIES AND STOCKHOLDER'S EQUITY
    Current liabilities:
    Accrued interest                                             572        636
    Current portion of term loans                              2,984      2,984
    Other current liabilities                                     45         27
-------------------------------------------------------------------------------
    Total current liabilities                                  3,601      3,647
    Long-term loans                                           23,874     26,858
-------------------------------------------------------------------------------
    Total liabilities                                         27,475     30,505
-------------------------------------------------------------------------------

    Commitments and contingencies

    Stockholder's equity:
    Unclassified stock: 2 shares of $500 par value                 1          1
    Retained earnings                                          1,393      1,440
-------------------------------------------------------------------------------
    Total stockholder's equity                                 1,394      1,441
-------------------------------------------------------------------------------
    Total liabilities and stockholder's equity                28,869     31,946
===============================================================================

The accompanying notes are an integral part of these financial statements
<PAGE>

CalPetro Tankers (IOM) Limited
Statements of Cash Flows for the years ended
December 31, 2006, 2005 and 2004
(in thousands of $)

                                                    2006        2005        2004
                                                                 (As         (As
                                                           restated)   restated)

Net loss                                            (47)       (107)        (53)
Adjustments to reconcile net loss to net cash
provided  by operating activities:
    Amortization of discount on loans                 26          73          73
    Changes in assets and liabilities:
    Interest receivable                               63          86         108
    Other current assets                             (2)          14          13
    Accrued interest payable                        (64)        (99)       (107)
    Other current liabilities                         18         (2)           -
--------------------------------------------------------------------------------
Net cash/(used in) provided by operating
activities                                           (6)        (35)          34
--------------------------------------------------------------------------------

Investing activities:
Finance lease payments received                    3,020       4,131       5,179
(Placement) maturity of restricted cash             (30)       1,114         (3)
--------------------------------------------------------------------------------
Net cash provided by investing activities          2,990       5,245       5,176
--------------------------------------------------------------------------------

Financing activities:
Repayments of debt                               (2,984)     (5,210)     (5,210)
--------------------------------------------------------------------------------
Net cash used in financing activities            (2,984)     (5,210)     (5,210)
--------------------------------------------------------------------------------
Net increase in cash and cash equivalents              -           -           -
Cash and cash equivalents at start of the year         -           -           -
--------------------------------------------------------------------------------
Cash and cash equivalents at end of the year           -           -           -
================================================================================

Supplemental disclosure of cash flow information:

Interest paid                                      2,415       2,740       3,136
================================================================================

The accompanying notes are an integral part of these financial statements
<PAGE>

CalPetro Tankers (IOM) Limited
Notes to the Financial Statements


1.  Description of Business

The Company was incorporated in the Isle of Man on May 13, 1994 with three other
entities:  CalPetro Tankers  (Bahamas I) Limited,  CalPetro Tankers (Bahamas II)
Limited  and  CalPetro  Tankers  (Bahamas  III)  Limited,   each  of  which  was
incorporated  in the Bahamas.  These  entities (the  "Owners") were organized as
special  purpose  companies for the purpose of acquiring one of four oil tankers
(each a "Vessel",  together the "Vessels")  from Chevron  Transport  Corporation
("Chevron")  which were concurrently  chartered on long-term charter  agreements
back to Chevron. California Petroleum Transport Corporation,  acting as agent on
behalf of the Owners,  issued as full recourse  obligations  Term Mortgage Notes
and Serial Mortgage Notes (the Serial and Term Notes),  and subsequently  loaned
the  proceeds  to the  Owners  in the form of Term  Mortgage  Loans  and  Serial
Mortgage  Loans (the "Term Loans" and "Serial Loans"  respectively)  to fund the
acquisition  of the Vessels from  Chevron.  The final  tranche of the  principal
balances  of the Serial  Loans  payable by the Company to  California  Petroleum
Transport Corporation matured on April 1, 2005.

The Owners only source of funds with respect to the Term Loans is payments  from
Chevron, including Termination Payments. The Owners do not have any other source
of funds for payment of the Term Loans.

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

2.  Principal Accounting Policies

A summary of the Company's accounting policies is set out below.

(a)  Financing  lease and revenue  recognition The long-term  charter  agreement
     between  the Company  and  Chevron  transfers  to Chevron all the risks and
     rewards  associated with ownership,  other than legal title, and contains a
     bargain  purchase  option.  As such, it is classified as a direct financing
     lease in accordance  with Statement of Financial  Accounting  Standards No.
     13.

     Accordingly,  the minimum payments under the charter agreement are recorded
     as the gross  investment in the finance lease.  The difference  between the
     gross  investment  in the  finance  lease  and the  cost of the  Vessel  is
     recorded as unearned  income  which is amortized to income over the life of
     the charter  agreement to produce a constant periodic rate of return on the
     net investment in the finance lease.

