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                   CALIFORNIA PETROLEUM TRANSPORT CORPORATION


                                       and


                     CALPETRO TANKERS (BAHAMAS III) LIMITED








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                              ASSIGNMENT OF CHARTER
                           Dated as of March 31, 2006

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<PAGE>


                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I
                                   DEFINITIONS

                                   ARTICLE II
                                   ASSIGNMENT

Section 2.01  Security Interest ............................................. 1
Section 2.02  Assignment .................................................... 1
Section 2.03  Owner to Remain Liable ........................................ 4

                                   ARTICLE III
                   REPRESENTATIONS AND WARRANTIES OF THE OWNER

Section 3.01  Organization, Power and Status of the Owner ................... 4
Section 3.02  Authorization; Enforceability; Execution and Delivery ......... 4
Section 3.03  No Conflicts; Laws and Consents; No Default ................... 5
Section 3.04  Governmental Approvals ........................................ 5
Section 3.05  Litigation .................................................... 5
Section 3.06  No Prior Assignment ........................................... 5
Section 3.07  The Charter ................................................... 5

                                   ARTICLE IV
                             COVENANTS OF THE OWNER

Section 4.01  Consent of Charterer .......................................... 5
Section 4.02  Enforcement of Charter ........................................ 5
Section 4.03  Amendment of Charter; Assignment of Charter ................... 6
Section 4.04  Performance of Obligations .................................... 6
Section 4.05  Notices ....................................................... 6
Section 4.06  Further Assurances ............................................ 6
Section 4.07  Lender as Attorney-in-Fact of Owner ........................... 6

                                    ARTICLE V
                            MISCELLANEOUS PROVISIONS

Section 5.01  Amendment ..................................................... 7
Section 5.02  Severability .................................................. 7
Section 5.03  Notices ....................................................... 7
Section 5.04  Consent to Jurisdiction ....................................... 7
Section 5.05  Captions ...................................................... 7
Section 5.06  Governing Law ................................................. 7
Section 5.07  No Partnership ................................................ 8
Section 5.08  Counterparts .................................................. 8
Section 5.09  Survival ...................................................... 8
Section 5.10  Integration ................................................... 8
Section 5.11  Reproduction of Documents ..................................... 8
Section 5.12  Successors and Assigns; Assignment ............................ 8
Section 5.13  General Interpretive Principles ............................... 8

<PAGE>


          Assignment of Charter,  dated as of March 31, 2006 (the "Assignment"),
between California  Petroleum  Transport  Corporation,  a corporation  organized
under the laws of the State of Delaware  (the  "Lender")  and  CalPetro  Tankers
(Bahamas III) Limited, a company organized under the laws of The Commonwealth of
the Bahamas (the "Owner").

                              PRELIMINARY STATEMENT

          The Owner has received from the Lender loans in the original aggregate
principal  amount of  $40,262,000.00  (the  "Loans")  pursuant  to the Term Loan
Agreement  dated as of April 1, 1995 (the "Term  Loan  Agreement")  between  the
Lender and the Owner, as borrower.

          The net  proceeds  of the Loans were used by the Owner to acquire  the
m.t. Virgo Voyager (ex-"WILLIAM E. CRAIN") (the "Vessel") from Chevron Transport
Corporation (the "Initial  Charterer").  The Initial  Charterer has re-delivered
the  Vessel to  Owner,  and the Owner has  entered  into that  certain  Bareboat
Charter dated March 31, 2006 (the "Charter") between the Owner and Front Voyager
Inc., as charterer (the "Charterer"). As collateral security for its obligations
under the Term Loan  Agreement,  the Owner  has  heretofore  assigned,  pledged,
mortgaged and granted the Lender a security interest in, inter alia, the Vessel,
the Initial  Charter  and the  earnings  and  insurances  of the Vessel,  and is
obligated to assign,  pledge,  mortgage and grant the Lender a security interest
in the Charter.

          NOW,   THEREFORE,   in  consideration  of  the  mutual  covenants  and
agreements  herein  contained and of other  valuable  consideration,  receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          Capitalized  terms used in this  Assignment  shall  have the  meanings
assigned to such terms in Schedule 1 to this Assignment,  and the definitions of
such terms shall be equally  applicable to both the singular and plural forms of
such terms.

                                   ARTICLE II

                                   ASSIGNMENT

          Section 2.01 Security Interest.  This Assignment is made and delivered
as security for the Term Obligations.

