20-F

UNITED STATES

  SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC. 20549

FORM 20-F

(Mark One)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
	OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

OR

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _______________________________

For the transition period from _________________ to _________________

Commission file number 001-16601

Frontline Ltd.

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

Bermuda

(Jurisdiction of incorporation or organization)

Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda

(Address of principal executive offices)

Georgina Sousa, Telephone: (1) 441 295 6935, Facsimile: (1) 441 295 3494,

 Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of each class	Name of each exchange on which registered
Ordinary Shares, $2.50 Par Value	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

Ordinary Shares, $2.50 Par Value

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

77,858,502 Ordinary Shares, $2.50 Par Value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x                                            No o

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o                                            No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x                                            No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o                                            No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  o Non-accelerated filer  o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP x International Financial Reporting Standards as issued by the International Accounting Standards Board o Other o

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 o      Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o                                            No x

INDEX TO REPORT ON FORM 20-F

PAGE

PART I
Item 1.	Identity of Directors, Senior Management and Advisers	2
Item 2.	Offer Statistics and Expected Timetable	2
Item 3.	Key Information	2
Item 4.	Information on the Company	20
Item 4A.	Unresolved Staff Comments	35
Item 5.	Operating and Financial Review and Prospects	35
Item 6.	Directors, Senior Management and Employees	56
Item 7.	Major Shareholders and Related Party Transactions	59
Item 8.	Financial Information	61
Item 9.	The Offer and Listing	62
Item 10.	Additional Information	63
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	72
Item 12.	Description of Securities other than Equity Securities	72
PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies	72
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	72
Item 15.	Controls and Procedures	72
Item 16.	Reserved	73
Item 16A.	Audit Committee Financial Expert	73
Item 16B.	Code of Ethics	74
Item 16C.	Principal Accountant Fees and Services	74
Item 16D.	Exemptions from the Listing Standards for Audit Committees	74
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	74
Item 16F.	Change in Registrant's Certifying Accountant	74
Item 16G.	Corporate Governance	75
PART III
Item 17.	Financial Statements	76
Item 18.	Financial Statements	76
Item 19.	Exhibits	77

i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Matters discussed in this report and the documents incorporated by reference may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

Frontline Ltd. and its subsidiaries, or the Company, desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" and similar expressions identify forward-looking statements.

The forward-looking statements in this report are based upon various assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors and matters discussed elsewhere herein and in the documents incorporated by reference herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charterhire rates and vessel values, changes in demand in the tanker and dry bulk markets, changes in world wide oil production and consumption and storage, changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company's vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists, and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission or Commission.

1

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Throughout this report, the "Company," "we," "us" and "our" all refer to Frontline Ltd. and its subsidiaries. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry. The Company operates tankers of two sizes: very large crude carriers, or VLCCs, which are between 200,000 and 320,000 deadweight tons, or dwt, and Suezmax tankers, which are vessels between 120,000 and 170,000 dwt. We also operate oil/bulk/ore or OBO carriers, which are currently classified to carry dry cargo. Unless otherwise indicated, all references to "USD","US$" and "$" in this report are U.S. dollars.

A. SELECTED FINANCIAL DATA

The selected statement of operations data of the Company with respect to the fiscal years ended December 31, 2010, 2009 and 2008 and the selected balance sheet data of the Company with respect to the fiscal years ended December 31, 2010 and 2009, respectively, have been derived from the Company's consolidated financial statements included herein and should be read in conjunction with such statements and the notes thereto. The selected statement of operations data with respect to the fiscal years ended December 31, 2007 and 2006 and the selected balance sheet data with respect to the fiscal years ended December 31, 2008, 2007 and 2006 have been derived from consolidated financial statements of the Company not included herein. The following table should also be read in conjunction with Item 5. "Operating and Financial Review and Prospects" and the Company's consolidated financial statements and notes thereto included herein. The Company's accounts are maintained in U.S. dollars.

	Fiscal year ended December 31,
	2010		2009		2008		2007		2006
(in thousands of $, except ordinary shares, per share data and ratios)
Statement of Operations Data (1):
Total operating revenues		1,165,215		1,133,286		2,104,018		1,299,927		1,558,369
Total operating expenses		888,238		896,237		1,395,831		898,904		850,623
Net operating income		307,912		240,110		850,480		519,191		803,401
Net income from continuing operations before income taxes and noncontrolling  interest		164,222		105,833		701,264		503,991		661,330
Net income from continuing operations		164,004		105,472		700,954		587,138		661,168
Discontinued operations (2)		-		-		-		5,442		13,514
Net income attributable to Frontline Ltd.		161,407		102,701		698,770		570,418		516,000
Earnings from continuing operations per ordinary share
- basic	$	2.07	$	1.32	$	9.15	$	7.55	$	6.72
- diluted	$	2.07	$	1.32	$	9.14	$	7.55	$	6.72
Net income per ordinary share
- basic	$	2.07	$	1.32	$	9.15	$	7.62	$	6.90
- diluted	$	2.07	$	1.32	$	9.14	$	7.62	$	6.90
Cash dividends declared per share	$	2.00	$	0.90	$	8.25	$	8.30	$	7.00