(b)  Interest payable recognition  Interest payable on the Serial and Term Loans
     is accrued on a daily basis.

(c)  Discount on loans
     Discount on issue of the long-term  debt is being  amortized to maturity of
     the debt on a straight line basis.

(d)  Taxation
     The Company is exempt from United  States  Federal,  State and Local income
     taxes on its  interest  income  and has been  granted  exemptions  from the
     statutory  18% tax on profits  required to be assessed  against Isle of Man
     companies.

(e)  Reporting currency
     The reporting currency is United States dollars. The functional currency is
     United States dollars.

(f)  Use of estimates
     The  preparation  of financial  statements  in accordance  with  accounting
     principles  generally accepted in the United States of America requires the
     Company to make  estimates  and  assumptions  in  determining  the reported
     amounts of assets and liabilities and disclosures of contingent  assets and
     liabilities  on the  dates of the  financial  statements  and the  reported
     amounts of revenues  and  expenses  during the  reporting  periods.  Actual
     results could differ from these estimates.

Recently issued Accounting Standards

In September 2006, the United States Securities and Exchange  Commission ("SEC")
issued SAB No. 108  "Considering  the Effects of Prior Year  Misstatements  When
Quantifying Misstatements in Current Year Financial Statements",  which provides
interpretative  guidance on how registrants should quantify financial  statement
misstatements.  Under  SAB 108  registrants  are  required  to  consider  both a
"rollover"  method,  which focuses  primarily on the income  statement impact of
misstatements,  and the "iron curtain"  method,  which focuses  primarily on the
balance  sheet impact of  misstatements.  The effects of prior year  uncorrected
errors include the potential accumulation of improper amounts that may result in
material  misstatement  on the balance  sheet or the  reversal  of prior  period
errors in the  current  period  that  result in a material  misstatement  of the
current period income statement amounts.  Adjustments to current or prior period
financial  statements  would be required in the event that after  application of
various  approaches for assessing  materiality  of a  misstatement  in a current
period financial  statements and consideration of all relevant  quantitative and
qualitative factors, a misstatement is determined to be material. We adopted the
provisions  of SAB 108 as of December 31, 2006.  The adoption of SAB 108 did not
have a material  effect on the  Company's  results of  operations  or  financial
position.

Restatement of balance sheet and statement of cash flow

The balance sheet for the year ended December 31, 2005 and the statement of cash
flows for the years ended  December  31, 2005 and 2004 have been  restated.  The
Company had incorrectly classified Restricted Cash as Cash and Cash Equivalents,
therefore a restatement was required to correct the classification.

The effect of this  restatement  on the balance  sheet is such that the Cash and
Cash Equivalents line item is now classified as Restricted Cash.

The following  condensed  statements of cash flows for the years ended  December
31, 2005 and 2004 set forth the effects of these restatements:

                                               Year ended December 31, 2005
                                         As previously  Adjustments  As restated
                                              reported
(in thousands of $)

Net cash provided by operating activities          (35)          --         (35)
Net cash provided by investing activities        4,131        1,114       5,245
Net cash used in financing activities           (5,210)          --      (5,210)
Net increase in cash and cash equivalents       (1,114)       1,114          --
Cash and cash equivalents at start of the year   2,951       (2,951)         --
Cash and cash equivalents at end of the year     1,837       (1,837)         --

                                               Year ended December 31, 2004
                                         As previously  Adjustments  As restated
                                              reported
(in thousands of $)

Net cash provided by operating activities           34           --          34
Net cash provided by investing activities        5,179           (3)      5,176
Net cash used in financing activities           (5,210)          --      (5,210)
Net increase in cash and cash equivalents            3           (3)         --
Cash and cash equivalents at start of the year   2,948       (2,948)         --
Cash and cash equivalents at end of the year     2,951       (2,951)         --

3.  Restricted Cash

The restricted cash accounts were  established and are maintained by Bank of New
York  (formerly the Chase  Manhattan  Trust  Company of California  and JPMorgan
Chase) as the Collateral  Trustee who maintains the accounts as collateral agent
for the equal and ratable benefit of the holders of the Term Notes.  Charterhire
payments are deposited  into a revenue  account and these funds can only be used
to fund the principal and interest due on the Term Notes and any operating costs
in relation to operating the Owners.

