April 14, 2005

Kvaerner and OSG sign $500 million Jones Act tanker deal

Kvaerner ASA and Overseas Shipholding Group, Inc. (NYSE:OSG) announced today that they had signed an agreement in principle pursuant to which Kvaerner's subsidiary, Kvaerner Philadelphia Shipyard, Inc. (KPSI), will construct ten Veteran MT-46 class Jones Act Product Tankers, with an option for two additional vessels, and transfer them to another subsidiary which will bareboat charter them to subsidiaries of OSG for initial terms of five or seven years, with extension options for the charterer. For Kvaerner, the proposed transaction is valued at more than $500 million. The agreement in principle is subject to, among other conditions, approval by the Boards of Directors of Kvaerner and OSG, preparation and execution of final agreements and relevant government approvals.

"The proposed construction of ten Jones Act Product Tankers by KPSI is one of the largest commercial ship building transactions undertaken by a U.S. shipyard and represents a significant achievement for the American shipbuilding industry," stated Dave Meehan, President of Kvaerner Philadelphia Shipyard, Inc.

"The proposed bareboat charters of ten newbuild Jones Act Product Tankers by subsidiaries of OSG represent a significant commitment by OSG to its U.S. Flag business," said Morten Arntzen, President and Chief Executive Officer of OSG. "With these charters, OSG will have one of the largest and most modern Jones Act Product Tanker fleets."

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