2

	Fiscal year ended December 31,
	2010			2009			2008			2007			2006
(in thousands of $, except ordinary shares and ratios)
Balance Sheet Data (at end of year) (1):
Cash and cash equivalents		176,639			82,575			190,819			168,432			197,181
Newbuildings		224,319			413,968			454,227			160,298			166,851
Vessels and equipment, net		1,430,124			678,694			438,161			208,516			2,446,278
Vessels and equipment under capital lease, net		1,427,526			1,740,666			2,100,717			2,324,789			626,374
Investments in unconsolidated subsidiaries and associated companies		3,408			3,923			4,467			5,633			17,825
Total assets		3,797,920			3,715,218			4,027,728			3,762,091			4,589,937
Short-term debt and current portion of long-term debt		173,595			123,884			293,471			96,811			281,409
Current portion of obligations under capital lease		193,379			285,753			243,293			179,604			28,857
Long-term debt		1,190,763			760,698			614,676			376,723			2,181,885
Obligations under capital leases		1,336,908			1,579,708			1,969,919			2,318,794			723,073
Share capital		194,646			194,646			194,646			187,063			187,063
Total stockholders' equity		747,133			741,340			702,217			445,969			668,560
Ordinary shares outstanding		77,858,502			77,858,502			77,858,502			74,825,169			74,825,169
Weighted average ordinary shares outstanding		77,858,502			77,858,502			76,352,673			74,825,169			74,825,169
Other Financial Data:
Equity to assets ratio (percentage) (3)		19.7	%		20.0	%		17.4	%		11.8	%		14.6	%
Debt to equity ratio (4)		3.9			3.7			4.4			6.7			4.8
Price earnings ratio (5)		12.3			20.7			3.2			6.3			4.6
Time charter equivalent revenue (6)		861,829			896,843			1,493,912			938,960			1,154,029

Notes:

1. The Company distributed the majority of its remaining shareholding in Ship Finance International Limited ("Ship Finance") in March 2007 and no longer consolidates Ship Finance as of March 31, 2007. A summary of the major changes to the financial statements is as follows;

a.	Vessels leased from Ship Finance, which were previously reported as wholly owned, are reported as vessels held under capital lease.
b.	Capital lease obligations with Ship Finance, which were previously eliminated on consolidation are reported as liabilities with the related interest recorded in the income statement.
c.	Debt incurred by Ship Finance, which was previously reported as debt of the Company, is no longer reported.
d.	Derivative instruments held by Ship Finance are no longer reported.

e.	Noncontrolling interest expense relating to Ship Finance is no longer reported.
f.	Profit share expense relating to amounts due to Ship Finance is shown in the income statement.

g. Results from Ship Finance's container ships, jack-up rigs and Panamax vessels are no longer reported in the Company's consolidated results.

2. The Company disposed of the container vessel and rig operations of Ship Finance in the first quarter of 2007 as a result of the spin off of Ship Finance. These operations have been recorded as discontinued operations in 2007 and 2006.

3. Equity-to-assets ratio is calculated as total stockholders' equity divided by total assets.

4. Debt-to-equity ratio is calculated as total interest bearing current and long-term liabilities, including obligations under capital leases, divided by stockholders' equity.

3

5. Price earnings ratio is calculated by dividing the closing year end share price by basic earnings per share.

6. A reconciliation of time charter equivalent revenues to total operating revenues as reflected in the consolidated statements of operations is as follows:

	2010			2009			2008			2007			2006
(in thousands of $)
Total operating revenues		1,165,215			1,133,286			2,104,018			1,299,927			1,558,369
Less:
Other income		(20,678	)		(17,068	)		(17,918	)		(8,516	)		(5,294	)
Voyage expense		(282,708	)		(219,375	)		(592,188	)		(352,451	)		(399,046	)
Time charter equivalent revenue		861,829			896,843			1,493,912			938,960			1,154,029

Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenue, which represents operating revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenue, a non-GAAP measure, provides additional meaningful information in conjunction with operating revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating the Company's financial performance.

B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

D. RISK FACTORS

We are engaged in the seaborne transportation of crude oil, oil products and dry bulk cargoes. The following summarizes some of the risks that may materially affect our business, financial condition or results of operations. As our OBOs are currently fitted to carry dry bulk cargoes, we include risk factors related to dry bulk vessels.

Risks Related to Our Industry

Tankers

If the tanker industry, which historically has been cyclical, is depressed in the future, our earnings and available cash flow may be adversely affected

Historically, the tanker industry has been highly cyclical, with volatility in profitability and asset values resulting from changes in the supply of, and demand for, tanker capacity. Charter rates are still relatively low compared to the rates achieved in the years preceding the global financial crisis, and the recent upward trend in charter rates since the historical lows reached in 2009 may be short lived. These factors may adversely affect the rates payable and the amounts we receive in respect of our vessels operating in tanker pools, as well as our ability to recharter any non-pooled vessels we may have in the future. Our ability to charter our vessels on the expiration or termination of their current spot and time and bareboat charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, economic conditions in the tanker market. Fluctuations in charter rates and tanker values result from changes in the supply and demand for tanker capacity. According to industry sources, newbuilding orders for oil tankers in 2010 increased from their relatively low levels in 2009.

The factors that influence demand for tanker capacity include:

· supply and demand for oil and oil products;

· global and regional economic and political conditions, including developments in international trade and fluctuations in industrial and agricultural production;

4

· regional availability of refining capacity;

· environmental and other legal and regulatory developments;

· the distance oil and oil products are to be moved by sea;

· changes in seaborne and other transportation patterns, including changes in the distances over which tanker cargoes are transported by sea;

· currency exchange rates;

· weather and acts of God and natural disasters, including hurricanes and typhoons;

· competition from alternative sources of energy and from other shipping companies and other modes of transport; and

· international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars.

The factors that influence the supply of tanker capacity include:

· current and expected purchase orders for tankers;

· the number of tanker newbuilding deliveries;

· the scrapping rate of older tankers;

· the successful implementation of the phase-out of single-hull tankers;

· technological advances in tanker design and capacity;

· tanker freight rates, which are affected by factors that may effect the rate of newbuilding, swapping and laying up of tankers;

· price of steel and vessel equipment;

· conversion of tankers to other uses or conversion of other vessels to tankers;

· the number of tankers that are out of service; and

· changes in environmental and other regulations that may limit the useful lives of tankers.

