UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





(Mark
One)





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





For
      the fiscal year ended
            December 31,
      2009




or


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





For
      the transition period from
            to





Commission
      file number
            033-79220





California
      Petroleum Transport Corporation


(Exact
name of registrant as specified in its charter)





Delaware
            
            04-3232976State
      or other jurisdiction of incorporation or organization
            
            (I.R.S.
      Employer Identification No.)





114
      West 47th Street, Suite 2310, New York, New York 10036(Address
      of principal executive offices)
            
            (Zip
      Code)





Registrant’s
      telephone number, including area code
            (212)
      302 5151





Securities
registered pursuant to Section 12(b) of the Act:





Title
      of each class
              
              Name
      of each exchange on which registeredNone
              
              Not
      applicable


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





None


(Title
of class)








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





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


[    ]
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 Exchange Act 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


[    ]
Yes                      [
X ] No





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of the
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.


[    ]
Yes                      [
X ] No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer [  ]
              Accelerated
      filer [  ]Non-accelerated
      filer [ X ]   (Do not check if a smaller reporting
      company)
              Smaller
      reporting company
[  ]


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


[    ]
Yes                      [
X ] No





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.


None





Note.—If a determination as to
whether a particular person or entity is an affiliate cannot be made without
involving unreasonable effort and expense, the aggregate market value of the
common stock held by non-affiliates may be calculated on the basis of
assumptions reasonable under the circumstances, provided that the assumptions
are set forth in this Form.





APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY





PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.[   ]
Yes [   ] No





(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)








Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of March 19, 2010




1000
shares of Common Stock, $1.00 par value





DOCUMENTS
INCORPORATED BY REFERENCE:


None.










CALIFORNIA
PETROLEUM TRANSPORT CORPORATION


FORM
10-K




TABLE
OF CONTENTS






PART
      I
              
              1Item
      1.
              Business
              1Item
      1A.
              Risk
      Factors
              5Item
      1B.
              Unresolved
      Staff Comments
              12Item
      2.
              Properties
              12Item
      3.
              Legal
      Proceedings
              12Item
      4.
              (Removed
      and Reserved)
              12PART
      II
              
              13Item
      5.
              Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
              13Item
      6.
              Selected
      Financial Data
              13Item
      7.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              14Item
      7A.
              Quantitative
      and Qualitative Disclosures about Market Risk
              17Item
      8.
              Financial
      Statements and Supplementary Data
              17Item
      9.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
              27Item
      9A(T).
              Controls
      and Procedures
              28Item
      9B.
              Other
      Information
              29PART
      III
              
              30Item
      10.
              Directors
      and Executive Officers of the Registrant
              30Item
      11.
              Executive
      Compensation
              30Item
      12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
              30Item
      13.
              Certain
      Relationships and Related Transactions
              31Item
      14.
              Principal
      Accountant Fees and Services
              31PART
      IV
              
              32Item
      15.
              Exhibits
      and Financial Statement Schedules
              32SIGNATURES
              
              36





PART
I




Cautionary
Statement Regarding Forward-Looking Statements




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




California
Petroleum Transport Corporation (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,” “expect,” “anticipate,” “intends,”
“estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,”
“should”  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, including
changes in demand resulting from 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 the Company with the
Securities and Exchange Commission.




Item
      1.
            Business




The
Company




California
Petroleum Transport Corporation (the “Company”) was incorporated in Delaware in
1995. We are a special purpose corporation organized solely for the purpose of
issuing, as agent on behalf of the Owners (as defined below), term mortgage
notes and serial mortgage notes (together the “Notes”) as our obligations and
loaning the proceeds of the sales to the Owners, by means of term and serial
loans, to facilitate the funding of the acquisition of the four vessels (the
“Vessels”) described below in Item 2. from Chevron Transport Corporation, or
Chevron. All of our shares were held by The California Trust, a Massachusetts
charitable lead trust formed by JH Holdings, a Massachusetts corporation, for
the benefit of certain charitable institutions in Massachusetts.On September 14, 2009, The
California Trust transferred
all of the Company's shares of common stock to GSS Holdings Boston, Inc.
("Holdings"), a Delaware corporation. Global Securitization Services, LLC
("GSS") a Delaware limited liability company, an affiliate of Holdings, provides
management and administrative services to the Company.






1




Information
about revenues, profits and total assets is provided in the financial statements
included in this report.




We have
no employees.




The
Owners




Each of
CalPetro Tankers (Bahamas I) Limited (“CalPetro Bahamas I”), CalPetro Tankers
(Bahamas II) Limited (“CalPetro Bahamas II”) and CalPetro Tankers (Bahamas III)
Limited (“CalPetro Bahamas III”), was organized as a special purpose company
under the laws of the Bahamas for the purpose of acquiring and chartering one of
the Vessels. Similarly, CalPetro Tankers (IOM) Limited (“CalPetro IOM”) was
organized as a special purpose company under the laws of the Isle of Man for the
purpose of acquiring and chartering one of the Vessels.  Each of the
foregoing companies is also referred to in this document as an
“Owner”.  Each Owner will only engage in the business of the ownership
and chartering of its Vessel in addition to activities resulting from or
incidental to such ownership and chartering. Each Owner is a majority-owned
subsidiary of Frontline Ltd. or Frontline, an Oslo, London and New York Stock
Exchange listed Bermuda company. None of the Owners are owned by, or are
affiliated with, us and neither we nor any Owner is owned by or is an affiliate
of Chevron.




The
Charters




Three of
the Vessels, the Cygnus Voyager, the Altair Voyager and the Sirius Voyager are
currently chartered to Chevron under bareboat charters dated as of the date of
the original issuance of the Notes (collectively, the “Chevron Charters”) and
are due to expire on April 1, 2015 assuming no termination of the Sirius Voyager
charter. The Front Voyager is currently chartered to Front Voyager Inc. under a
bareboat charter (the “Front Voyager Charter”) which is scheduled to expire on
April 1, 2010 following the notice of termination from Front Voyager Inc. on
January 5, 2010. A Memorandum of Agreement, dated March 15, 2010, has been
signed regarding the sale of Front Voyager. Delivery to the buyers is
expected to occur in the first half of April 2010. We refer to the Chevron
Charters and the Front Voyager Charter collectively as the
Charters.




Under the
Chevron Charters, Chevron can elect to terminate the charter on any of three
termination dates occurring at two-year intervals that began in 2003, 2004 and
2006. Non-binding notice of Chevron’s intention to terminate must be given one
year prior to the termination date. Binding notice must be given seven months
prior to the termination date. The final termination dates for the Cygnus
Voyager and Altair Voyager have passed and Chevron did not give notice of
termination. Chevron is required to pay the Owner of Sirius Voyager a
termination payment of $7.88 million on the remaining termination date of April
1, 2011 if the charter is terminated. As of March 19, 2010, we have not received
a termination notice with respect to Sirius Voyager.




On April
21, 2005, one of the Owners, CalPetro Bahamas III received irrevocable notice
from Chevron regarding the termination of its bareboat charter of the vessel
Front Voyager pursuant to the terms of that charter and received from Chevron a
termination fee in the amount of $5.05 million. On April 1, 2006, the Front
Voyager was redelivered to its Owner who immediately delivered it to Front
Voyager Inc., a wholly owned subsidiary of Frontline, to commence employment
under the Front Voyager Charter for an initial two year period (the “Initial
Period”) which provided for prepaid charterhire of $5.05 million for the two
years ended April 1, 2008. Front Voyager Inc. exercised options for two one year
extensions and gave notice of termination on January 5, 2010 such that the
charter will terminate on April 1, 2010. As a result, Front
Voyager Inc. is obligated to pay CalPetro Bahamas III an amount, after
accounting for the Chevron termination fee of $5.05 million, Initial Period
charterhire and all expenses incurred to recharter the vessel that is sufficient
to cover:






2




(a)
            the
      principal and interest due on the serial and term loans from California
      Petroleum based on the revised sinking fund schedule that took effect when
      the charter was terminated by
Chevron;




(b)
            any
      recurring fees and taxes for the
vessel;




(c)
            the
      management fee and technical advisor’s fees allocated to the
      Owner;




(d)
            the
      amount of fees and expenses of the Indenture Trustee, trustee fees and
      designated representative fees allocable to the Owner;
  and




(e)
            an
      amount equal to at least 30% of the estimated annual amounts above to
      cover miscellaneous and unexpected
expenses.