          Section 2.02 Assignment. In order to provide for the payment of and as
security for the Term Obligations the Owner has sold, assigned, transferred, set
over and granted a security interest and does hereby sell, assign, transfer, set
over and grant a security interest unto the Lender,  its successors and assigns,
for its and  their  respective  successors'  and  assigns'  own  proper  use and
benefit,  all of the Owner's  right,  title and  interest in and to the Charter,
including without  limitation any moneys  whatsoever  payable to the Owner under
the Charter,  together with the income and proceeds thereof and all other rights
and  benefits  whatsoever  accruing  to the Owner under the  Charter;  provided,
however, that the Owner shall keep the Lender fully and effectively  indemnified
from and against all actions,  losses, claims,  proceedings,  costs, demands and
liabilities  which  may be  suffered  by the  Lender  under or by  virtue of the
Charter or this Assignment.

          Section  2.03  Owner  to  Remain  Liable.Anything  in this  Assignment
contained to the contrary  notwithstanding,  the Owner shall remain liable under
the Charter,  and shall  observe,  perform and fulfill all of the conditions and
obligations to be observed,  performed and fulfilled by it  thereunder,  and the
Lender shall have no obligation or liability of any kind  whatsoever  thereunder
or by reason of or arising out of this Assignment, nor shall the Lender be under
any liability whatsoever in the event of any failure by the Owner to perform its
obligations  thereunder  or be required or  obligated  in any manner to observe,
perform or fulfill any of the conditions or obligations of the Owner  thereunder
or  pursuant  thereto,  or to make any  payment or to make any inquiry as to the
nature or sufficiency of any payment received by it or the Owner thereunder,  or
to present or file any claim,  or to take any other action to collect or enforce
the  payment of any  amounts  which may have been  assigned  to the Lender or to
which the Lender may be entitled hereunder at any time or times.

          (b) Any and all rights assigned herein may be further  assigned by the
Lender, including,  without being limited to, assignments in connection with the
enforcement of the assignments made by this Assignment and any subsequent holder
of this  Assignment  shall  succeed to and have all the rights and powers of the
Lender under this Assignment.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF THE OWNER

          The Owner hereby represents and warrants to the Lender as follows:

          Section 3.01  Organization,  Power and Status of the Owner.  The Owner
(a) is a corporation  duly formed,  validly  existing and in good standing under
the laws of The Bahamas and (b) is duly authorized,  to the extent necessary, to
do business in each  jurisdiction  where the character of its  properties or the
nature of its activities makes such qualification  necessary.  The Owner has all
requisite  corporate  power and  authority  to own and operate  the  property it
purports  to own and to carry on its  business  as now  being  conducted  and as
proposed to be conducted in respect of the Vessel.

          Section 3.02 Authorization; Enforceability; Execution and Delivery.The
Owner has all necessary  corporate  power and authority to execute,  deliver and
perform under this Assignment.

          (b) All  action  on the part of the  Owner  that is  required  for the
authorization,  execution,  delivery and performance of this Assignment has been
duly and effectively taken; and the execution,  delivery and performance of this
Assignment  does not  require the  approval or consent of any Person  except for
such consents and approvals as have been obtained.

          (c) This Assignment has been duly executed and delivered by the Owner.
This  Assignment  constitutes  the legal,  valid and binding  obligation  of the
Owner, enforceable against it in accordance with the terms thereof.

          Section 3.03 No Conflicts;  Laws and Consents; No Default. (a) Neither
the execution,  delivery and performance of this Assignment nor the consummation
of any of the transactions  contemplated hereby nor performance of or compliance
with the terms and  conditions  hereof (i)  contravenes  any  Requirement of Law
applicable  to the  Owner or (ii)  constitutes  a  default  under  any  Security
Document.

          (b) The Owner is in  compliance  with and not in default under any and
all  Requirements of Law applicable to the Owner and all terms and provisions of
this Assignment.

          Section 3.04 Governmental Approvals.  All Governmental Approvals which
are  required  to be obtained  in the name of the Owner in  connection  with the
execution,  delivery and  performance by the Owner of this  Assignment have been
obtained and are in effect.

          Section 3.05 Litigation. There are no actions, suits or proceedings at
law or in equity or by or before any Governmental  Authority now pending against
the Owner or, to the best of the Owner's knowledge, threatened against the Owner
or pending or  threatened  against any property or other assets or rights of the
Owner with respect to this Assignment.

