Tell me about OSG in 25 words or less.

What three things do I really need to know about the company?

What is OSG’s business strategy?

What makes OSG different?

What role does OSG play in the worldwide distribution of energy?

How is the marine transportation services industry changing and what is OSG doing to capitalize on those changes?

How are OSG’s different business units linked?

Who are OSG’s key customers?

How would you describe OSG’s culture or way of doing things?

What are some of OSG’s most recent accomplishments?

Where will OSG be five years from now?

Who do I call to set up an interview?

Tell me about OSG in 25 words or less.

OSG is the second largest publicly traded tanker company¹ operating International and U.S. Flag vessels that transport crude oil and refined petroleum product cargoes worldwide.

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What three things do I really need to know about the Company?

1. By having a diversified fleet, OSG can capitalize on the crude oil spot market (where rates have historically achieved higher returns than term charters) and rely on an annuity stream of revenue from medium to long-term charters from its product carrier, U.S. Flag and gas businesses.

2. OSG’s business model is designed to enable the Company to make continuous investments in maintaining the highest quality fleet as well as retaining and training the most qualified sea and shoreside personnel in the industry. The Company believes that the ever-changing regulatory environment coupled with customers who demand flawless, reliable energy transportation require such a commitment.

3. The scale of OSG’s fleet and global operations gives it a competitive advantage. Scale improves the timeliness and quality of market information, which in turn leads to trading advantages and by participating in commercial pools, the Company can optimize vessel utilization. In addition, the breadth of OSG’s operations allow it to develop and expand customer and partner relationships worldwide as well as leverage its purchasing power for everything from lubes, to paint and spare parts, to drydock scheduling.

The Company’s balanced growth strategy is to:

• Be a market leader in each of the segments in which it chooses to compete including: crude oil, refined petroleum products, U.S. Flag and gas;

• Build on a foundation of commercial and technical expertise and offer multiple solutions to its customers across all vessel classes;

• Set the gold standard for technical management;

• Optimize capital employed through a portfolio mix of owned and chartered-in vessels and spot (voyage charter) and time charter revenue based on market dynamics; and

• Maintain a strong balance sheet and financial flexibility through all market cycles.

The business of transporting crude oil and refined petroleum products from one port to another is very complex and involves hundreds of publicly traded and private ship owners. OSG’s experienced commercial operations teams closely follow the trends and shifts of worldwide supply and demand of oil and refined petroleum products because global disruptions can cause significant rate volatility. OSG's chartering teams identify, develop, and pay close attention to maintaining long-lasting relationships with customers, some of which go back decades. OSG officers are knowledgeable about ports and trade lanes and know how to minimize vessel idle time. World-class technical operations teams in New York, Newcastle, England and Athens, Greece help ensure that OSG maintains and operates the highest quality fleet. The Company continuously invests in programs that optimize the performance of crews and ships through technology and fleet-wide best practices. In addition, shoreside personnel are highly qualified, with 25% having had a career at sea. Finally, OSG’s scale provides it with competitive advantages that include better and more timely market information as well as the ability to attract and retain the most qualified people in the industry. OSG is building the platform today that will enable it to achieve its vision.

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What role does OSG play in the worldwide distribution of energy?

Fifty-seven percent of the world’s oil is transported by sea² and every marginal barrel of oil produced is transported by sea. The seaborne transportation of oil is directly linked to the global supply of oil, which expands and contracts regionally over time. For example, oil fields in the North Sea are now in decline, China is diversifying its dependence on importing crude oil from the Middle East and output is increasing in West Africa and Russia. Supply changes result in an increase in tonne-mile demand (which is a measurement of tonnes of cargo carried, multiplied by the distance traveled). Increases in tonne miles is favorable to shipping as the greater number of laden days in any given period of time results in more revenue earning days.

OSG’s product carrier fleet transports refined petroleum products, which is directly linked to global refinery production and capacity as well as shifting consumption patterns that result in market arbitrage opportunities. For example, when refineries on the U.S. Gulf Coast were damaged after Hurricanes Katrina and Rita in the fourth quarter of 2005, the United States imported gasoline, diesel and jet fuel from Europe, Asia and the Caribbean, activity that benefited the shipping market.

The price of oil indirectly affects marine transportation. If high oil prices reduce demand for refined petroleum products, then production will decline in order to match the lower demand, the result of which would be lower demand for tanker transportation.

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How is the marine transportation services industry changing and what is OSG doing to capitalize on those changes?

