U.S. Flag

OSG is one of the largest commercial owners and operators of Jones Act vessels in the United States with a trading presence in all four U.S. coastwise markets: intra-U.S. Gulf, U.S. Gulf to the West Coast, U.S. Gulf to the East Coast and the Alaska North Slope. The Company's owned, operated and newbuild U.S. Flag fleet is made up of handysize Product Carriers and Articulated Tug Barges.

As a U.S.-based company, OSG’s U.S. Flag fleet trades in the Jones Act, a cabotage trade established in the 1920s that requires vessels transporting cargo between contiguous U.S. ports to be U.S. built, registered, owned and operated; manned by U.S. citizens and to fly the U.S. Flag. A dedicated U.S. fleet and robust maritime industry is critical for homeland security.

OSG is a vital part of the revitalization of U.S. shipbuilding through its investment and expansion in the U.S. marine industry. Since the enactment of the Jobs Creation Act of 2004, the Company has increased its investment by more than $2.5 billion. The Company’s U.S. Flag fleet totals 24 operating and newbuild vessels.

In November 2007, OSG was awarded the first contract to supply U.S. Flag shuttle tankers to transport oil from Floating Production Storage and Offloading (FPSO) facilities at the Chinook and Cascade ultra-deepwater fields in the Walker Ridge area of the Gulf of Mexico. Operations will commence in mid 2011.

Acquisition
In 2006 OSG acquired Maritrans Inc., a leading provider of tanker and barge services in the Jones Act. The acquisition significantly expanded OSG’s U.S. Flag presence with the addition of 21 articulated tug barges and Handysize product carriers as well as provided a technical and commercial platform based in Tampa, FL.

Newbuild Order with Aker Philadelphia Shipyard
In 2005, OSG ordered 10 Jones Act Product Carriers to be constructed at the Aker Philadelphia Shipyard, with options for two additional vessels. OSG is bareboat chartering in the vessels, which enables it to control the tankers for initial terms of five-to-seven years with extension options for the commercial life of the vessels. OSG exercised its option to build two additional vessels, which were converted to shuttle tankers.

Minority Interest Investment
OSG holds a 37.5% stake in Alaska Tanker Company, a joint operating company formed with BP p.l.c. and Keystone Shipping Co. to manage the fleet of ships that transport BP’s Alaskan North Slope crude oil from Valdez, Alaska to market destinations.

For more information about the U.S. Jones Act market, click here.