The factors affecting the supply and demand for tankers have been volatile and are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable, including those discussed above.

The international tanker industry has experienced volatile charter rates and vessel values and there can be no assurance that these charter rates and vessel values will return to their previous high levels

Charter rates in the tanker industry are volatile. We anticipate that future demand for our vessels, and in turn our future charter rates, will be dependent upon economic growth in the world's economy as well as seasonal and regional changes in demand and changes in the capacity of the world's fleet. We believe that these charter rates are the result of economic growth in the world economy that exceeds growth in global vessel capacity. There can be no assurance that economic growth will not stagnate or decline leading to a further decrease in vessel values and charter rates. A further decline in vessel values and charter rates could have an adverse effect on our business, financial condition, results of operation and ability to pay dividends.

5

Any decrease in shipments of crude oil may adversely affect our financial performance

The demand for our oil tankers derives primarily from demand for Arabian Gulf, West African, North Sea and Carribean crude oil, which, in turn, primarily depends on the economies of the world's industrial countries and competition from alternative energy sources. A wide range of economic, social and other factors can significantly affect the strength of the world's industrial economies and their demand for crude oil from the mentioned geographical areas. One such factor is the price of worldwide crude oil. The world's oil markets have experienced high levels of volatility in the last 25 years. In July 2008, oil prices rose to a high of approximately $143 per barrel before decreasing to approximately $38 per barrel by the end of December 2008 and rising to approximately $92 by the end of December 2010.

Any decrease in shipments of crude oil from the above mentioned geographical areas would have a material adverse effect on our financial performance. Among the factors which could lead to such a decrease are:

· increased crude oil production from other areas;

· increased refining capacity in the Arabian Gulf or West Africa;

· increased use of existing and future crude oil pipelines in the Arabian Gulf or West Africa;

· a decision by Arabian Gulf or West African oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;

· armed conflict in the Arabian Gulf and West Africa and political or other factors; and

· the development and the relative costs of nuclear power, natural gas, coal and other alternative sources of energy.

An over-supply of tanker capacity may lead to reductions in charter rates, vessel values and profitability

In recent years, shipyards have produced a large number of new tankers. If the capacity of new vessels delivered exceeds the capacity of tankers being scrapped and converted to non-trading tankers, tanker capacity will increase. If the supply of tanker capacity increases and the demand for tanker capacity does not increase correspondingly, charter rates could materially decline. A reduction in charter rates and the value of our vessels may have a material adverse effect on our results of operations, our ability to pay dividends and our compliance with loan covenants.

Dry Bulk

Charter hire rates for dry bulk vessels may decrease in the future, which may adversely affect our earnings

The dry bulk shipping industry is cyclical with attendant volatility in charterhire rates and profitability. The degree of charterhire rate volatility among different types of dry bulk vessels has varied widely, and charterhire rates for dry bulk vessels have declined significantly from historically high levels. Fluctuations in charter rates result from changes in the supply and demand for vessel capacity and changes in the supply and demand for the major commodities carried by water internationally. Because the factors affecting the supply and demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable.

Factors that influence demand for vessel capacity include:

· supply and demand for energy resources, commodities, semi-finished and finished consumer and industrial products;

· changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products;

· the location of regional and global exploration, production and manufacturing facilities;

6

· the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;

· the globalization of production and manufacturing;

· global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes;

· developments in international trade;

· changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;

· environmental and other regulatory developments;

· currency exchange rates; and

· weather.

Factors that influence the supply of vessel capacity include:

· number of newbuilding deliveries;

· scrapping of older vessels;

· vessel casualties; and

· number of vessels that are out of service.

Demand for our dry bulk vessels is dependent upon economic growth in the world's economies, seasonal and regional changes in demand, changes in the capacity of the global dry bulk fleet and the sources and supply of dry bulk cargo transported by sea. Given the large number of new dry bulk carriers currently on order with shipyards, the capacity of the global dry bulk carrier fleet seems likely to increase and economic growth may not resume in areas that have experienced a recession or continue in other areas. Adverse economic, political, social or other developments could have a material adverse effect on our business and operating results.

A continued downturn in the dry bulk carrier charter market may have an adverse effect on our earnings and our ability to comply with our loan covenants

The abrupt and dramatic downturn in the dry bulk charter market has severely affected the dry bulk shipping industry.  The Baltic Dry Index, an index published by The Baltic Exchange of shipping rates for 20 key dry bulk routes, fell 94% from a peak of 11,793 in May 2008 to a low of 663 in December 2008. During 2009, the BDI remained volatile, reaching a low of 772 on January 5, 2009 and a high of 4,661 on November 19, 2009. The BDI came under pressure in December 2009 and January 2010, reaching a low of 2,571 on February 12, 2010 as stalled iron ore pricing negotiations added uncertainty to the freight markets. The index then staged a modest recovery based on strong demand for commodities from Asia and a recovering global market, but it has remained somewhat volatile due to increases in vessel supply. As of the end of December 2010, the index stood at 1,773. This downturn in dry bulk charter rates and their volatility, which has resulted from the economic dislocation worldwide and the disruption of the credit markets, have had a number of adverse consequences for dry bulk shipping, including, among other things:

· an absence of financing for vessels;

· no active second-hand market for the sale of vessels;

· extremely low charter rates, particularly for vessels employed in the spot market;

· widespread loan covenant defaults in the dry bulk shipping industry; and

7

· declaration of bankruptcy by some operators and ship owners as well as charterers.

The occurrence of one or more of these events could adversely affect our business, results of operations, cash flows, financial condition and ability to pay dividends.  There can be no assurance that the dry bulk charter market will recover over the next several months and the market could continue to decline further.