4.  Finance Lease

The  Company  has  chartered  its Vessel on a long term  bareboat  charter  (the
"Charter") to Chevron  Transport  Corporation  (the "Chevron")  which has a term
expiring on April 1, 2015  subject to Chevron's  right to terminate  the Initial
Charter on certain  specified  dates.  Chevron  did not elect to  terminate  the
Charter on the first two  specified  dates April 1, 2005 and April 1, 2007.  The
remaining  specified  dates  are  April 1,  2009 and  April 1,  2011.  For these
remaining  optional  termination dates a non-binding  notice of the intention to
exercise  the option to  terminate  the  Charter  must be given at least  twelve
months in advance, with irrevocable notice to be given seven months prior to the
termination date.  Chevron is required to pay the Company  termination  payments
(the "Termination Payment") of $8.89 million and $7.88 million respectively,  on
or prior to the remaining termination.

Chevron has the option to purchase  the vessel for $1 on April 1, 2015  provided
the  Initial  Charter is still in place.  As at June 18,  2007,  no  termination
notice had been received from Chevron for the Charter.

The following  schedule  lists the  components of the net  investment in finance
lease:

(in thousands of $)                                         2006            2005
Total minimum lease payments to be received               36,210          41,673
Less: Unearned income                                    (9,950)        (12,393)
--------------------------------------------------------------------------------
Net investment in finance lease                           26,260          29,280
================================================================================

Lease payments under the charter agreement for each of the five succeeding years
are as follows:  $5,209,000 in 2007,  $4,955,000  in 2008,  $4,701 ,000 in 2009,
$4,447,000 in 2010 and $4,193,000 in 2011.

5.  Deferred Charges

Deferred charges represent the  capitalization of debt issue costs.  These costs
are amortized over the term of the Loans on a straight line basis.  The deferred
charges are comprised of the following amounts:

(in thousands of $)                                        2006             2005
 Debt arrangement fees                                    1,006            1,006
Accumulated amortization                                  (817)            (791)
--------------------------------------------------------------------------------
                                                            189              215
================================================================================

6.  Debt

(in thousands of $)                                         2006            2005
8.52% Term Loans due 2015                                 26,858          29,842
Less: current portion                                    (2,984)         (2,984)
--------------------------------------------------------------------------------
                                                          23,874          26,858
================================================================================

The outstanding debt as of December 31, 2006 is repayable as follows:

(in thousands of $)
Year ending December 31,
2007                                                                       2,984
2008                                                                       2,984
2009                                                                       2,984
2010                                                                       2,984
2011                                                                       2,984
2012 and later                                                            11,938
--------------------------------------------------------------------------------
Total debt                                                                26,858
================================================================================

The Term Loans bear  interest at a rate of 8.52% per annum.  Interest is payable
semi-annually on April 1 and October 1 each year.  Principal is repayable on the
Term Loans in accordance with a remaining nine year sinking fund schedule.

If an Initial  Charter is  terminated,  the  scheduled  mandatory  sinking  fund
payments  on the Term  Loans will be  revised  so that the  allocated  principal
amount  of the  Term  Loans  for the  related  Vessel  will be  redeemed  on the
remaining  sinking fund redemption dates on a schedule that  approximates  level
debt service with an  additional  principal  payment on the maturity  date of $7
million.

The table below provides the revised scheduled  sinking fund redemption  amounts
and final principal payment of the Allocated  Principal Amount of the Term Loans
following  termination  of the related  Initial  Charter on each of the optional
termination dates. The Company did not receive any notification from the Initial
Charter of their intention to terminate the Charter on April 1, 2005 or April 1,
2007;  therefore  the  Charter  remains  in place  with the  remaining  Optional
Termination Dates being April 1, 2009 and April 1, 2011.

                                                          Charter        Charter
Scheduled payment date                  Charter not    terminated     terminated
                                         terminated          2009           2011
(in thousands of $)                           $'000         $'000          $'000

 April 1, 2007                                2,984         2,984          2,984
 April 1, 2008                                2,984         2,984          2,984
 April 1, 2009                                2,984         2,984          2,984
 April 1, 2010                                2,984         1,470          2,984
 April 1, 2011                                2,984         1,590          2,984
 April 1, 2012                                2,984         1,730          1,090
 April 1, 2013                                2,984         1,880          1,180
 April 1, 2014                                2,984         2,030          1,280
 April 1, 2015                                2,986         9,206          8,388
--------------------------------------------------------------------------------
                                             26,858        26,858         26,858
================================================================================

The Term Loans are collateralized by first preference  mortgage on the Vessel to
California Petroleum Transport Corporation.  The earnings and insurance relating
to the Vessel  have been  collaterally  assigned  pursuant to an  Assignment  of
Earnings and Insurance to California Petroleum Transport  Corporation,  which in
turn has assigned such  Assignment  of Earnings and Insurance to the  Collateral
Trustee.  The Initial Charter and Chevron Guarantee  relating to the Vessel have
been  collaterally  assigned  pursuant to the Assignment of Initial  Charter and
Assignment  of Initial  Charter  Guarantee  to  California  Petroleum  Transport
Corporation,  which in turn  has  assigned  such  Assignment  to the  Collateral
Trustee.  The  Capital  Stock of the  Company  has been  pledged  to  California
Petroleum Transport Corporation pursuant to the Stock Pledge Agreement.

