Aker and OSG Announce Agreement for up to Six More Tankers

Aker American Shipping ASA and Overseas Shipholding Group, Inc. announced that they have signed an agreement in principle pursuant to which Aker American Shipping subsidiary, Aker Philadelphia Shipyard, will construct up to six additional Veteran Class MT-46 Jones Act Product Tankers (three fixed plus three options) and transfer them to another subsidiary, American Shipping Corporation, which will bareboat charter them to subsidiaries of OSG for initial terms of 10-15 years.

For Aker American Shipping the full transaction is valued in excess of $700M (before profit sharing) reflecting the higher rates and longer terms. The agreement in principle is subject to, among other conditions, approval by the Boards of Directors of Aker American Shipping and OSG, preparation and agreement of final documentation, and relevant government approvals. OSG also announced that a time charter agreement has been signed between OSG and BP for one more of the prior order of ten 46,000 dwt Jones Act commercial product tanker being built at Aker Philadelphia Shipyard. To date, nine of the ten vessels due for completion in 2010 now have signed time charters in place.