          Section  3.06 No Prior  Assignment.  The  Owner  has not  assigned  or
pledged, and hereby covenants that it will not assign or pledge, so long as this
Assignment shall remain in effect, the Charter or any part of the rights, titles
and  interests  hereby  assigned,  to  anyone  other  than  the  Lender,  or its
successors or assigns.

          Section 3.07 The Charter. The Charter constitutes the legal, valid and
binding obligation of the Charterer and of the Owner as "Owners"  thereunder and
is in full force and effect in the form of Exhibit "A"  attached  hereto;  there
are no amendments, additions, addenda or modifications thereto; said Exhibit "A"
represents  the entirety of the chartering  and other  arrangements  referred to
therein; and neither of the parties thereto is in default thereunder.

                                   ARTICLE IV

                             COVENANTS OF THE OWNER

          The Owner hereby  covenants and agrees that so long as any of the Term
Obligations remains outstanding:

          Section  4.01 Consent of  Charterer.  On the Closing  Date,  the Owner
shall deliver to the Charterer a copy of this  Assignment  and shall procure the
execution by the Charterer of the Consents and Acknowledgment set out in Exhibit
A hereto and  deliver  said  Consents  and  Acknowledgment  to the Lender on the
Closing Date.

          Section 4.02 Enforcement of Charter.The  Owner will do or permit to be
done each and every act or thing which the Lender may from time to time  require
to be done for the purpose of enforcing  the  Lender's  rights under the Charter
and this Assignment.

          (b) If an Event of Default shall occur under the Term Loan  Agreement,
the Owner  shall  cause all moneys  hereby  assigned or agreed to be assigned or
arising  from or in  connection  with any of the  rights,  title,  interest  and
benefits of the Owner under the Charter  shall be paid to the credit of JPMorgan
Chase Bank,  N.A.,  ABA # 021000021  for credit to Acct.  No.  ###-##-####,  Re:
California  Petroleum  Transport  Corporation  or to such  other  account as the
Lender may from time to time direct.

          (c) The Owner will not exercise any right or powers conferred on it by
the Charter in connection  with any default or alleged  default by the Charterer
thereunder   (including   without   limitation  the  right  of  termination  and
substitution)  unless and until  requested so to do by the Lender  whereupon the
Owner  agrees  that it will do so provided  always that the Lender  shall not be
responsible in any way whatsoever in the event that the exercise of any right or
power  (including  the right of  termination  and  substitution)  be  thereafter
adjudged improper or to constitute a repudiation of the Charter by the Owner.

          Section 4.03  Amendment of Charter;  Assignment of  Charter.The  Owner
will not, except with the previous  written consent of the Lender,  agree to any
variation of the Charter or release the  Charterer  from any of its  obligations
thereunder  or waive any breach of the  Charterer's  obligations  thereunder  or
consent  to any  such  act or  omission  of the  Charterer  as  would  otherwise
constitute such breach.

          (b) The Owner will not,  except with the previous  written  consent of
the Lender, assign the Charter to any other Person.

          Section 4.04  Performance of  Obligations.  The Owner will perform its
obligations  under  the  Charter  and  will use its best  efforts  to cause  the
Charterer to perform its obligations under the Charter.

          Section  4.05  Notices.  The  Owner  will  send a copy of all  notices
received or given by it under the Charter forthwith to the Lender.

          Section 4.06 Further  Assurances.  The Owner will at any time and from
time to time, upon the written request of the Lender,  promptly and duly execute
and deliver any and all such further  instruments  and  documents  and take such
action as the Lender may deem  desirable in order to obtain the full benefits of
this Assignment and of the rights and powers herein granted.

          Section  4.07 Lender as  Attorney-in-Fact  of Owner.  The Owner hereby
constitutes  the Lender,  and its  successors  and assigns,  its true and lawful
attorney-in-fact,  irrevocably,  with full power in its own name, in the name of
its  agents  or  nominees  or in the  name of the  Owner or  otherwise,  to ask,
require,  demand, receive,  enforce and give acquittance for, any and all moneys
and claims for moneys due and to become due and payable  under or arising out of
the Charter,  to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which to the Lender may seem to be necessary or advisable under this Assignment.
Any action or proceeding brought by the Lender pursuant to any of the provisions
of this  Assignment or otherwise and any claim made by the Lender  hereunder may
be  compromised,  withdrawn  or otherwise  dealt with by the Lender  without any
notice to or approval of the Owner.