The international and U.S. shipping regulatory environment continues to get stricter and more complex. The IMO phase-out of single hull tankers beginning in 2010 has already started to impact the industry as some of the world’s largest oil companies have mandated the use of only double hull tonnage when transporting their cargoes while others have begun to show a strong preference for double hull tankers. OSG refers to this phenomenon as the “single hull, double-hull dilemma” and Morten Arntzen, President and CEO of OSG has said:

OSG’s diverse fleet of crude oil tankers, refined petroleum product carriers, U.S. Flag vessels and liquefied natural gas (LNG) carriers have two things in common: quality commercial operations and in-house technical operations. OSG has long-term customer relationships across all its lines of business. The Company has a proven track record of partnering with key industry players, including Aker ASA, Qatar Gas Transport Company, BP plc and Amerada Hess as well as establishing relationships with commercial pool partners throughout the world. The Company’s integrated technical management operations in New York, New York, Athens, Greece and Newcastle, England oversee OSG’s vessels and ensure that best-in-class environmental, health, and safety programs are in place.

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Who are OSG’s key customers?

Major oil and gas companies, refiners and traders make up OSG’s worldwide customer base. Some of these include: UNIPEC, BP plc, ExxonMobil, Stasco, PetroCanada, Citgo, ChevronTexaco, Valero, PDVSA, Hyproc, ConocoPhillips, Glencore, Vitol, Trafigura, TOTAL and Repsol.

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How would you describe OSG’s culture or way of doing things?

Since the Company’s founding in 1948, the integrity of OSG’s staff in how it conducts business with customers coupled with its marketplace reputation earned by providing reliable, high quality transportation services, characterizes a culture committed to excellence. Equally important is the Company’s commitment to transparent communications to investors, the media, customers and employees.

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What are some of OSG’s most recent accomplishments?

In the past two and one-half years, the Company’s balanced growth strategy has resulted in fleet diversification and expansion across each of its business segments. In addition, by actively managing its assets, the Company operates one of the most modern, high-quality fleets in the world.

• Fleet Expansion
  • Crude Oil Transportation
    • The purchase of two V-Plus crude carriers, the largest in the world, each with the capacity to transport 3.2 million barrels of oil.
    • The order for four, 44-meter beam Aframax tankers.
  • Product Carriers
    • OSG has chartered-in eight product carriers, four from subisidiaries of Cido Tanker Holding Co., and four from Parakou Shipping Ltd. The tankers are scheduled for delivery between late 2006 and mid 2009.
  • U.S. Flag
    • The purchase of two U.S. Flag product carriers, signaled OSG’s recommitment to investment and expansion in the U.S. Flag and Jones Act sector.
    • OSG reflagged three tankers to U.S. Flag to participate in the U.S. Government’s Maritime Security Program and provide greater opportunities for growth in transporting government cargoes.
    • The order for 10 Jones Act product carriers, which are being built at the Aker Philadelphia shipyard, was one of the largest commercial ship orders in the U.S. since WWII.

• Fleet Diversification
  • Gas
    • After securing 25-year contracts to transport liquefied natural gas from Ras Laffan, Qatar to Milford Haven in the U.K., OSG formed a joint venture with Qatar Gas Transport Company to build four of the largest gas carriers in the world. Each carrier will have an onboard reliquefaction plant, which reduces dependency on on-shore terminals to convert the gas to liquid before being transported via pipeline.
  • Product Carriers
    • The acquisition of Stelmar Shipping Ltd. for $1.4 billion added 40 tankers to OSG’s fleet and significantly expanded the Company’s presence in the product carrier market.

• Active Asset Management
  • Taking advantage of recent market conditions which have caused tanker prices to be near all-time highs, OSG has either sold, or sold and leased back, older tonnage. The Company also used the proceeds from the Double Hull Tankers, Inc. initial public offering, whereby OSG sold and leased back three VLCC and four Aframax tankers, to pay down debt, which resulted in the Company returning to debt and liquidity levels similar to those prior to the Stelmar acquisition.
  • The newbuild order for four modern Aframaxes was done in conjunction with the sale of older, smaller, less efficient tankers. This enabled OSG to extend the effective earnings life of its Aframax fleet, lower the operating costs of the tankers and lower the average age of the fleet segment.
  • The Company has expanded its fleet by more than 45% since 2004 by chartering-in tonnage. This capital-efficient method of fleet expansion minimizes OSG’s capital requirements and is an opportunity afforded to the Company due to its financial strength and stability.

When asked by employees, customers, shareholders and business partners about what OSG should strive to become over the next five years, Morten Arntzen, President and CEO has been clear in his response:

The Company’s strategy is to achieve market leading positions in each of the segments in which it chooses to compete. This will be achieved through a multi-pronged approach that includes:

• Organic expansion by growing business with current customers across all business segments;

• Capital-efficient fleet expansion through commercial pool growth or continued chartering-in of tonnage with attractive extension or purchase options; and

• Acquisitions that expand the Company’s geographic presence or augment its fleet by leveraging in-house technical and commercial expertise.

Please call Jennifer Schlueter, head of Corporate Communications and Investor Relations at +1 212 578 1634 or email her at jschlueter@osg.com. You may also contact Maureen Dempsey at APCO Worldwide: +1 212 300 1806.

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