Dry bulk carrier values have also declined both as a result of a slowdown in the availability of global credit and the significant deterioration in charter rates. Charter rates and vessel values have been affected in part by the lack of availability of credit to finance both vessel purchases and purchases of commodities carried by sea, resulting in a decline in cargo shipments, and the excess supply of iron ore in China, which resulted in falling iron ore prices and increased stockpiles in Chinese ports.   There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether the recent improvement will continue. Charter rates may remain at low levels for some time which will adversely affect our revenue and profitability.

In addition, because the market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels, which may adversely affect our earnings.  If we sell vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale may be at less than the vessel's carrying amount in our financial statements, resulting in a loss and a reduction in earnings.

An oversupply of dry bulk carrier capacity may lead to reductions in charterhire rates and profitability

The market supply of dry bulk carriers has been increasing as a result of the delivery of numerous newbuilding orders over the last few years. Newbuildings were delivered in increasing numbers starting at the beginning of 2006 and continued to be delivered in increasing numbers from 2007 through 2010.

An oversupply of dry bulk carrier capacity may result in a reduction of charterhire rates, as evidenced by historically low rates in December 2008. If such dry bulk carrier capacity increase continues, we may only be able to charter our vessels at reduced or unprofitable rates, or we may not be able to charter these vessels at all. The occurrence of these events could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Shipping Generally

Risks involved with operating ocean-going vessels could affect our business and reputation, which could have a material adverse effect on our results of operations and financial condition

The operation of an ocean-going vessel carries inherent risks.  These risks include the possibility of:

· a marine disaster;

· terrorism;

· environmental accidents;

· cargo and property losses or damage; and

· business interruptions caused by mechanical failure, human error, war, terrorism, piracy, political action in various countries, labor strikes, or adverse weather conditions.

Any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in an oil spill or other environmental disaster may harm our reputation as a safe and reliable tanker operator.

The current global economic downturn may negatively impact our business

In recent years, operating businesses in the global economy have faced tightening credit, weakening demand for goods and services, deteriorating international liquidity conditions, and declining markets. At times, lower demand for dry bulk cargoes and crude oil as well as diminished trade credit available for the delivery of such dry bulk cargoes and crude oil have led to decreased demand for dry bulk vessels and tankers, respectively, creating downward pressure on charter rates. Although vessel values have stabilized over the past few months, general market volatility has resulted from uncertainty about sovereign debt and fears of countries such as Greece, Portugal and Spain defaulting on their governments' financial obligations. If the current global economic environment persists or worsens, we may be negatively affected in the following ways:

8

· we may not be able to employ our vessels at charter rates as favorable to us as historical rates or operate our vessels profitably; and

· the market value of our vessels could decrease, which may cause us to recognize losses if any of our vessels are sold or if their values are impaired.

The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Acts of piracy on ocean-going vessels could adversely affect our business

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden off the coast of Somalia. Throughout 2009 and 2010, the frequency of piracy incidents increased significantly, particularly in the Gulf of Aden off the coast of Somalia. If these piracy attacks result in regions in which our vessels are deployed being characterized by insurers as "war risk" zones, or Joint War Committee (JWC) "war and strikes" listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain.  In addition, crew costs, including costs which may be incurred to the extent we employ onboard security guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, results of operations, cash flows, financial condition and ability to pay dividends.

World events could affect our results of operations and financial condition

Terrorist attacks in New York on September 11, 2001, in London on July 7, 2005 and in Mumbai on November 26, 2008 and the continuing response of the United States and others to these attacks, as well as the threat of future terrorist attacks in the United States or elsewhere, continues to cause uncertainty in the world's financial markets and may affect our business, operating results and financial condition. The continuing presence of United States and other armed forces in Iraq and Afghanistan may lead to additional acts of terrorism and armed conflict around the world including North Africa may contribute to further economic instability in the global financial markets and may affect our business, operating results and financial condition. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

Terrorist attacks on vessels, such as the October 2002 attack on the M.V. Limburg, a very large crude carrier not related to us, may in the future also negatively affect our operations and financial condition and directly impact our vessels or our customers. Future terrorist attacks could result in increased volatility and turmoil of the financial markets in the United States and globally. Any of these occurrences, or the perception that our vessels are potential terrorist targets, could have a material adverse impact on our revenues and costs.

The recent earthquake and tsunami in Japan may have an adverse effect on our business, results of operations, financial condition and ability to pay dividends

Japan is one of the world's leading importers of oil and dry bulk commodities. The earthquake and tsunami that occurred in Japan on March 11, 2011 have caused an estimated $180 billion of damage and have threatened to send the Japanese economy into a recession. As of the date of this annual report, the extent to which the earthquake and tsunami will affect the international shipping industry is unclear. A prolonged recovery period coupled with a relatively stagnant Japanese economy could decrease oil and dry bulk imports to the world's third-largest economy. This, in turn, could have a material adverse effect on our business and results of operations.

9

If our vessels call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, that could adversely affect our reputation and the market for our common stock

From time to time on charterers' instructions, our vessels may call on ports located in Iran, which is a country subject to sanctions and embargoes imposed by the United States government and a country identified by the U.S. government as a state sponsor of terrorism. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. With effect from July 1, 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act ("CISADA"), which expanded the scope of the former Iran Sanctions Act. Among other things, CISADA expands the application of the prohibitions to non-U.S. companies, such as our company, and introduces limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in our company. Additionally, some investors may decide to divest their interest, or not to invest, in our company simply because we do business with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of our common stock may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

Compliance with safety and other vessel requirements imposed by classification societies may be costly and could reduce our net cash flows and net income

The hull and machinery of every commercial vessel must be certified as being "in class" by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention.