If the
charter agreement for the Sirius Voyager is terminated and an acceptable
replacement charter cannot be found, Frontline will solicit bids for the sale of
the vessel. If there are no bids that provide net proceeds that, together with
the termination payment, at least equal the allocated principal amount of the
Company’s term mortgage notes plus any interest accrued, Frontline will forward
to the appointed Indenture Trustee copies of all bids for the recharter of the
vessel. Unless instructed by all the holders of the Term Mortgage Notes to
accept a sale bid that is below the required minimum bid, Frontline will attempt
to recharter the vessel on such terms as it deems appropriate provided
that:






(i)
            such
      charter is at arms length;






(ii)
            such
      charter shall have a termination date no later than April 1, 2015;
      and






(iii)
            charterhire
      payable is sufficient to make the mandatory sinking fund payments together
      with all related interest, recurring fees and taxes for the vessel and the
      cost of insurance not maintained by the charterer, management fees and
      technical advisor’s fees and the fees of the designated representative,
      the indenture trustee and the collateral trustee as defined in the
      prospectus for the Registrant’s 8.52% First Preferred Mortgage Notes due
      2015.




The
International Tanker Market




The
market for international seaborne crude oil transportation services is highly
fragmented and competitive. Seaborne crude oil transportation services are
generally provided by two main types of operators: major oil company captive
fleets (both private and state-owned) and independent shipowner fleets. In
addition, several owners and operators pool their vessels together on an ongoing
basis, and such pools are available to customers to the same extent as
independently owned and operated fleets. Many major oil companies and other oil
trading companies, the primary charterers of the vessels owned or controlled by
the Owners, 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 the Owners engage.






3




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:






·
            Ultra
      large crude carriers “ULCC”- size range of approximately 320,000 to
      450,000 deadweight tons (dwt);




·
            Very
      large crude carriers “VLCC”- size range of approximately 200,000 to
      320,000 dwt;




·
            Suezmax-size
      range of approximately 120,000 to 200,000
dwt;




·
            Aframax-size
      range of approximately 60,000 to 120,000 dwt;
  and




·
            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 charter
hire rates are strongly influenced by the supply and demand for shipping
capacity.




Available
Information




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, D.C. 20549.  You may obtain
information on the operation from 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 our principal executive
offices at 114 West 47th Street, Suite 2310, New York, New York 10036 or at the
offices of our manager at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton,
Bermuda HM 08.




4


Item
1A.  Risk Factors




Our
capitalization is nominal and we have no source of income other than payments by
the Owners who are foreign corporations as described above.  As a
result, we are exposed to the same risk factors affecting the Owners. The
following is a summary of some of the risks which may adversely affect our
business, financial condition or results of operations. Our potential losses due
to exposure to the following risk factors are difficult to
quantify.




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




Three of
the Vessels are currently operated under the Chevron Charters. The Chevron
Charters each have a term expiring on April 1, 2015, subject to Chevron having
an option to terminate the charters for Sirius Voyager as discussed above. On
April 21, 2005, Chevron gave irrevocable notice of its intention to exercise its
first termination option effective April 1, 2006 on the single hull vessel,
Front Voyager. Pursuant to a bareboat charter agreement between CalPetro Bahamas
III and Front Voyager Inc., Front Voyager Inc. agreed to charter the Front
Voyager as of April 1, 2006 for an initial two year period with a further seven
annual optional periods. On March 25, 2009, Front Voyager Inc. exercised its
option to extend the charter for the second one year period beginning April 1,
2009. On January 5, 2010, Front Voyager Inc. gave notice of termination of the
bareboat charter to take effect on April 1, 2010. A Memorandum of Agreement,
dated March 15, 2010, has been signed regarding the sale of Front Voyager.
Delivery to the buyers is expected to occur in the first half of April
2010. We refer to Chevron and Frontline as the Charterers.




Historically,
the tanker industry has been highly cyclical, with volatility in profitability
and asset values resulting from changes in the supply of and demand for tanker
capacity. If the tanker market is depressed in the future, the Owners earnings
and available cash flow may decrease. The ability to re-charter the Vessels on
the expiration or termination of the Initial Charters and the charter rates
payable under any renewal or replacement charter 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.




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






·
            demand
      for oil and oil products;




·
            global
      and regional economic and political
conditions;




·
            changes
      in oil production and refining
capacity;




·
            environmental
      and other regulatory developments;




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




·
            changes
      in seaborne and other transportation
patterns.




The
factors that influence the supply of tanker capacity include:




·
            the
      number of newbuilding deliveries;






5








·
            the
      scrapping rate of older vessels;




·
            port
      or canal congestion;




·
            vessel
      casualties;




·
            price
      of steel;




·
            potential
      conversion of vessels to alternative
use;




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




·
            changes
      in environmental and other regulations that may effectively cause
      reductions in the carrying capacity of vessels or early obsolescence of
      tonnage.




The
Owners may not be able to arrange further charters at rates sufficient to meet
interest and principal payments due to us on the term loans. Should the Owners
default on payment of this interest and principal, the value of collateral to
the term loans may be insufficient to repay the Notes.




Because
the Owners’ Charters may expire or be terminated, they may incur additional
expenses and not be able to re-charter the Vessels profitably.




As
discussed above, Chevron may elect to terminate their charter for Sirius Voyager
and Front Voyager Inc has elected not to exercise its annual renewal options
with respect to the charter for the Front Voyager. We cannot predict at this
time any of the factors that Chevron will consider in deciding whether to
exercise the remaining termination option under the Chevron Charters. It is
likely, however, that Chevron would consider a variety of factors, which may
include whether a vessel is suitable to their requirements and whether
competitive charterhire rates are available in the open market at that
time.




In the
event that Chevron terminates the charter for Sirius Voyager, Chevron is
required under the terms of the charter to make a termination payment of $7.88
million to CalPetro Tankers (IOM) Limited. If Chevron terminates the
Charter, the Owner will attempt to arrange a replacement charter, or may sell
the Vessel to satisfy its obligations under the term loans. We cannot assure you
that the Owner will be able to meet these obligations upon the termination of a
charter.  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 the
Owner lower charter rates and would likely require the Owner to incur greater
expenses which may reduce the amounts available, if any, to pay principal and
interest on the term loans due to us. Should the Owners default on payment of
this interest and principal, the value of collateral to the term loans may be
insufficient to repay the Notes.




Front
Voyager Inc. one of our current charterers, is a wholly owned subsidiary of,
Frontline, which also is our manager. To the extent the vessel’s sale is not
completed, conflicts of interest might arise where Frontline would favor its own
interests over ours.




Front
Voyager Inc. the current charterer of the Front Voyager, is a wholly owned
subsidiary of Frontline.  As such, situations might arise where
Frontline may favor its own interest to the detriment of the Front Voyager’s
owner, CalPetro Bahamas III, or the Company’s security
holders.  Possible conflicts of interest may arise in re-negotiation
of our charter with Front Voyager Inc. or negotiations of disputes arising from
the Front Voyager Charter, where Frontline may act in its own best interests and
not our best interests.




6


The
Owners operate in the highly competitive international tanker market which could
affect their position at the end of the Charters or if the charterers terminate
the Charters earlier.




The
operation of tanker vessels and transportation of crude and petroleum products
is an extremely competitive business.  During the term of the Charters
with the charterers, the Owners are not exposed to the risk associated with this
competition.  At the end of the Charters or in the event that the
charterers terminate any Charter at any of the optional termination dates, the
Owners 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 the Owners
achieving lower revenues from their Suezmax oil tankers which will reduce the
amounts available, if any, to pay the principal and interest on the serial and
term loans due to us.  Should the Owners default on payment of this
interest and principal, the value of collateral to the serial and term loans may
be insufficient to repay the Notes.




Any
decrease in shipments of crude oil may adversely affect the Owners financial
performance at the end of the Charter or if Chevron terminates the Charter prior
to that time.




The
demand for our oil tankers derives primarily from demand for Arabian Gulf and
West African crude oil, which, in turn, primarily depends on the economies of
the world’s industrial countries and competition from alternative energy
sources. A wide range of economic, social and other factors can significantly
affect the strength of the world’s industrial economies and their demand for
crude oil from the mentioned geographical areas. One such factor is the price of
worldwide crude oil. The world’s oil markets have experienced high levels of
volatility in the last 25 years. If oil prices were to rise dramatically, the
economies of the world’s industrial countries may experience a significant
downturn.




Any
decrease in shipments of crude oil from the above mentioned geographical areas
would have a material adverse effect on the Owners’ financial performance. Among
the factors which could lead to such a decrease are:






·
            increased
      crude oil production from other
areas;




·
            increased
      refining capacity in the Arabian Gulf or West
  Africa;




·
            increased
      use of existing and future crude oil pipelines in the Arabian Gulf or West
      Africa;




·
            a
      decision by Arabian Gulf or West African oil-producing nations to increase
      their crude oil prices or to further decrease or limit their crude oil
      production;




·
            armed
      conflict in the Arabian Gulf and West Africa and political or other
      factors; and




·
            the
      development and the relative costs of nuclear power, natural gas, coal and
      other alternative sources of
energy.