7.  Share Capital

(in $)                                             2006              2005
Authorized share capital:
   2 shares of $500 each                          1,000             1,000
=========================================================================

Issued and outstanding share capital:
   2 shares of $500 each                          1,000             1,000
=========================================================================

8.  Financial Instruments

Fair values

The  carrying  value  and  estimated  fair  value  of  the  Company's  financial
instruments at December 31, 2006 and 2005 are as follows:

                                    2006         2006       2005         2005
                                    Fair     Carrying       Fair     Carrying
(in thousands of $)                value        value      value        value

Restricted cash                    1,867        1,867      1,837        1,837
8.52% Term Loans due 2015         28,637       26,858     33,423        29,842

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

The carrying value of restricted cash,  which is highly liquid,  is a reasonable
estimate of fair value.

The estimated fair value for fixed rate debt is based on the quoted market price
of these or similar debt when available.

Concentrations of risk
The  Company's  only  source of funds for the  repayment  of the  principal  and
interest  on  the  Term  Loans  are  from  charterhire  payments  from  Chevron,
investment income and the proceeds, if any, from the sale of any of the Vessels.
Accordingly,  the Company's ability to service its obligations on the Term Loans
is wholly dependent upon the financial condition, results of operations and cash
flows from Chevron.

9.  Related Party Transactions

Pursuant to a  management  agreement,  Frontline  is the  Company's  Manager and
Technical Advisor.  Under the management  agreement,  Frontline is entitled to a
Management Fee and a Technical Advisor's Fee.

Under the terms of the  management  agreement,  the Management Fee consists of a
fee of $13,625  initially  per annum for the Vessel,  along with a fee of $3,000
covering  all  four  Vessels  in  the  California   Petroleum   Group,   payable
semi-annually  in arrears  for the  period  until the third  anniversary  of the
closing of the Notes issue then  increasing  by four percent on each  subsequent
anniversary of the closing of the issue of the Notes.

The  technical  Advisor's  Fee was  initially  $10,000 per annum for the Vessel,
payable semi-annually in arrears,  during the initial first three year period as
described  above. On each subsequent  anniversary of the closing of the issue of
the Notes,  the fee will  increase by four percent.  In addition,  the Technical
Advisor  is  entitled  to be  reimbursed  for the fees,  costs and  expenses  of
conducting periodic inspections of the Vessel.

Pursuant to a Designated  Representative  Agreement,  CalPetro  Holdings Limited
(the  "Designated   Representative")   was  appointed  to  represent  California
Petroleum as its Designated  Representative to act on its behalf with respect to
certain  administrative  matters  such as the  filing of  periodic  reports  and
financial  statements  with the  Securities  and  Exchange  Commission.  The fee
payable to the Designated  Representative (the "Designated  Representative Fee")
during the initial three year period  described above was $15,000 per annum with
a four percent  increase on each  subsequent  anniversary  of the closing of the
issue of the Notes.

Management  fee  expenses  and  management  fee payable as of December 31, 2006,
2005, and 2004 are as follows:

(in thousands of $)                           2006       2005          2004
Management fee expenses                         40         38            37
Management fee payable                          10         10             9

10. Commitments and Contingencies

The Term Loans are  collateralized by a first preference  mortgage on the Vessel
to  California  Petroleum  Transport  Corporation.  The earnings  and  insurance
relating to the Vessel have been collaterally assigned pursuant to an Assignment
of Earnings and Insurance to California Petroleum Transport  Corporation,  which
in turn has assigned such Assignment of Earnings and Insurance to the Collateral
Trustee.  The Initial Charter and Chevron Guarantee  relating to the Vessel have
been  collaterally  assigned  pursuant to the Assignment of Initial  Charter and
Assignment  of Initial  Charter  Guarantee  to  California  Petroleum  Transport
Corporation,  which in turn  has  assigned  such  Assignment  to the  Collateral
Trustee.  The  Capital  Stock of the  Company  has been  pledged  to  California
Petroleum Transport Corporation pursuant to the Stock Pledge Agreement.

As at December 31, 2006,  Chevron  holds an option to purchase the Vessel for $1
on April 1, 2015 provided the Initial Charter is still in place.
<PAGE>



                                   SIGNATURES

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


                                        CalPetro Tankers (IOM) Limited




                                        /s/ Kate Blankenship
                                        ------------------------------
                                            Kate Blankenship
                                            Director and Secretary



Date: June 26, 2007