                                    ARTICLE V

                            MISCELLANEOUS PROVISIONS

          Section 5.01  Amendment.  This  Assignment may be amended from time to
time by written agreement signed by the parties hereto.

          Section 5.02 Severability. If any provision of this Assignment is held
to be in conflict  with any  applicable  statute or rule of law or is  otherwise
held to be unenforceable for any reason whatsoever, such circumstances shall not
have  the  effect  of  rendering  the  provision  in  question   inoperative  or
unenforceable  in any other  case or  circumstance,  or of  rendering  any other
provision or provisions herein contained invalid,  inoperative, or unenforceable
to any extent whatsoever. The invalidity of any one or more phrases,  sentences,
clauses or Sections of this Assignment contained, shall not affect the remaining
portions of this Assignment, or any part thereof.

          Section  5.03  Notices.   All  demands,   notices  and  communications
hereunder  shall be in  writing,  personally  delivered  or mailed by  certified
mail-return receipt requested,  and shall be deemed to have been duly given upon
receipt  (a) in the  case  of the  Lender,  at  the  following  address:  c/o JH
Management Corporation, Room 6/9, One International Place, Boston, Massachusetts
02110-2624,  (b) in the  case  of the  Owner,  at  the  following  address:  c/o
McKinney,  Bancroft & Hughes, Mareva House, 4 George Street, Nassau, Bahamas, or
at other such address as shall be designated  by such party in a written  notice
to the other parties.

          Section  5.04  Consent  to  Jurisdiction.  Any legal  suit,  action or
proceeding  against the Owner arising out of or relating to this Assignment,  or
any transaction  contemplated  hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives any
objection  which it may now or hereafter have to the laying of venue of any such
suit,  action or  proceeding,  and the Owner hereby  irrevocably  submits to the
jurisdiction of any such court in any such suit, action or proceeding. The Owner
hereby  irrevocably  appoints and  designates CT Corporation  System,  having an
address  at  1633   Broadway,   New  York,   New  York,   its  true  and  lawful
attorney-in-fact  and duly authorized agent for the limited purpose of accepting
servicing  of legal  process and the Owner  agrees that  service of process upon
such party shall constitute personal service of such process on such Person. The
Owner shall maintain the designation  and  appointment of such authorized  agent
until all amounts payable under this Assignment shall have been paid in full. If
such agent shall  cease to so act,  the Owner shall  immediately  designate  and
appoint another such agent satisfactory to the Lender and shall promptly deliver
to the Lender  evidence  in writing of such  other  agent's  acceptance  of such
appointment.

          Section 5.05 Captions. The captions or headings in this Assignment are
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or sections of this Assignment.

          Section 5.06 Governing Law. This  Assignment  shall be governed by and
interpreted in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law.

          Section 5.07 No Partnership.  Nothing herein contained shall be deemed
or construed to create a partnership  or joint venture among the parties  hereto
and the  services of each party shall be rendered as an  independent  contractor
and not as agent for any other party.

          Section  5.08  Counterparts.  This  Assignment  may be executed in any
number of counterparts and by different parties hereto on separate  counterpart,
each of  which  shall be  deemed  to be an  original.  Such  counterparts  shall
constitute one and the same agreement.

          Section 5.09 Survival.  The representations,  covenants and agreements
contained  in or made  pursuant to this  Assignment  in respect of either  party
hereto shall  survive the execution  and delivery of this  Assignment  and shall
continue  in  effect  so long  as  such  party's  obligations  hereunder  remain
outstanding.

          Section  5.10  Integration.  This  Assignment  and  the  Schedule  and
Exhibits hereto  constitute the entire agreement and  understanding  between the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements,  understandings or representations  pertaining to the subject matter
hereof,  whether oral or written.  There are no warranties,  representations  or
other  agreements  between the  parties in  connection  with the subject  matter
hereof except as specifically set forth or incorporated herein.