The
supply of vessels generally increases with deliveries of new vessels and
decreases with the scrapping of older vessels, conversion of vessels to other
uses, such as floating production and storage facilities, and loss of tonnage as
a result of casualties. Currently there is significant newbuilding activity with
respect to virtually all sizes and classes of vessels. If the amount of tonnage
delivered exceeds the number of vessels being scrapped, vessel capacity will
increase. As discussed below, if the supply of vessel capacity increases and the
demand for vessel capacity does not, the charter rate paid for the Vessels as
well as the value of
the Vessels could materially decline. Such a decline in charter rate and vessel
value would likely have an adverse effect on the Owners revenues and
profitability at the end of the Charter or if Chevron terminates the Charter
prior to that time which in turn could lead to defaults in payment.






7




An
over-supply of tanker capacity may lead to reductions in charter rates, vessel
values, and profitability when the Charters expires or is terminated by
Chevron.




The
market supply of tankers is affected by a number of factors such as demand for
energy resources, oil, and petroleum products, as well as strong overall
economic growth in parts of the world economy including Asia. If the capacity of
new ships delivered exceeds the capacity of tankers being scrapped and lost,
tanker capacity will increase. If the supply of tanker capacity increases and
the demand for tanker capacity does not increase correspondingly, charter rates
could materially decline. A reduction in charter rates may have a material
adverse effect on the Owners’ results of operations if the Charters expire or
are terminated.




Disruptions
in world financial markets and the resulting governmental action in the United
States and in other parts of the world could have a material adverse impact on
the Owners results of operations, financial condition and cash
flows.




Over the
recent period, global financial markets have experienced extraordinary
disruption and volatility following adverse changes in the global credit
markets. The credit markets in the United States have experienced significant
contraction, deleveraging and reduced liquidity, and governments around the
world have taken highly significant measures in response to such events and may
implement other significant responses in the future.




Securities
and futures markets and the credit markets are subject to comprehensive
statutes, regulations and other requirements. The Commission, other regulators,
self-regulatory organizations and exchanges have enacted temporary emergency
regulations and may take other extraordinary actions in the event of market
emergencies and may effect permanent changes in law or interpretations of
existing laws. Recently, a number of financial institutions have experienced
serious financial difficulties and, in some cases, have entered into bankruptcy
proceedings or are in regulatory enforcement actions. These difficulties have
resulted, in part, from declining markets for assets held by such institutions,
particularly the reduction in the value of their mortgage and asset-backed
securities portfolios. These difficulties have been compounded by a general
decline in the willingness by banks and other financial institutions to extend
credit.




The
Owners face risks attendant to changes in economic environments, changes in
interest rates and instability in securities markets around the world, among
other factors. Major market disruptions and the current adverse changes in
market conditions and regulatory climate in the United States and worldwide may
adversely affect the Owners businesses or impair their ability to borrow amounts
under any future financial arrangements. We cannot predict how long the current
market conditions will last. However, these recent and developing economic and
governmental factors, including proposals to reform the financial system, may
have a material adverse effect on the Owners results of operations, financial
condition or cash flows.




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.






8


The
Owners’ 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 the
Vessels operate and the country or countries in which such vessels are
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.  These
regulations include the U.S. Oil Pollution Act of 1990, or OPA, the United
States Clean Air Act and United States Clean Water Act, the United States Marine
Transportation Security Act of 2002, the International Convention on Civil
Liability for Oil Pollution Damage of 1969, as amended, or CLC, the
International Convention for the Prevention of Pollution from Ships of 1975, the
International Convention for the Safety of Life at Sea of 1974, or SOLAS, the
International Convention on Load Lines of 1966 and implementing regulations
adopted by the International Maritime Organization, or IMO (the United Nations
agency for maritime safety and the prevention of pollution by vessels), the
European Union, and other international, national and local regulatory
bodies.




In
addition, vessel classification societies also impose significant safety and
other requirements on our vessels. In complying with current and future
environmental requirements, the Owners 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 the Owners to incur significant capital expenditures on their
Vessels to keep them in compliance, or even to scrap or sell certain vessels
altogether. For example, various jurisdictions, including the United States, are
considering or have enacted legislation imposing more stringent requirements on
air emissions and ballast water discharges from vessels.




Many of
these requirements are designed to reduce the risk of oil spills and other
pollution, and compliance with these requirements can be costly. These
requirements also can affect the resale value or useful lives of the Vessels’,
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, the Owners 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 vessels or otherwise in connection with our
current or historic operations.  The Owners could also incur
substantial penalties, fines and other civil or criminal sanctions, including in
certain instances seizure or detention of our vessels, 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, CLC, 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.




OPA also
provides for the scheduled phase-out of all non-double-hull tankers that carry
oil in bulk in United States waters. The IMO and the European Union, or EU, have
adopted separate phase-out schedules applicable to single-hull tankers operating
in international and EU waters, respectively. These regulations could reduce the
demand for single-hull tankers, force the remaining single-hull vessels into
less desirable trading routes, increase the number of vessels trading in routes
open to single-hull vessels and could increase demands for further restrictions
in the remaining jurisdictions that permit the operation of these
vessels. As a result, single-hull vessels are likely to be chartered less
frequently and at lower rates.






9




In recent
years, the IMO and EU have both accelerated their existing non-double-hull
phase-out schedules in response to highly publicized oil spills and other
shipping incidents involving companies unrelated to us. Future accidents may be
expected in the industry, and such accidents or other events may be expected to
result in the adoption of even stricter laws and regulations, which could limit
the owners operations or their ability to do business and which could have a
material adverse effect on their business and financial results.




Extensive
and changing environmental laws and other regulations, compliance with which may
entail significant expenses including expenses for ship modifications and
changes in operating procedures and therefore affect the operation of the
Vessels.  Although the charterers are responsible for all operational
matters and bear all these expenses during the term of the current Charters,
these expenses could have an adverse effect on the Owners’ business operations
at any time after the expiration or termination of the Charters or in the event
the charterers fail to make a necessary payment.




An
acceleration of the current prohibition to trade deadlines for non-double hull
tankers could adversely affect the Owners operations.




One of
the Vessels is a single hull tanker. The United States, the European Union and
the International Maritime Organization, or IMO, have all imposed limits or
prohibitions on the use of these types of tankers in specified markets after
certain target dates, depending on certain factors such as the size of the
vessel and the type of cargo.  In the case of our single hull tanker,
these phase out dates range from 2010 to 2015.  As of April 15, 2005,
the Marine Environmental Protection Committee of the IMO has amended the
International Convention for the Prevention of Pollution from Ships to
accelerate the phase out of certain categories of single hull tankers, including
the types of vessel in our fleet, from 2015 to 2010 unless the relevant flag
states extend the date. This change could result in non-double hull tankers
being unable to trade in many markets after 2010. The phase out of single hull
tankers will also reduce the demand for single hull tankers, force the remaining
single hull tankers into employment on less desirable trading routes and
increase the number of tankers trading on those routes.  As a result,
single hull tankers are likely to be chartered less frequently and at lower
rates.  Moreover, the IMO may still adopt regulations in the future
that could adversely affect the useful life of the non-double hull vessel as
well as the Owner’s ability to generate income which will affect the Owner’s
ability to service its debt to us.




The
Owners may not have adequate insurance in the event existing charters are
terminated.




There are
a number of risks associated with the operation of ocean-going vessels,
including mechanical failure, collision, property loss and 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 Charters, the charterers
bear all risks associated with the operation of the Vessels including the total
loss of the Vessels. However, we cannot assure holders of the Notes that the
Owners will adequately insure against all risks or in the event the Charters
expire or are terminated. The Owners may not be able to obtain adequate
insurance coverage at reasonable rates for the Vessels in the future and the
insurers may not pay particular claims.




10


Acts
of piracy on ocean-going vessels have recently increased in frequency, which
could adversely affect the Owners business.




Acts of
piracy have historically affected ocean-going vessels trading in regions of the
world such as the South China Sea and in the Gulf of Aden off the coast of
Somalia. Throughout 2008 and 2009, the frequency of piracy incidents against
commercial shipping vessels increased significantly, particularly in the Gulf of
Aden off the coast of Somalia. For example, in November 2008, the M/V Sirius Star, a tanker vessel
not affiliated with any of the Owners, was captured by pirates in the Indian
Ocean while carrying crude oil estimated to be worth $100 million. If these
pirate attacks result in regions in which the owners Vessel are deployed being
characterized as “war risk” zones by insurers, as the Gulf of Aden temporarily
was in May 2008, premiums payable for such coverage could increase significantly
and such insurance coverage may be more difficult to obtain. In addition, crew
costs, including due to employing onboard security guards, could increase in
such circumstances. The Owners may not be adequately insured to cover losses
from these incidents, which could have a material adverse effect on us. In
addition, any of these events may result in loss of revenues, increased costs
and decreased cash flows to Chevron and Front Voyager Inc, which could impair
its ability to make payments to the Owners under Charter.