A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel's machinery may be placed on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. We expect our vessels to be on special survey cycles for hull inspection and continuous survey cycles for machinery inspection. Every vessel is also required to be drydocked every two and a half to five years for inspection of its underwater parts.

Compliance with the above requirements may result in significant expense. If any vessel does not maintain its class or fails any annual, intermediate or special survey, the vessel will be unable to trade between ports and will be unemployable, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

We are subject to complex laws and regulations, including environmental laws and regulations, that can adversely affect our business, results of operations and financial condition

Our operations will be subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These requirements include, but are not limited to, the U.S. Oil Pollution Act of 1990, or OPA, the International Maritime Organization, or IMO, International Convention on Civil Liability for Oil Pollution Damage of 1969 (as from time to time amended) generally referred to as CLC, the IMO International Convention for the Prevention of Pollution from Ships of 1973 (as from time to time amended), generally referred to as MARPOL, the IMO International Convention for the Safety of Life at Sea of 1974 (as from time to time amended), generally referred to as SOLAS, the IMO International Convention on Load Lines of 1966  (as from time to time amended) and the U.S. Maritime Transportation Security Act of 2002.  Compliance with such laws and regulations, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels.  Compliance with such laws and regulations may require us to obtain certain permits or authorizations prior to commencing operations.  Failure to obtain such permits or authorizations could materially impact our business results of operations, financial conditions and ability to pay dividends by delaying or limiting our ability to accept charterers.  We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions including greenhouse gases, the management of ballast waters, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents.  These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash.  A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations.  Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability, without regard to whether we were negligent or at fault.  Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil in U.S. waters, including the 200-nautical mile exclusive economic zone around the United States.  An oil spill could also result in significant liability, including fines, penalties, criminal liability and remediation costs for natural resource damages under other international and U.S. Federal, state and local laws, as well as third-party damages, including punitive damages, and could harm our reputation with current or potential charterers of our tankers.  We will be required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents.  Although our technical manager will arrange for insurance to cover our vessels with respect to certain environmental risks, there can be no assurance that such insurance will be sufficient to cover all such risks or that any claims will not have a material adverse effect on our business, financial condition, results of operations and cash flows.

10

Furthermore, the explosion of the Deepwater Horizon and the subsequent release of oil into the Gulf of Mexico, or other events, may result in further regulation of the tanker industry, and modifications to statutory liability schemes, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by "arresting" or "attaching" a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could result in a significant loss of earnings for the related off-hire period. In addition, in jurisdictions where the "sister ship" theory of liability applies, a claimant may arrest the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. In countries with "sister ship" liability laws, claims might be asserted against us or any of our vessels for liabilities of other vessels that we own.

Governments could requisition our vessels during a period of war or emergency resulting in a loss of earnings

A government of a vessel's registry could requisition for title or seize one or more of our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. A government could also requisition one or more of our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Risks Related to Our Business

A drop in spot charter rates may provide an incentive for some charterers to default on their charters

When we enter into a time charter, charter rates under that charter are fixed for the term of the charter.  If the spot charter rates or short-term time charter rates in the tanker or dry bulk shipping industry, as applicable, become significantly lower than the time charter equivalent rates that some of our charterers are obligated to pay us under our existing charters, the charterers may have incentive to default under that charter or attempt to renegotiate the charter. If our charterers fail to pay their obligations, we would have to attempt to re-charter our vessels at lower charter rates, which would affect our ability to comply with our loan covenants and operate our vessels profitably. If we are not able to comply with our loan covenants and our lenders choose to accelerate our indebtedness and foreclose their liens, we could be required to sell vessels in our fleet and our ability to continue to conduct our business would be impaired.

11

The operation of dry bulk carriers and tankers each involve certain unique operational risks

The operation of dry bulk carriers has certain unique operational risks. With a dry bulk carrier, the cargo itself and its interaction with the ship can be a risk factor. By their nature, dry bulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure.  In addition, dry bulk carriers are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold), and small bulldozers. This treatment may cause damage to the dry bulk carrier. Dry bulk carriers damaged due to treatment during unloading procedures may be more susceptible to a breach to the sea. Hull breaches in dry bulk carriers may lead to the flooding of their holds. If a dry bulk carrier suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the dry bulk carrier's bulkheads leading to the loss of the dry bulk carrier.

The operation of tankers has unique operational risks associated with the transportation of oil.  An oil spill may cause significant environmental damage, and a catastrophic spill could exceed the insurance coverage available. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tankers.

If we are unable to adequately maintain or safeguard our vessels we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, results of operations.  In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

Purchasing and operating previously owned, or secondhand, vessels may result in increased operating costs and vessels off-hire, which could adversely affect our earnings

Our current business strategy includes growth through the acquisition of previously owned vessels. Even following a physical inspection of secondhand vessels prior to purchase, we do not have the same knowledge about their condition and cost of any required (or anticipated) repairs that we would have had if these vessels had been built for and operated exclusively by us. Accordingly, we may not discover defects or other problems with such vessels prior to purchase. Any such hidden defects or problems, when detected may be expensive to repair, and if not detected, may result in accidents or other incidents for which we may become liable to third parties. Also, when purchasing previously owned vessels, we do not receive the benefit of any builder warranties if the vessels we buy are older than one year.

In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less fuel efficient than more recently constructed vessels due to improvements in engine technology.