          Section  5.11  Reproduction  of  Documents.  This  Assignment  and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
party at the  closing,  and (c)  financial  statements,  certificates  and other
information  previously  or  hereafter  furnished,  may  be  reproduced  by  any
electronic, digital, photographic, photostatic, microfilm, micro-card, miniature
photographic  or  other  similar  process.  The  parties  agree  that  any  such
reproduction  shall be  admissible  in  evidence as the  original  itself in any
judicial  or  administrative  proceeding  (whether  or not  the  original  is in
existence and whether or not such reproduction was made in the regular course of
business) and that any  enlargement,  facsimile or further  reproduction of such
reproduction shall likewise be admissible in evidence.

          Section 5.12 Successors and Assigns; Assignment. This Assignment shall
be binding  upon and inure to the  benefit of the Owner and the Lender and their
respective  successors and assigns. The Owner shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lender. The Lender, at its sole option,  shall have the right to assign this
Assignment,  the Term Loan  Agreement,  the  Security  Documents  and any of its
rights and interest hereunder and thereunder.

          Section 5.13  General  Interpretive  Principles.  For purposes of this
Assignment  except  as  otherwise  expressly  provided  or  unless  the  context
otherwise requires:

          (a) the defined terms in this  Assignment  shall include the plural as
well as the  singular,  and the use of any  gender  herein  shall be  deemed  to
include any other gender;

          (b)  accounting  terms not otherwise  defined herein have the meanings
assigned to them in accordance with generally accepted accounting  principles as
in effect on the date hereof;

          (c)  references  herein  to  "Articles",  "Sections",   "Subsections",
"paragraphs",  and other  subdivisions  without  reference  to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions of
this Assignment;

          (d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;

          (e) the words  "herein",  "hereof',  "hereunder"  and  other  words of
similar  import refer to this  Assignment  as a whole and not to any  particular
provision; and

          (f) the term "include" or "including" shall mean without limitation by
reason of enumeration.

<PAGE>


          IN  WITNESS  WHEREOF,  the  Owner  and the  Lender  have  caused  this
Assignment  to be duly  executed  and  delivered  by their  respective  officers
thereunto duly authorized all as of the day and year first above written.

                                           CALIFORNIA PETROLEUM TRANSPORT
                                           CORPORATION, as Lender


                                           By:  /s/ Douglas Donaldson
                                                --------------------------------
                                           Name:  Douglas Donaldson
                                           Title: Treasurer

                                           CALPETRO TANKERS (BAHAMAS III)
                                           LIMITED, as Owner

                                           By:  /s/ Tor Olav Troim
                                                --------------------------------
                                           Name:  Tor Olav Troim
                                           Title: President



<PAGE>


                                                                       Exhibit A
                LETTER OF ACKNOWLEDGMENT TO ASSIGNMENT OF CHARTER

                                                        March __, 2006


CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender

J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION,
as Collateral Trustee

Dear Sirs:

          The undersigned  hereby consents to and acknowledges  receipt of (i) a
signed copy of the Assignment of Charter (the  "Assignment"),  dated as of March
31, 2006,  between  CalPetro  Tankers  (Bahamas  III) Limited (the  "Owner") and
California Petroleum Transport  Corporation (the "Lender") as adequate notice of
such  assignment to the Lender of the Charter (as defined in the Assignment) and
of all the right,  title and  interest of the Owner in, to and under the Charter
and (ii) a signed copy of the Collateral  Assignment of Charter (the "Collateral
Assignment"),  dated as of March 31,  2006,  between the Lender and J.P.  Morgan
Trust  Company,  National  Association  (the  "Collateral  Trustee") as adequate
notice of such further  assignment to the Collateral  Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the Charter.

          So long as the Assignment remains effective,  we hereby agree that (a)
upon  notification to us of the occurrence of an Event of Default under the Term
Loan  Agreement  referred  to in the  Assignment,  we shall pay any and all sums
which we are legally obligated to pay to the Owner or otherwise as stated in and
according  to the  Charter  directly  to the  Collateral  Trustee's  Account  at
JPMorgan Chase Bank, N.A., ABA # 021000021 for credit to Acct. No.  ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing  and  (b)  with  respect  to each of the  insurances,  if any,  obtained
pursuant  to Clause 11 of the  Charter,  the Lender and the  Collateral  Trustee
shall, if possible, be named additional assureds.