The
Owners are highly dependent on Chevron and Chevron Corporation and
Frontline.




The
Owners are highly dependent on the performance by Chevron and, if the sale is
not completed, Front Voyager Inc., a subsidiary of Frontline, of their
obligations under the Charters and by Chevron’s guarantor, the Chevron
Corporation, of its obligations under its guarantee. A failure by Chevron,
Chevron Corporation or Front Voyager Inc to perform their obligations could
result in the inability of the Owners to service the term loans. If the Notes
holders had to enforce the mortgages securing the Notes, they may not be able to
recover the principal and interest owed to them.




The
Owners may not be able to pay down their debt in the future.




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




Governments
could requisition the Vessels during a period of war or emergency, resulting in
a loss of earnings.




A
government could requisition for title or seize the Vessels. Requisition for
title occurs when a government takes control of a vessel and becomes her
owner.  Also, a government could requisition the Vessels 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. This amount could be
materially less than the charterhire that would have been payable otherwise. In
addition, the Owners would bear all risk of loss or damage to their vessels
under requisition for hire Government requisition of the Vessels would
negatively impact the revenues of the Owners and therefore impact their ability
to service the debt due to us.




11


The
Owners operations outside the United States expose them to global risks that may
interfere with the operation of their Vessel.




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




The
Vessels may call on ports located in countries that are subject to restrictions
imposed by the United States government.




The
Charters are bareboat charters and, from time to time, the Vessels may call on
ports located in countries subject to sanctions and embargoes imposed by the
United States government and countries identified by the United States
government as state sponsors of terrorism. Although these sanctions and
embargoes do not prevent their Vessel from making calls to ports in these
countries, potential investors could view such port calls negatively, which
could adversely affect their reputation and the market for their Notes. Investor
perception of the value of the Notes may be adversely affected by the
consequences of war, the effects of terrorism, civil unrest and governmental
actions in these and surrounding countries.




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
are not listed on any national securities exchange 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 you that an active trading market exists
for the Notes or that any market for the Notes will be liquid.




Item
      1B.
            Unresolved
      Staff Comments




None.




Item
      2.
            Properties




We have
no property. The Notes are our obligations and we loaned the proceeds of the
sales to the Owners, by means of term and serial loans, to facilitate the
funding of the acquisition of the Vessels.  Other than the Vessels
described below, the Owners have no property.




Owner
            Vessel
            Construction
            Delivery
      Date
            Approximate
      dwt.CalPetro
      Tankers (Bahamas I) Limited
            Cygnus
      Voyager
            Double
      Hull
            March
      1993
            150,000CalPetro
      Tankers (Bahamas II) Limited
            Altair
      Voyager
            Double
      Hull
            August
      1993
            130,000CalPetro
      Tankers (Bahamas III) Limited
            Front
      Voyager*
            Single
      Hull
            February
      1992
            150,000CalPetro
      Tankers (IOM) Limited
            Sirius
      Voyager
            Double
      Hull
            October
      1994
            150,000







*Sold per
Memorandum of Agreement, dated March 15, 2010.







Item
      3.
            Legal
      Proceedings




We are
not a party to any material pending legal proceedings other than ordinary
routine litigation incidental to our business, to which we are a party. In the
future, we may be subject to legal proceedings and claims in the ordinary course
of business which, even if lacking merit, could result in the expenditure by us
of significant financial and managerial resources.




Item
      4.
            (Removed
      and Reserved)




12


PART
II







Item
      5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities




(a)
            There
      is no established trading market for our Common
  Stock.




(b)
            As
      of March 19, 2010, there was one (1) holder of record of our Common
      Stock.




(c)
            There
      were no repurchases of our Common
Stock.




Item
      6.
            Selected
      Financial Data




The
selected statement of operations and retained earnings data of the Company with
respect to the fiscal years ended December 31, 2009, 2008 and 2007, and the
balance sheet data as at December 31, 2009 and 2008 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 fiscal years ended
December 31, 2006 and 2005 and the selected balance sheet data as at December
31, 2007, 2006 and 2005 have been derived from audited financial statements of
the Company not included herein.




Year
      Ended December 31,($’000s
      except per share data)
            2009
            2008
            2007
            2006
            2005Total
      operating revenues
            6,124
            6,961
            7,876
            8,798
            9,793Net
      income
            -
            -
            -
            -
            -Net
      income per share
            -
            -
            -
            -
            -Total
      assets
            69,512
            79,686
            89,470
            100,625
            112,905Long
      term liabilities
            57,783
            68,039
            78,009
            88,381
            98,477Cash
      dividends declared per share
            -
            -
            -
            -
            -





The
following table sets forth a summary of quarterly unaudited results of
operations for the years ended December 31, 2009 and 2008.




($’000s)
            
            First
              Quarter
            Second
              Quarter
            Third
              Quarter
            Fourth
              Quarter2009Operating
      revenues
            
            1,689
            1,480
            1,483
            1,472Expenses
            
            (1,689)
            (1,480)
            (1,483)
            (1,472)Net
      income
            
            -
            -
            -
            -2008Operating
      revenues
            
            1,895
            1,693
            1,693
            1,680Expenses
            
            (1,895)
            (1,693)
            (1,693)
            (1,680)Net
      income
            
            -
            -
            -
            -





13


Item
7.  Management’s Discussion and Analysis of Financial Condition and Results
of Operations




Business
Strategy






California
Petroleum




We were
organized to issue, as agent on behalf of the Owners, the Notes and subsequently
loan the proceeds of the sale to the Owners. Our only sources of funds with
respect to the Notes are receipts of principal and interest on the related loans
receivable from each Owner. General and administrative expenses comprising
trustee fees, legal fees, agency fees and other costs incurred by us are billed
to the Owners. The net result for the year is neither a gain nor a loss, the
detail relating to such result is set forth in the Statement of Operations and
Retained Earnings included herein.




The
Owners




The
Owners’ strategy has been to acquire the Vessels and charter them to Chevron and
Frontline under bareboat charters which are expected to provide:




(a)
            charterhire
      payments which we and the Owners expect will be sufficient to pay, so long
      as the Charters are in effect:






i.
            the
      Owners’ obligations under the loans for acquiring the
    Vessels;




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
      Vessels that are to be paid by the
Owners.




(b)
            termination
      payments sufficient to make sinking fund and interest payments on the term
      mortgage notes, 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 Vessels will be maintained in accordance with the good commercial
      maintenance practices required by the Charters; and to arrange for vessel
      management and remarketing services to be available in case any Charter is
      terminated by Chevron or Frontline, or any Vessel is for any other reason
      returned to the possession and use of the
  Owners.




Results
of Operations




Year
ended December 31, 2009 compared to the year ended December 31,
2008




Interest
income




(in
      thousands of $)
            2009
            
            2008Interest
      income
            6,097
            
            6,937


Interest
income decreased in 2009 compared to 2008 primarily due to a decrease in the
principal balance of loans receivable. On April 1, 2009, the Owners repaid total
principal of $9.9 million on the Loans.




14


Expenses
reimbursed




(in
      thousands of $)
            2009
            
            2008Expenses
      reimbursed
            27
            
            24


General
and administrative expenses which are incurred by us are billed to the Owners.
Refer to the discussion on administrative expenses below.




Interest
expense




(in
      thousands of $)
            2009
            
            2008Interest
      expense
            (6,009)
            
            (6,849)


Interest
expense decreased compared to 2008 primarily due to a decrease in the principal
balance of the Notes. On April 1, 2009, we repaid total principal of $9.9
million on the Notes.




Administrative
expenses




(in
      thousands of $)
            2009
            
            2008Administrative
      expenses
            (27)
            
            (24)


General
and administrative expenses which comprise trustee fees, audit fees and other
costs incurred by us are billed to the Owners.








Year
ended December 31, 2008 compared to the year ended December 31,
2007




Interest
income




(in
      thousands of $)
            2008
            
            2007Interest
      income
            6,937
            
            7,779


Interest
income decreased in 2008 compared to 2007 primarily due to a decrease in the
principal balance of loans receivable. On April 1, 2008, the Owners repaid total
principal of $9.5 million on the Loans.




Expenses
reimbursed




(in
      thousands of $)
            2008
            
            2007Expenses
      reimbursed
            24
            
            97









15




General
and administrative expenses which are incurred by us are billed to the Owners.
Refer to the discussion on administrative expenses below.






Interest
expense




(in
      thousands of $)
            2008
            
            2007Interest
      expense
            (6,849)
            
            (7,691)


Interest
expense decreased compared to 2007 primarily due to a decrease in the principal
balance of the Notes. On April 1, 2008, we repaid total principal of $9.5
million on the Notes.