Governmental regulations, safety and other equipment standards related to the age of vessels may require expenditures for alterations or the addition of new equipment to some of our vessels and may restrict the type of activities in which these vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

The volatility in both dry bulk and tanker charter rates, and vessel values, may affect our ability to comply with various covenants in our loan agreements

Our loan agreements for our borrowings, which are secured by liens on our vessels, contain various financial covenants. Among those covenants are requirements that relate to our financial position, operating performance and liquidity. For example, there are financial covenants that require us to maintain (i) a minimum value adjusted equity that is based, in part, upon the market value of the vessels securing the loans, (ii) minimum levels of free cash, and (iii) a positive working capital.  The market value of dry bulk and tanker vessels is sensitive, among other things, to changes in the dry bulk and tanker charter markets, respectively, with vessel values deteriorating in times when dry bulk and tanker charter rates, as applicable, are falling and improving when charter rates are anticipated to rise.  Such conditions may result in our not being in compliance with these loan covenants.  In such a situation, unless our lenders were willing to provide waivers of covenant compliance or modifications to our covenants, or would be willing to refinance our indebtedness, we may have to sell vessels in our fleet and/or seek to raise additional capital in the equity markets in order to comply with our loan covenants.  Furthermore, if the value of our vessels deteriorates significantly, we may have to record an impairment adjustment in our financial statements, which would adversely affect our financial results and further hinder our ability to raise capital.

12

If we are not in compliance with our covenants and are not able to obtain covenant waivers or modifications, our lenders could require us to post additional collateral, enhance our equity and liquidity, increase our interest payments or pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, or they could accelerate our indebtedness, which would impair our ability to continue to conduct our business.  In such an event, our auditors may give either an unqualified opinion with an explanatory paragraph relating to the disclosure in the notes to our financial statements as to the substantial doubt of our ability to continue as a going concern, or a qualified, adverse or disclaimer of opinion, which could lead to additional defaults under our loan agreements. If our indebtedness is accelerated, we might not be able to refinance our debt or obtain additional financing and could lose our vessels if our lenders foreclose their liens.  In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our loan agreements.

Our ability to obtain additional debt financing may be dependent on the performance of our then-existing charters and the creditworthiness of our charterers

The actual or perceived credit quality of our charterers, and any defaults by them, may materially affect our ability to obtain the additional capital resources required to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at anticipated costs or at all may materially affect our results of operation and our ability to implement our business strategy.

Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition

We plan to operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates.  This seasonality may result in quarter-to-quarter volatility in our operating results, as our vessels will trade in the spot market. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can broadly be classified into two main categories: increased demand prior to Northern Hemisphere winters as heating oil consumption increases and increased demand for gasoline prior to the summer driving season in the United States.

Because the market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels which may adversely affect our earnings

The fair market value of vessels may increase and decrease depending on but not limited to the following factors:

· general economic and market conditions affecting the shipping  industry;

· competition from other shipping companies;

· types and sizes of vessels;

· other modes of transportation;

· cost of newbuildings;

· shipyard capacity;

· governmental or other regulations;

· age of vessels;

· prevailing level of charter rates; and

13

· technological advances.

During the period a vessel is subject to a charter, we will not be permitted to sell it to take advantage of increases in vessel values without the charterers' agreement. If we sell a vessel at a time when ship prices have fallen, the sale may be at less than the vessel's carrying amount on our financial statements, with the result that we could incur a loss and a reduction in earnings. In addition, if we determine at any time that a vessel's future limited useful life and earnings require us to impair its value on our financial statements, that could result in a charge against our earnings and a reduction of our shareholders' equity. It is possible that the market value of our vessels will decline in the future and this will also have an adverse effect on some of the financial covenants in our loan agreements.

We may be unable to successfully compete with other vessel operators for charters, which could adversely affect our results of operations and financial position

The operation of tankers and dry bulk vessels and transportation of crude and petroleum products and dry bulk cargoes is extremely competitive. Through our operating subsidiaries we compete with other vessel owners (including major oil companies as well as independent companies), and, to a lesser extent, owners of other size vessels. The tanker and dry bulk markets are highly fragmented. It is possible that we could not obtain suitable employment for our vessels, which could adversely affect our results of operations and financial position.

Our time and bareboat charters may limit our ability to benefit from any improvement in charter rates, and at the same time, our revenues may be adversely affected if we do not successfully employ our vessels on the expiration of our charters

Currently, some of our vessels are contractually committed to time and bareboat charters. Although our time and bareboat charters generally provide reliable revenues, they also limit the portion of our fleet available for spot market voyages during an upswing in the tanker industry cycle, when spot market voyages might be more profitable. By the same token, we cannot assure you that we will be able to successfully employ our vessels in the future or renew our existing charters at rates sufficient to allow us to operate our business profitably or meet our obligations.  A decline in charter or spot rates or a failure to successfully charter our vessels could have a material adverse effect on our business, financial condition, results of operation and ability to pay dividends.

Delays or defaults by the shipyards in the construction of our newbuildings could increase our expenses and diminish our net income and cash flows

We currently have newbuilding contracts for the construction of a total of five VLCCs with the Chinese shipyard Zhoushan Jinhaiwan Shipyard Co. Ltd, or Jinhaiwan, and two Suezmax vessels with the Chinese shipyard, Jiangsu Rongsheng Heavy Industries Group Co. Ltd., or Rongsheng. These projects are subject to the risk of delay or defaults by the shipyards caused by, among other things, unforeseen quality or engineering problems, work stoppages, weather interference, unanticipated cost increases, delays in receipt of necessary equipment, and inability to obtain the requisite permits or approvals. In accordance with industry practice, in the event the shipyards are unable or unwilling to deliver the vessels, we may not have substantial remedies. Failure to construct or deliver the ships by the shipyards or any significant delays could increase our expenses and diminish our net income and cash flows.