          Payments  of moneys  under the  Charter  may be  adjusted,  reduced or
withheld only as expressly provided therein.  Payments to the Collateral Trustee
shall not be subject  to any right of set-off or defense by way of  counterclaim
or  otherwise  which the  undersigned  may have  against the Owner or any entity
substituted for it other than under the Charter and all payment once made to you
will be final,  and once paid we will not,  for any reason  whatsoever,  seek to
recover from the  Collateral  Trustee any such  payment  made to the  Collateral
Trustee by virtue of the Assignment, the Collateral Assignment or this Letter of
Consent.

          We  confirm  that the terms of the  Charter  remain in full  force and
effect and  constitute  the entire  agreement  between the parties  thereto with
respect to the Vessel and that the Owner is not  presently  to our  knowledge in
breach of the terms of the  Charter.  We further  confirm  that the terms of the
Charter  have not been varied or modified and that the terms of the Charter will
not after  the date  hereof be varied  or  modified  without  the prior  written
consent of the Collateral Trustee.

          We confirm that we have received no prior notice of any  assignment by
the Owner of any interest in the Charter.

          The   undersigned   will  not  permit  any  amendment,   modification,
cancellation  or other  alteration  in the  Charter,  nor will it  consent to or
accept the substitution thereunder of any party for the Owner without your prior
written consent.

                                              FRONT VOYAGER INC., as Charterer


                                              By: ------------------------------
                                              Name:
                                              Title:


<PAGE>


                                   SCHEDULE 1

                      Defined Terms Used in the Assignment

          "Assignment"  or Assignment of Charter" means the  assignment  between
the Owner and the Lender,  as amended from time to time in  accordance  with the
terms  thereof,  pursuant  to which the Owner  assigns  to the Lender all of its
right, title and interest in, to and under the Charter to secure its obligations
under the Loan Agreements.

          "Business Day" means any day other than a Saturday,  a Sunday or a day
on which banking  institutions  in New York,  New York, or in the city and state
where the  Trustee's  principal  offices  are  located,  are  authorized  or are
obligated by law, executive order or governmental decree to be closed.

          "Closing Date" means March 31, 2006.

          "Event of Default' means an Event of Default under Section 6.01 of the
Term Loan Agreement.

          "Front Voyager Inc." means Front Voyager Inc., a Liberian corporation.

          "Governmental  Approval" means any authorization,  consent,  approval,
license,   franchise,   lease,  ruling,  permit,  tariff,  rate,  certification,
exemption, filing or registration by or with any Governmental Authority relating
to the ownership of the Collateral or to the execution,  delivery or performance
of the Loan Agreement or any Security Document.

          "Governmental  Authority" means the federal  government,  any state or
other  political  subdivision  thereof,  and any  entity  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner or
operation of the Vessels.

          "Charter"  means with  respect to each Vessel,  the Bareboat  Charter,
dated March 31, 2006, between the Charterer and the Owner.

          "Charterer" means Front Voyager Inc., a Liberian corporation.

        "Law" means any statute, law, rule, regulation, ordinance, order, code,
          policy or rule of common  law,  now or  hereafter  in effect,  and any
judicial or
administrative interpretation thereof by a Governmental Authority or otherwise,
including any judicial or administrative order, consent decree or judgment.

          "Lender"  means  California   Petroleum   Transport   Corporation,   a
corporation organized under the laws of the State of Delaware.

          "Loans" means, collectively, the Term Loan.

          "Loss Date" means the date which is 90 days after the  occurrence of a
Total Loss of the Vessel.

          "Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from time
to time in accordance with the terms of such Mortgage.

          "Owner"  means  CalPetro  Tankers  (Bahamas  III)  Limited,  a company
organized under the laws of The Commonwealth of the Bahamas.

          "Payment Date" means each April 1 and October 1,  commencing  April 1,
2006.

          "Person" means an individual,  a partnership,  a corporation,  a joint
venture, an unincorporated association, a joint-stock company, a trust, or other
entity or a government or any agency or political subdivision thereof.

          "Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.

          "Requirement  of Law" means,  as to any  Person,  the  certificate  of
incorporation  and by-laws or partnership  agreement or other  organizational or
governing  documents of such Person,  and, any Law applicable to or binding upon
such  Person  or any of its  properties  or to which  such  Person or any of its
properties is subject.

          "Security Documents" means the Term Loan Agreement,  the Mortgage, the
Assignment of Charter, the Assignment of Earnings and Insurances, the Assignment
of Management Agreement,  the Assignment of Purchase Agreement, the Issue of One
Debenture, collectively.