Administrative
expenses




(in
      thousands of $)
            2008
            
            2007Administrative
      expenses
            (24)
            
            (97)


General
and administrative expenses which comprise trustee fees, audit fees and other
costs incurred by us are billed to the Owners. Administrative expenses are lower
in 2008 as a result of a reduction in audit fees and an over accrual in
2007.




Liquidity
and Capital Resources




We are a
passive entity, and our activities are limited to collecting cash from the
Owners and making repayments on the Notes. We have no source of liquidity and no
capital resources other than the cash receipts attributable to the Term
Loans.




Critical
Accounting Policies




Our
principal accounting policies are described in Note 2 to the financial
statements included in Item 8 of this Form 10-K.




Recently
Issued Accounting Standards




There
were no new accounting standards implemented in 2009 that had an impact on our
results or new accounting standards to be implemented in the future that we
expect to have an impact on our results when adopted.




Tabular
disclosure of contractual obligations




As at
December 31, 2009, we had the following contractual obligations and
commitments:




(in
      $’000)
            Less
      than
              1
      year
            1-3
      years
            3-5
      years
            More
      than
              5
      years
            TotalTerm
      Mortgage Notes (8.52%)
            10,256
            20,692
            20,992
            16,099
            68,039Interest
      on Term Mortgage Notes
            5,360
            8,086
            4,535
            686
            18,667Total
      contractual obligations
            15,616
            28,778
            25,527
            16,785
            86,706










16




Item 7A.  Quantitative
and Qualitative Disclosures about Market Risk




None of
the instruments issued by us are for trading purposes.  We are exposed
to business risk inherent in the international tanker market as outlined in
“Item 1A. Risk Factors.”




Quantitative
information about the instruments as at December 31, 2009 is as
follows:




Term
Loans




The
principal balances of the Term Loans made to the Owners earn interest at a rate
of 8.52% per annum and are to be repaid over a remaining ten-year period
beginning April 1, 2006. The loans are reported net of the related discounts,
which are amortized over the term of the loans.




The table
below provides the final principal payments on the term loans if none of the
Charters are terminated and if the charter for Sirius Voyager is terminated in
2011. The information in the column entitled “Charters not terminated” takes
into consideration the effect of the termination of the bareboat charter between
CalPetro Tankers Bahamas III and Chevron, which was terminated with effect from
April 1, 2006.




(in
      thousands of $)
              Scheduled
      payment date
            Charters
              not
              terminated
            Charter
      terminated
              2011April
      1, 2010
            10,256
            8,671April
      1, 2011
            10,316
            7,204April
      1, 2012
            10,376
            5,650April
      1, 2013
            10,456
            6,140April
      1, 2014
            10,536
            6,670April
      1, 2015
            16,099
            33,70468,039
            68,039





The
outstanding amount of Term Loans at December 31, 2009 was $68.0
million.




Item
      8.
            Financial
      Statements and Supplementary Data




PageReport
      of PricewaterhouseCoopers AS, Independent Registered Public Accounting
      Firm
            18Report
      of Grant Thornton LLP,  Independent Registered Public Accounting
      Firm
            19Balance
      Sheets as of December 31, 2009 and 2008
            20Statements
      of Operations and Retained Earnings for the years ended December 31, 2009,
      2008 and 2007
            21Statements
      of Cash Flows for the years ended December 31, 2009, 2008 and
      2007
            22Notes
      to Financial Statements
            23





17


Report
of Registered Public Accounting Firm




To
the Board of Directors and Stockholder




California
Petroleum Transport Corporation




We have
audited the accompanying balance sheets of California Petroleum Transport
Corporation (the “Company”) as of December 31, 2009 and December 31, 2008, the
related statements of operations and retained earnings, and cash flows for each
of the years then ended.  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 audit. The financial
statements of the Company as of December 31, 2007 and for the year then ended
were audited by other auditors whose report dated March 28, 2008 expressed an
unqualified opinion on those statements.




We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit provides
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 California Petroleum Transport
Corporation as of December 31, 2009 and December 31, 2008 and the results of its
operations and retained earnings and cash flows for each of the years
then ended, in conformity with accounting principles generally accepted in
the United States of America.




/s/
PricewaterhouseCoopers AS




PricewaterhouseCoopers
AS


Oslo,
Norway





March 19,
2010




18









Report
of Independent Registered Public Accounting Firm










To the
Board of Directors


California
Petroleum Transport Corporation




We have
audited the accompanying statements of operations and retained earnings, and
cash flows of California Petroleum Transport Corporation for the year ended
December 31, 2007. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.




We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit 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 audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the results of operations and cash flows of California
Petroleum Transport Corporation for the year ended December 31, 2007, in
conformity with accounting principles generally accepted in the United States of
America.








/s/ Grant
Thornton LLP





Grant
Thornton LLP


New York,
New York


March 28,
2008







19


California
Petroleum Transport Corporation


Balance
Sheets as of December 31, 2009 and 2008


(in
thousands of US$)




2009
            
            
            2008ASSETSCurrent
      assets:Cash
      and cash equivalents
            
            
            1
            
            
            
            1Current
      portion of term loans receivable
            
            
            10,256
            
            
            
            9,970Interest
      receivable
            
            
            1,449
            
            
            
            1,662Other
      current assets
            
            
            23
            
            
            
            14Total
      current assets
            
            
            11,729
            
            
            
            11,647Term
      loans receivable, less current portion
            
            
            57,317
            
            
            
            67,485Deferred
      charges
            
            
            466
            
            
            
            554Total
      assets
            
            
            69,512
            
            
            
            79,686LIABILITIES
      AND STOCKHOLDER’S EQUITYCurrent
      liabilities:Accrued
      interest
            
            
            1,449
            
            
            
            1,662Current
      portion of term mortgage notes
            
            
            10,256
            
            
            
            9,970Other
      current liabilities
            
            
            23
            
            
            
            14Total
      current liabilities
            
            
            11,728
            
            
            
            11,646Term
      mortgage notes, less current portion
            
            
            57,783
            
            
            
            68,039Total
      liabilities
            
            
            69,511
            
            
            
            79,685Stockholder’s
      equityShare
      capital
            
            
            1
            
            
            
            1Total
      liabilities and stockholder’s equity
            
            
            69,512
            
            
            
            79,686





See
accompanying notes to the financial statements.





20


California
Petroleum Transport Corporation


Statements
of Operations and Retained Earnings for the years ended December 31, 2009, 2008
and 2007


(in
thousands of US$)




2009
            
            
            2008
            
            
            2007RevenueInterest
      income
            
            
            6,097
            
            
            
            6,937
            
            
            
            7,779Expenses
      reimbursed
            
            
            27
            
            
            
            24
            
            
            
            97Total
      operating revenues
            
            
            6,124
            
            
            
            6,961
            
            
            
            7,876ExpensesGeneral
      and administrative expenses
            
            
            (27
            )
            
            
            (24
            )
            
            
            (97
            )Amortization
      of debt issue costs
            
            
            (88
            )
            
            
            (88
            )
            
            
            (88
            )Interest
      expense
            
            
            (6,009
            )
            
            
            (6,849
            )
            
            
            (7,691
            )(6,124
            )
            
            
            (6,961
            )
            
            
            (7,876
            )Net
      income
            
            
            -
            
            
            
            -
            
            
            
            -Retained
      earnings, beginning of year
            
            
            -
            
            
            
            -
            
            
            
            -Retained
      earnings, end of year
            
            
            -
            
            
            
            -
            
            
            
            -





See
accompanying notes to the financial statements.





21


California
Petroleum Transport Corporation


Statements
of Cash Flows for the years ended December 31, 2009, 2008 and 2007


(in
thousands of US$)




2009
            
            
            2008
            
            
            2007Net
      income
            
            
            -
            
            
            
            -
            
            
            
            -Adjustments
      to reconcile net income to net cash provided
              by
      operating activities:Amortization
      of deferred debt issue costs
            
            
            88
            
            
            
            88
            
            
            
            88Changes
      in operating assets and liabilities:Interest
      receivable
            
            
            213
            
            
            
            202
            
            
            
            233Other
      current assets
            
            
            9
            
            
            
            56
            
            
            
            (21
            )Accrued
      interest
            
            
            (213
            )
            
            
            (202
            )
            
            
            (233
            )Other
      current liabilities
            
            
            (9
            )
            
            
            (56
            )
            
            
            21Net
      cash provided by operating activities
            
            
            88
            
            
            
            88
            
            
            
            88Cash
      flows from investing activitiesCollections
      on loans receivable
            
            
            9,882
            
            
            
            9,438
            
            
            
            10,942Net
      cash provided by investing activities
            
            
            9,882
            
            
            
            9,438
            
            
            
            10,942Cash
      flows from financing activitiesRepayments
      of mortgage notes
            
            
            (9,970
            )
            
            
            (9,526
            )
            
            
            (11,030
            )Net
      cash used in financing activities
            
            
            (9,970
            )
            
            
            (9,526
            )
            
            
            (11,030
            )Net
      change in cash and cash equivalents
            
            
            -
            
            
            
            -
            
            
            
            -Cash
      and cash equivalents at beginning of year
            
            
            1
            
            
            
            1
            
            
            
            1Cash
      and cash equivalents at end of year
            
            
            1
            
            
            
            1
            
            
            
            1Supplemental
      disclosure of cash flow information:Interest
      paid
            
            
            6,222
            
            
            
            7,051
            
            
            
            7,924





See
accompanying notes to the financial statements.