We cannot assure you that we will be able to refinance indebtedness incurred under our current credit facilities

We cannot assure you that we will be able to refinance our indebtedness on terms that are acceptable to us or at all. If we are not able to refinance our indebtedness, we will have to dedicate a greater portion of our cash flow from operations to pay the principal and interest of this indebtedness. We cannot assure you that we will be able to generate cash flow in amounts that are sufficient for these purposes. If we are not able to satisfy these obligations, we may have to undertake alternative financing plans or sell our assets. In addition, debt service payments under our credit facilities may limit funds otherwise available for working capital, capital expenditures, payment of dividends and other purposes. If we are unable to meet our debt obligations, or if we otherwise default under our credit facilities, our lenders could declare the debt, together with accrued interest and fees, to be immediately due and payable and foreclose on our fleet, which could result in the acceleration of other indebtedness that we may have at such time and the commencement of similar foreclosure proceedings by other lenders.

14

As we expand our fleet, we may not be able to recruit suitable employees and crew for our vessels which may limit our growth and cause our financial performance to suffer

As we expand our fleet, we will need to recruit suitable crew, shoreside, administrative and management personnel.  We may not be able to continue to hire suitable employees as we expand our fleet of vessels.  If we are unable to recruit suitable employees and crews, we may not be able to provide our services to customers, our growth may be limited and our financial performance may suffer.

We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or otherwise adversely affect our business

We have entered into various contracts, including charterparties with our customers, newbuilding contracts with shipyards and our credit facilities. Such agreements subject us to counterparty risks. Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities. In addition, in depressed market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charters. Our charterers may fail to pay charterhire or attempt to renegotiate charter rates. Should a charterer fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure on the spot market or on charters may be at lower rates, depending on the then existing charter rate levels, compared to the rates currently being charged for our vessels. In addition, if the charterer of a vessel in our fleet that is used as collateral under our credit facility or any other loan agreement defaults on its charter obligations to us, such default may constitute an event of default under our credit facility or the relevant loan agreement, which may allow the bank to exercise remedies under our credit facility or the loan agreement. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, and compliance with covenants in our loan agreements. Further, if we had to find a replacement technical manager, we may need approval from our lenders to change the technical manager.

The ability of each of the counterparties to perform its obligations under a contract with us or contracts entered into on our behalf will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the shipping sector, the overall financial condition of the counterparty, charter rates received for tanker vessels and the supply and demand for commodities. Should a counterparty fail to honor its obligations under any such contracts, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Declines in charter rates and other market deterioration could cause us to incur impairment charges

The carrying values of our vessels are reviewed whenever events or changes in circumstances indicate that the carrying amount of the vessel may no longer be recoverable. We assess recoverability of the carrying value by estimating the future net cash flows expected to result from the vessel, including eventual disposal. If the future net undiscounted cash flows and the estimated fair market value of the vessel are less than the carrying value an impairment loss is recorded equal to the difference between the vessel's carrying value and fair value. Any impairment charges incurred as a result of declines in charter rates and other market deterioration could negatively affect our business, financial condition, operating results or the trading price of our Ordinary Shares.

Fuel or bunker prices, may adversely affect our profits

For vessels on voyage charters, fuel oil, or bunkers, is a significant, if not the largest, expense. Changes in the price of fuel may adversely affect our profitability to the extent we have vessels on voyage charters. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by OPEC and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.

15

Operational risks and damage to our vessels could adversely impact our performance

If our vessels suffer damage due to inherent operational risks, we may experience unexpected drydocking costs and delays or total loss of our vessels, which may adversely affect our revenues and business and financial condition.

Our vessels and their cargoes will be at risk of being damaged or lost because of events such as marine disasters, bad weather and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy and other circumstances or events. Changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These hazards may result in death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships and market disruptions, delay or rerouting.

If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover at all or in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located relative to our vessels' positions. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities may adversely affect our business and financial condition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.  If we are unable to adequately maintain or safeguard our vessels, we may be unable to prevent any such damage, costs or loss which could negatively impact our business, financial condition, results of operations and cash flows.

Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and cause disruption of our business

International shipping is subject to security and customs inspection and related procedures in countries of origin, destination and trans-shipment points. Since the events of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the U.S. Maritime Transportation Security Act of 2002, or MTSA, came into effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. These security procedures can result in delays in the loading, offloading or trans-shipment and the levying of customs duties, fines or other penalties against  exporters or importers and, in some cases, carriers. Future changes to the existing security procedures may be implemented that could affect the tanker sector. These changes have the potential to impose additional financial and legal obligations on carriers and, in certain cases, to render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the volume of goods shipped, resulting in a decreased demand for vessels and have a negative effect on our business, revenues and customer relations.

Risks Related to Our Company

Incurrence of expenses or liabilities may reduce or eliminate distributions

Our policy is to make distributions to shareholders based on earnings and cash flow, and our dividends have fluctuated based on such factors.  The amount and timing of dividends will depend on our earnings, market prospects, capital expenditure program, investment opportunities and other factors.  However, we could incur other expenses or contingent liabilities that would reduce or eliminate the cash available for distribution by us as dividends.  In addition, the timing and amount of dividends, if any, is at the discretion of our Board of Directors. We cannot assure you that we will pay dividends.

Our financing obligations could affect the ability of our subsidiaries to incur additional indebtedness or our ability to engage in certain transactions

Our financing agreements impose operational and financing restrictions on us and/or our subsidiaries, which may significantly limit or prohibit, among other things, our subsidiaries' ability to, without the consent of our lenders, incur additional indebtedness, create liens, make certain investments or, if a default has been declared, to pay dividends, our ability to sell capital shares of subsidiaries and engage in mergers and acquisitions. In addition, our lenders may accelerate the maturity of indebtedness under our financing agreements and foreclose on the collateral securing the indebtedness upon the occurrence of certain events of default, including our failure to comply with any of the covenants contained in our financing agreements, not rectified within the permitted time. For instance, declining vessel values could lead to a breach of covenants under our financing agreements. If we are unable to prepay, pledge additional collateral or obtain waivers from our lenders, our lenders could accelerate our debt and foreclose on our vessels.