          "State"  means  any state of the  United  States of  America  and,  in
addition, the District of Columbia.

          "Term  Loan"  shall  have the  meaning  assigned  to such  term in the
Preliminary Statement of this Assignment.

          "Term Loan Agreement"  means the Loan Agreement,  dated as of April 1,
1995  between the Owner and the Lender  pursuant  to which the Lender  makes the
Term Loan to the Owner.

          "Term Mortgage Notes" means 8.52 % First Preferred  Mortgage Notes Due
2015 in the  initial  aggregate  amount of  $117,900,000  issued  by the  Lender
concurrently with the issuance of the Serial Mortgage Notes.

          "Term  Obligations"  means the payment,  performance or obligations of
any kind or nature  whatsoever  of the Owner under and pursuant to the Term Loan
Agreement,  any  Security  Document  and any  instrument,  agreement or document
referred to therein.

          "Trustee" means J.P. Morgan Trust Company, National Association.

          "Vessel"  shall  have  the  meaning  assigned  to  such  term  in  the
Preliminary Statement of this Assignment.


<PAGE>


                      CHARTERER'S LETTER OF ACKNOWLEDGMENT
                            TO ASSIGNMENT OF CHARTER


                                                       March 31, 2006


CALIFORNIA PETROLEUM
TRANSPORT CORPORATION, as Lender

J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION, as Collateral Trustee

Dear Sirs:

          The undersigned  hereby consents to and acknowledges  receipt of (i) a
signed copy of the Assignment of Charter (the  "Assignment"},  dated as of March
31, 2006,  between  CalPetro  Tankers  (Bahamas  III) Limited (the  "Owner") and
California Petroleum Transport  Corporation (the "Lender") as adequate notice of
such  assignment to the Lender of the Charter (as defined in the Assignment) and
of all the right,  title and  interest of the Owner in, to and under the Charter
and (ii) a signed copy of the Collateral  Assignment of Charter (the "Collateral
Assignment"),  dated as of March 31,  2006,  between the Lender and J.P.  Morgan
Trust  Company,  National  Association  (the  "Collateral  Trustee") as adequate
notice of such further  assignment to the Collateral  Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the Charter.

          So long as the Assignment remains effective,  we hereby agree that (a)
upon  notification to us of the occurrence of an Event of Default under the Term
Loan  Agreement  referred  to in the  Assignment,  we shall pay any and all sums
which we are legally obligated to pay to the Owner or otherwise as stated in and
according  to the  Charter  directly  to the  Collateral  Trustee's  Account  at
JPMorgan Chase Bank, N.A., ABA # 021000021 for credit to Acct. No.  ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing  and  (b)  with  respect  to each of the  insurances,  if any,  obtained
pursuant  to Clause 11 of the  Charter,  the Lender and the  Collateral  Trustee
shall, if possible, be named additional assureds.

          Payments  of moneys  under the  Charter  may be  adjusted,  reduced or
withheld only as expressly provided therein.  Payments to the Collateral Trustee
shall not be subject  to any right of set-off or defense by way of  counterclaim
or  otherwise  which the  undersigned  may have  against the Owner or any entity
substituted for it other than under the Charter and all payment once made to you
wi11 be final,  and once paid we will not,  for any reason  whatsoever,  seek to
recover from the  Collateral  Trustee any such  payment  made to the  Collateral
Trustee by virtue of the Assignment, the Collateral Assignment or this Letter of
Consent.

          We  confirm  that the terns of the  Charter  remain in full  force and
effect and  constitute  the entire  agreement  between the parties  thereto with
respect to the Vessel and that the Owner is not  presently  to our  knowledge in
breach of the terms of the  Charter.  We further  confirm  that the terms of the
Charter  have not been varied or modified and that the terms of the Charter wi11
not after  the date  hereof be varied  or  modified  without  the prior  written
consent of the Collateral Trustee.

          We confirm that we have received no prior notice of any  assignment by
the Owner of any interest in the Charter.

          The   undersigned   wi11  not  permit  any  amendment,   modification,
cancellation  or other  alteration  in the  Charter,  nor will it  consent to or
accept the substitution thereunder of any party for the Owner without your prior
written consent.

                                              FRONT VOYAGER INC., as Charterer


                                              By: /s/ Tom E. Jebsen
                                                  ------------------------------
                                              Name:  Tom E. Jebsen
                                              Title: President & Director