22


California
Petroleum Transport Corporation


Notes
to Financial Statements




1.           DESCRIPTION OF BUSINESS AND BASIS OF
PRESENTATION




California
Petroleum Transport Corporation (the “Company”), which is incorporated in
Delaware, is a special purpose corporation that was organized solely for the
purpose of issuing, as agent on behalf of CalPetro Tankers (Bahamas I) Limited,
CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited
and CalPetro Tankers (IOM) Limited (each an “Owner” and, together the “Owners”),
serial mortgage notes and the term mortgage notes (together, “the Notes”) as
full recourse obligations of the Company and loaning the proceeds of the sale of
the Notes to the Owners by means of serial loans (“Serial Loans”) and term loans
(“Term Loans”), to facilitate the funding of the acquisition of four vessels
(the “Vessels”) from Chevron Transport Corporation (“Chevron”).




The
Owners have chartered three of the Vessels to Chevron until 2015 under bareboat
charters that are expected to provide sufficient payments to cover the Owners’
obligations to the Company. Chevron can terminate a charter at specified dates
prior to the expiration of the charter, provided that it gives the Owner the
requisite notice.




On April
21, 2005, pursuant to Clause 2 (a) (ii) of the bareboat charter dated April 5,
1995 between CalPetro Tankers (Bahamas III) Limited and Chevron, the Owner
received irrevocable notice from Chevron regarding the termination of the
bareboat charter of the vessel Front Voyager, a single hulled vessel on April 1,
2006. Under the terms of the bareboat charter between Chevron and Calpetro
Tankers (Bahamas III) Limited, Chevron paid a termination fee of $5,050,000. As
manager to CalPetro Tankers (Bahamas III) Limited, Frontline Ltd (“Frontline”)
was obligated to find an acceptable replacement charter as defined by the
indenture governing the issue of the Notes that were issued on behalf of the
Calpetro Tankers (Bahamas III) Limited and three affiliated companies. Pursuant
to a bareboat charter agreement between CalPetro Tankers (Bahamas III) Limited
and Front Voyager Inc., a wholly owned subsidiary of Frontline, Front Voyager
Inc. agreed to charter the Front Voyager as of April 1, 2006 for an initial two
year period (the “Initial Period”) with a further seven annual optional periods.
The charterhire payable for the Initial Period was $5,050,000 which was prepaid
in full on March 31, 2006. The Initial Period expired on April 1, 2008 and Front
Voyager Inc exercised the option to extend the charter for an additional year.
On March 25, 2009, Front Voyager Inc. exercised its option to extend the charter
for the second one year period beginning April 1, 2009.On January 5, 2010, Front
Voyager Inc. exercised its option to terminate the charter on April 1,
2010.  Front Voyager Inc. is required to pay a termination fee
calculated in accordance with the bareboat charter, which will enable Bahamas
III to satisfy its estimated obligations. A Memorandum of Agreement, dated
March 15, 2010, has been signed regarding the sale of Front Voyager.
Delivery to the buyers is expected to occur in the first half of April
2010.




The Front
Voyager is a single hull vessel. The United States, the European Union and the
International Maritime Organization, or the IMO, have all imposed limits or
prohibitions on the use of these types of tankers in specified markets after
certain target dates which range from 2010 to 2015. In December 2003, the Marine
Environmental Protection Committee of the IMO adopted a proposed amendment to
the International Convention for the Prevention of Pollution from Ships to
accelerate the phase out of single hull tankers from 2015 to 2010 unless the
relevant flag states extend the date to 2015. Management does not know whether
the non-double hull vessel will be subject to this accelerated phase-out, but
this change could result in the Vessel being unable to trade in many markets
after 2010. Moreover, the IMO may still adopt regulations in the future that
could adversely affect the useful life of the non-double hull vessel as well as
the Owner’s ability to generate income which will affect the Owner’s ability to
service its debt to the Company.




23


The
Company’s only source of funds with respect to the Notes is the payment of the
principal and interest on the loans by the Owners. The Company does not have any
other source of capital for payment of the Notes. The Owners’ only sources of
funds with respect to its obligation to the Company are the payments by Chevron
and Frontline, including termination payments and investment income. The Owners
do not have any other source of capital for payment of the loans.




The
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”). These
statements reflect the net proceeds from the sale of the Term Mortgage Notes
together with the net proceeds from sale of the Serial Mortgage Notes having
been applied by way of long-term loans to the Owners to fund the acquisition of
the Vessels from Chevron.




2.           PRINCIPAL ACCOUNTING
POLICIES




(a)           Revenue and expense
recognition




Interest
receivable on the Serial Loans and on the Term Loans is accrued on a daily
basis.  Interest payable on the Term Mortgage Notes is accrued on a
daily basis. The Owners reimburse the Company for general and administrative
expenses incurred on their behalf.




(b)           Deferred
charges




Deferred
charges represent the capitalization of debt issue costs. These costs are
amortized over the term of the Notes to which they relate on a straight line
basis, which is not materially different to the effective interest rate
method.




(c)           Reporting
and functional currency




The
reporting and functional currency is the United States dollar.




(d)           Use
of estimates




The
preparation of financial statements in accordance with US GAAP 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 those
estimates.




(e)           Recently
Issued Accounting Pronouncements




There
were no new accounting standards implemented in 2009 that had an impact on our
results or new accounting standards to be implemented in the future that we
expect to have an impact on our results when adopted.




3.           TERM LOANS




The
principal balances of the Term Loans earn interest at a rate of 8.52% per annum
and are to be repaid over a remaining ten-year period beginning April 1, 2006.
The loans are reported net of the related discounts, which are amortized over
the term of the loans.




4.           TERM
LOANS COLLATERAL




24


The Term
Loans are collateralized by first preferred mortgages on the Vessels to the
Company. The earnings and insurance relating to the Vessels subject to the
charters with Chevron have been collaterally assigned pursuant to an assignment
of earnings and insurance to the Company, which in turn has assigned such
assignment of earnings and insurance to The Bank of New York Mellon as the
collateral trustee (the “Trustee”). The charters with Chevron and the Chevron
Guarantees (where the obligations of Chevron are guaranteed by Chevron
Corporation) relating to the Vessels have been collaterally assigned pursuant to
the assignment of initial charter and assignment of initial charter guarantee to
the Company, which in turn has assigned such assignments to the collateral
trustee.  The capital stock of each of the Owners has been pledged to
the Company pursuant to stock pledge agreements which have also been
collaterally assigned to the Trustee.




The Front
Voyager was bareboat chartered to Front Voyager Inc. as of April 1, 2006 upon
its redelivery from Chevron by virtue of a bareboat charter dated March 31, 2006
by and between CalPetro Tankers (Bahamas III) Limited and Front Voyager Inc.
(the “Front Voyager Charter”). The earnings and insurance relating to the Front
Voyager Charter have been collaterally assigned pursuant to an assignment of
earnings and insurance to the Company, which in turn have assigned such
assignment of earnings and insurance to the Trustee. The Front Voyager Charter
has been collaterally assigned pursuant to an assignment of charter to the
Company, which in turn has assigned such assignment to the Trustee.




5.           DEFERRED
CHARGES




(in
      thousands of $)
            2009
            2008Debt
      arrangement fees
            3,400
            3,400Accumulated
      amortization
            (2,934)
            (2,846)466
            554


6.           TERM
MORTGAGE NOTES




(in
      thousands of $)
            2009
            20088.52%
      Term Mortgage Notes due 2015
            68,039
            78,009Total
      debt
            68,039
            78,009Less:
      short-term portion
            (10,256)
            (9,970)57,783
            68,039


The
outstanding debt as of December 31, 2009 is repayable as follows:




(in
      thousands of $)2010
            10,2562011
            10,3162012
            10,3762013
            10,4562014
            10,5362015
      and later
            16,099Total
      debt
            68,039





The term
mortgage notes bear interest at a rate of 8.52% per annum. Principal is
repayable on the term mortgage notes in accordance with a remaining ten-year
sinking fund schedule beginning April 1, 2006.  Interest is payable
semi-annually. The term mortgage notes include certain covenants such as
restriction on the payment of dividends and making additional loans or advances
to affiliates. At December 31, 2009 and 2008, the Company was in compliance with
these covenants.




25


As of
December 31, 2009, the effective interest rate for the Notes of the Company was
8.52%.




The term
mortgage notes are subject to redemption through operation of the mandatory
sinking fund on April 1 of each year, commencing on April 1, 2006, to and
including April 1, 2015, according to the applicable schedule of sinking fund
payments set forth herein. The sinking fund redemption price is 100% of the
principal amount of term mortgage notes being redeemed, together with interest
accrued to the date fixed for redemption. If a Charter is terminated, the
scheduled mandatory sinking fund payments on the term mortgage notes will be
revised so that the allocated principal amount of the term mortgage notes 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 $7,000,000, for any of the
double-hulled Vessels, or $5,500,000 for the single hulled Vessel.




The table
below provides the final principal payments on the term loans if none of the
Charters are terminated and if the charter for Sirius Voyager is terminated in
2011. The information in the column entitled “Charters not terminated” takes
into consideration the effect of the termination of the bareboat charter between
CalPetro Tankers Bahamas III and Chevron, which was terminated with effect from
April 1, 2006.




(in thousands of
      $)
              Scheduled
      payment date
            
            
            Charter
              not
              terminated
            Charter
              terminated
              20112010
            
            
            10,256
            8,6712011
            
            
            10,316
            7,2042012
            
            
            10,376
            5,6502013
            
            
            10,456
            6,1402014
            
            
            10,536
            6,6702015
      and later
            
            
            16,099
            33,70468,039
            68,039





7.           SHARE
CAPITAL




(in
      thousands of $)
            2009
            2008Authorized,
      issued and fully paid share capital:1,000
      shares of $1.00 each
            1
            1


8.           FINANCIAL
INSTRUMENTS




Fair
values




The
carrying value and estimated fair value of the Company’s financial instruments
at December 31, 2009 and 2008 are as follows:




(in
      thousands of $)
            2009
              Fair
              Value
            2009
      Carrying Value
            2008
              Fair
              Value
            2008
      Carrying ValueCash
      and cash equivalents
            1
            1
            1
            18.52%
      Term Mortgage Notes due 2015
            80,218
            68,039
            89,376
            78,009


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




26


The
carrying value of cash and cash equivalents, which are highly liquid, is a
reasonable estimate of fair value.




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




Concentrations
of risk




The
Company’s only source of funds for the repayment of the principal and interest
on the Notes are the repayments from the Owners. The Owners only source of funds
for the repayment of the principal and interest on the loans from the Company
are from charterhire payments from Chevron and Front Voyager Inc as well as
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 Notes is
wholly dependent upon the financial condition, results of operations and cash
flows from the Owners.




9.           SUBSEQUENT
EVENTS




On
January 5, 2010, Front Voyager Inc. gave notice that it would terminate the
charter of the Front Voyager. The termination will take effect April 1, 2010.
Front Voyager Inc. is required to pay a termination fee calculated in accordance
with the bareboat charter, which will enable Bahamas III to satisfy its
estimated obligations. On March 2, 2010, the Company received approval from
the bondholders through a consent solicitation to amend and clarify certain
indenture and related collateral agreement provisions and definitions to provide
for the sale of Front Voyager, and its release from collateral agreements (‘Sale
and Release’). As part of the Sale and Release, the charter for the vessel will
be amended to permit sale prior to the current charter expiration date of April
1, 2010 if certain bid conditions are met, as well as to permit the mandatory
redemption of approximately $10,884,000 in aggregate principal amount of the
CPTC 8.52% First Preferred Mortgage Term Notes in connection with the Sale and
Release as soon as possible. A Memorandum of Agreement, dated March 15,
2010, has been signed regarding the sale of Front Voyager. Delivery to the
buyers is expected to occur in the first half of April 2010.




Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure




On August
13, 2008, the Board of Directors dismissed Grant Thornton LLP (“Grant Thornton”)
as the Company’s independent registered public accounting firm. Also on August
13, 2008, the Board approved the engagement of PricewaterhouseCoopers AS
(“PricewaterhouseCoopers”) as the Company’s independent registered public
accounting firm for the year ending December 31, 2008.  The Board
determined to dismiss Grant Thornton and engage PricewaterhouseCoopers in order
to realize economies and efficiencies, since PricewaterhouseCoopers acts as the
independent registered public accounting firm for Frontline Ltd. and other
companies connected with the Company.




The
report of Grant Thornton on the financial statements of the Company as of
December 31, 2007 did not contain an adverse opinion or disclaimer of opinion
and was not qualified or modified as to uncertainty, audit scope or accounting
principles.




In
connection with the audit of the Company’s financial statements for the fiscal
year ended December 31, 2007, and through the period ended August 13, 2008,
there were no disagreements with Grant Thornton on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope and
procedures which, if not resolved to the satisfaction of Grant Thornton, would
have caused Grant Thornton to make reference to the matter of such disagreements
in their reports.






27




Item
9A(T).    Controls and Procedures




Disclosure
Controls and Procedures




Our
management, including our President and Treasurer, with the participation of our
manager, Frontline Ltd., 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 amended, as of December 31,
2009.  Based upon that evaluation, our President and Treasurer
concluded that the Company’s disclosure controls and procedures were effective
as of December 31, 2009.




Management’s
Report on Internal Controls over Financial Reporting




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




Internal
control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Securities Exchange Act of 1934, as amended, as a process
designed by, or under the supervision of, our President and Treasurer and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. GAAP and includes those policies and procedures that:






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




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




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




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




Our
management, including our President and Treasurer with the participation of
our manager, Frontline Ltd., conducted the evaluation of the effectiveness of
the internal controls over financial reporting using the control criteria
framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) published in its report entitled Internal Control-Integrated
Framework. Based upon that evaluation, our President and Treasurer with the
participation of our manager, Frontline Ltd. concluded that our internal
controls over financial reporting were effective as of December 31,
2009.




28


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




Change
in Internal Control over Financial Reporting




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




Item
      9B.
            Other
      Information




None.




29







PART
III




Item
      10.
            Directors
      and Executive Officers of the
Registrant




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




Name
            Age
            Position
      with CompanyFrank
      B. Bilotta
              Timothy
      O’Connor
              Christopher
      Thompson
            49
              37
              41
            Director,
      President, Treasurer and Assistant Secretary
              Director,
      Secretary, Vice President and Assistant Treasurer
              Director,
      Vice President, Assistant Secretary and Assistant
  Treasurer


Officers
are appointed by the Board of Directors and will serve until they resign or are
removed by the Board of Directors.




Frank B.
Bilotta, serves as the Company's Director, President, Treasurer and Assistant
Secretary. Mr. Bilotta is Principal Executive Officer and Principal Financial
Officer of the Company. Mr. Bilotta is a principal at GSS and has served as its
President and Treasurer since August 2005. Mr. Bilotta served as Vice President
of GSS from December 2001 to August 2005.




Timothy
O'Connor, serves as the Company's Director, Secretary, Vice President and
Assistant Treasurer. Mr. O'Connor is a principal at GSS and has served as its
Vice President since April 2002.




Christopher
Thompson, serves as the Company's Director, Vice President, Assistant Secretary
and Assistant Treasurer. Mr. Thompson is a principal at GSS and has served as
its Vice President since May 2002.




The
Company’s equity is neither listed nor publicly traded. The equity is held by
one beneficial holder, The California Trust. The Owners obligations toward their
bondholders are set out in detail in covenants contained in the Indenture for
their Notes. For the above stated reasons, the Company has not adopted a
business code of ethics or appointed an audit committee or financial
expert.




Item
      11.
            Executive
      Compensation




None of
the directors or executive officers of the Company receive any compensation in
connection with their respective positions.  The Company has not
entered into any affiliate transactions, other than the original agency
agreement for the issuance of the notes.




Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters




The
following table provides information as of March 19, 2010 with respect to the
ownership by each person or group of persons, known by the registrant to be a
beneficial owner of 5% or more of the Common Stock.




Except as
set forth below, the Registrant is not aware of any beneficial owner of more
than 5% of the Common Stock as of close of business on March 19,
2010.






30




Class
      of shares
            Name
      and address of beneficial owners
            Number
      of shares
            Percent
      of ClassCommon
      Stock
            GSS
      Holdings Boston, Inc.
              114
      West 47th
      Street, Suite 2310
              New
      York, NY 10036
            1,000
            100%


The
Company does not have an equity compensation plan.




Item
      13.
            Certain
      Relationships and Related
Transactions




None.




Item
      14.
            Principal
      Accountant Fees and Services




The
following table summarizes fees we have paid to our principal accountant for
independent auditing, tax and related services for each of the last two fiscal
years:




2009
            2008Audit
      fees (1)
            $25,100
            $
      35,000Audit-related
      fees (2)
            -
            -Tax
      fees (3)
            -
            -All
      other fees (4)
            -
            -Total
            $25,100
            $
      35,000


(1) Audit fees represent amounts
billed for each of the years presented for professional services rendered in
connection with (i) the audit of our annual financial statements, (ii) the
review of our quarterly financial statements or (iii) those services normally
provided in connection with statutory and regulatory filings or engagements
including comfort letters, consents and other services related to SEC matters.
This information is presented as of the latest practicable date for this annual
report on Form 10-K.





(2) Audit-related fees represent
amounts we were billed in each of the years presented for assurance and related
services that are reasonably related to the performance of the annual audit or
quarterly reviews. This category primarily includes services relating to
internal control assessments and accounting-related consulting.




(3) Tax fees represent amounts
we were billed in each of the years presented for professional services rendered
in connection with tax compliance, tax advice and tax planning.




(4) All other fees represent
amounts we were billed in each of the years presented for services not
classifiable under the other categories listed in the table above.




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




31


PART
IV




Item
      15.
            Exhibits
      and Financial Statement Schedules




(a) The
following documents are filed as part of this Annual Report under Item 8.
Financial Statements and Supplementary Data:




Financial
Statements




Report of
Registered Public Accounting Firms




Balance
Sheets at December 31, 2009 and 2008




Statements
of Operations and Retained Earnings for the Years Ended December 31, 2009, 2008
and 2007




Statements
of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007




Notes to
Financial Statements




(b)
Exhibits Note brackets in some of the exhibits highlighted below.




3.1
            Certificate
      of Incorporation of California Petroleum Transport Corporation (filed as
      Exhibit 3.1 to Registrant’s Registration Statement on Form S-1, Commission
      File Number 33-79220, and incorporated herein by
    reference).3.2
            Bylaws
      of California Petroleum Transport Corporation (filed as Exhibit 3.2 to
      Registrant’s Registration Statement on Form S-1, Commission File Number
      33-79220, and incorporated herein by reference).3.3
            Certificate
      of Incorporation and Memorandum of Association of CalPetro Tankers
      (Bahamas I) Limited (filed as Exhibit 3.3 to Registrant’s Registration
      Statement on Form F-1, Commission File Number 33-79220, and incorporated
      herein by reference).3.4
            Articles
      of Association of CalPetro Tankers (Bahamas I) Limited (filed as Exhibit
      3.4 to Registrant’s Registration Statement on Form F-1, Commission File
      Number 33-79220, and incorporated herein by reference).3.5
            Certificate
      of Incorporation and Memorandum of Association of CalPetro Tankers
      (Bahamas II) Limited (filed as Exhibit 3.5 to Registrant’s Registration
      Statement on Form F-1, Commission File Number 33-79220, and incorporated
      herein by reference).3.6
            Articles
      of Association of CalPetro Tankers (Bahamas II) Limited (filed as Exhibit
      3.6 to Registrant’s Registration Statement on Form F-1, Commission File
      Number 33-79220, and incorporated herein by reference).3.7
            Certificate
      of Incorporation of CalPetro Tankers (IOM) Limited (filed as Exhibit 3.7
      to Registrant’s Registration Statement on Form F-1, Commission File Number
      33-79220, and incorporated herein by reference).3.8
            Memorandum
      and Articles of Association of CalPetro Tankers (IOM) Limited (filed as
      Exhibit 3.8 to Registrant’s Registration Statement on Form F-1, Commission
      File Number 33-79220, and incorporated herein by
    reference).   32
  3.9
            Certificate
      of Incorporation and Memorandum of Association of CalPetro Tankers
      (Bahamas III) Limited (filed as Exhibit 3.9 to Registrant’s Registration
      Statement on Form F-1, Commission File Number 33-79220, and incorporated
      herein by reference).3.10
            Articles
      of Association of CalPetro Tankers (Bahamas III) Limited (filed as Exhibit
      3.10 to Registrant’s Registration Statement on Form F-1, Commission File
      Number 33-79220, and incorporated herein by reference).4.1
            Form
      of Serial Indenture between California Petroleum Transport Company and
      Chemical Trust Company of California, as Indenture Trustee (filed as
      Exhibit 4.1 to Registrant’s Registration Statement on Form S-3, Commission
      File Number 33-56377, and incorporated herein by
    reference).10.1
            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 Corporation by CalPetro Tankers (Bahamas I)
      Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (IOM)
      Limited, CalPetro Tankers (Bahamas III) Limited) (filed as Exhibit 10.3 to
      Registrant’s Registration Statement on Form S-3, Commission File Number
      33-56377, and incorporated herein by reference).10.2
            Form
      of Bareboat 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 (filed as
      Exhibit 10.2 to Registrant’s Registration Statement on Form S-3,
      Commission File Number 33-56377, and incorporated herein by
      reference).10.3
            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) (filed
      as Exhibit 4.08 to Registrant’s Registration Statement on Form S-3,
      Commission File Number 33-56377, and incorporated herein by
      reference).10.4
            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 (filed as Exhibit 4.09 to Registrant’s Registration
      Statement on Form S-3, Commission File Number 33-56377, and incorporated
      herein by reference).10.5
            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) (filed as Exhibit
      4.10 to Registrant’s Registration Statement on Form S-3, Commission File
      Number 33-56377, and incorporated herein by reference).    33
  10.6
            Form
      of Management Agreement between P.D. Gram & Co., and [CalPetro Tankers
      (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro
      Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] (filed as
      Exhibit 4.10 to Registrant’s Registration Statement on Form S-3,
      Commission File Number 33-56377, and incorporated herein by
      reference).10.7
            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] to California Petroleum
      Transport Corporation (filed as Exhibit 4.11 to Registrant’s Registration
      Statement on Form S-3, Commission File Number 33-56377, and incorporated
      herein by reference).10.87
            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 (Bahamas
      III) Limited] (filed as Exhibit 4.12 to Registrant’s Registration
      Statement on Form S-3, Commission File Number 33-56377, and incorporated
      herein by reference).10.9
            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 (Bahamas III) Limited]
      (filed as Exhibit 4.13 to Registrant’s Registration Statement on Form S-3,
      Commission File Number 33-56377, and incorporated herein by
      reference).10.10
            Form
      of Collateral Agreement between California Petroleum Transport
      Corporation, the Indenture Trustee under the Serial Indenture, the
      Indenture Trustee under the Term Indenture and Chemical Trust Company of
      California, as Collateral Trustee (filed as Exhibit 4.14 to Registrant’s
      Registration Statement on Form S-3, Commission File Number 33-56377, and
      incorporated herein by reference).10.11
            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 (filed as Exhibit 4.15 to Registrant’s Registration Statement
      on Form S-3, Commission File Number 33-56377, and incorporated herein by
      reference).10.12
            Form
      of First Preferred Ship Mortgage by [CalPetro Tankers (Bahamas III)
      Limited] [CalPetro Tankers (IOM) 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) (filed as Exhibit 4.3 to
      Registrant’s Registration Statement on Form S-3, Commission File Number
      33-56377, and incorporated herein by reference).10.13
            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) (filed
      as Exhibit 4.4 to Registrant’s Registration Statement on Form S-3,
      Commission File Number 33-56377, and incorporated herein by
      reference).10.14
            Form
      of Bermudian Statutory Ship Mortgage and Deed of Covenants by CalPetro
      Tankers (IOM) 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) (filed as Exhibit 4.5 to Registrant’s Registration
      Statement on Form S-3, Commission File Number 33-56377, and incorporated
      herein by reference).   34
  10.15
            Bareboat
      Charter Agreement by and between CalPetro Tankers (Bahamas III) Limited
      and Front Voyager Inc. entered into as of March 31,
  2006.10.16
            Assignment
      of Charter by and between California Petroleum Transportation Corporation
      and JP Morgan Trust Company, National Association entered into as of March
      31, 2006.10.17
            Collateral
      Assignment of Charter by and between California Petroleum Transportation
      Corporation and CalPetro Tankers (Bahamas III) Limited entered into as of
      March 31, 2006.21.1
            The
      Company does not have any subsidiaries.31.1
            Certification
      of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a) of the Securities Exchange Act, as amended.*31.2
            Certification
      of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule
      15d-14(a) of the Securities Exchange Act, as amended.*32.1
            Certification
      of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.*32.2
            Certification
      of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.**
            Filed
      herewith





35




SIGNATURES




Pursuant
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.




California
      Petroleum Transport Corporation(Registrant)Date
            March
      19, 2010
            
            ByFrank
      B. BilottaPresident





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.






Date
            March
      19, 2010
            
            ByFrank
      B. BilottaDirector
      and President





Date
            March
      19, 2010
            
            ByFrank
      B. BilottaTreasurer
















SK 02089 0006
1082511








36