16

We may not be able to finance our future capital commitments

We cannot guarantee that we will be able to obtain additional financing at all or on terms acceptable to us.  If adequate funds are not available, we may have to reduce expenditures for investments in new and existing projects, which could hinder our growth and prevent us from realizing potential revenues from prior investments which will have a negative impact on our cash flows and results of operations.

The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings

In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. Our current tanker fleet has an average age of approximately 11 years, and our current drybulk carrier fleet has an average age of approximately 20 years. As our fleet ages, we will incur increased costs. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates also increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations, including environmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which our vessels may engage. As our vessels age, market conditions might not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

If we do not set aside funds and are unable to borrow or raise funds for vessel replacement at the end of a vessel's useful life our revenue will decline, which would adversely affect our business, results of operations, financial condition and ability to pay dividends

If we do not set aside funds and are unable to borrow or raise funds for vessel replacement, we will be unable to replace the vessels in our fleet upon the expiration of their remaining useful lives. Our cash flows and income are dependent on the revenues earned by the chartering of our vessels. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, results of operations, financial condition and ability to pay dividends would be adversely affected. Any funds set aside for vessel replacement will not be available for dividends.

We may be unable to attract and retain key management personnel in the tanker industry, which may negatively impact the effectiveness of our management and our results of operation

Our success depends to a significant extent upon the abilities and efforts of our senior executives, and particularly John Fredriksen, our Chairman and Chief Executive Officer, for the management of our activities and strategic guidance. While we believe that we have an experienced management team, the loss or unavailability of one or more of our senior executives, and particularly Mr. Fredriksen, for any extended period of time could have an adverse effect on our business and results of operations.

If labor interruptions are not resolved in a timely manner, they could have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash

As of December 31, 2010, Frontline and its subsidiaries employed approximately 70 people in their respective offices in Bermuda, London, Oslo, Singapore and India. We contract with independent ship managers to manage and operate our vessels, including the crewing of those vessels. If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our operations from being carried out as we expect and could have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.

17

We may not have adequate insurance to compensate us if our vessels are damaged or lost

We procure insurance for our fleet against those risks that we believe the shipping industry commonly insures against. These insurances include hull and machinery insurance, protection and indemnity insurance, which include environmental damage and pollution insurance coverage, and war risk insurance. We can give no assurance that we will be adequately insured against all risks. We may not be able to obtain adequate insurance coverage for our fleet in the future. The insurers may not pay particular claims. Our insurance policies may contain deductibles for which we will be responsible and limitations and exclusions which, may increase our costs or lower our revenue.

Although we do not anticipate any difficulty in having our technical manager initially obtain insurance policies for us, we cannot assure you that we will be able to renew such policies on the same or commercially reasonable terms, or at all, in the future. For example, more stringent environmental regulations have in the past led to increased costs for, and in the future may result in the lack of availability of, protection and indemnity insurance against risks of environmental damage or pollution. Any uninsured or underinsured loss could harm our business, results of operations, cash flows, financial condition and ability to pay dividends. In addition, our insurance may be voidable by the insurers as a result of certain of our actions, such as our vessels failing to maintain certification with applicable maritime self-regulatory organizations. Further, we cannot assure you that our insurance policies will cover all losses that we incur, or that disputes over insurance claims will not arise with our insurance carriers. Any claims covered by insurance would be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles could be material. In addition, our insurance policies may be subject to limitations and exclusions, which may increase our costs or lower our revenues, thereby possibly having a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

We may be subject to calls because we obtain some of our insurance through protection and indemnity associations

We may be subject to increased premium payments, or calls, if the value of our claim records, the claim records of our fleet managers, and/or the claim records of other members of the protection and indemnity associations through which we receive insurance coverage for tort liability (including pollution-related liability) significantly exceed projected claims. In addition, our protection and indemnity associations may not have enough resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations and financial condition.

Because we are a foreign corporation, you may not have the same rights that a shareholder in a United States corporation may have

We are a Bermuda company. Our memorandum of association and by-laws and the Bermuda Companies Act 1981, as amended, govern our affairs. Investors may have more difficulty in protecting their interests in the face of actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction. Under Bermuda law a director generally owes a fiduciary duty only to the company; not to the company's shareholders. Our shareholders may not have a direct course of action against our directors. In addition, Bermuda law does not provide a mechanism for our shareholders to bring a class action lawsuit under Bermuda law. Further, our bye-laws provide for the indemnification of our directors or officers against any liability arising out of any act or omission except for an act or omission constituting fraud, dishonesty or illegality.

United States tax authorities could treat the Company as a "passive foreign investment company," which could have adverse United States federal income tax consequences to United States shareholders

A foreign corporation will be treated as a "passive foreign investment company," or PFIC, for United States federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation's assets produce or are held for the production of those types of "passive income."  For purposes of these tests, "passive income" includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business.  For purposes of these tests, income derived from the performance of services does not constitute "passive income."  United States shareholders of a PFIC are subject to a disadvantageous United States federal income tax regime with respect to the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

18

Based on our current and proposed method of operation, we do not believe that we are, have been or will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering and voyage chartering activities as services income, rather than rental income.  Accordingly, we believe that our income from these activities does not constitute "passive income," and the assets that we own and operate in connection with the production of that income do not constitute assets that produce, or are held for the production of, "passive income."

Although there is no direct legal authority under the PFIC rules addressing our method of operation there is substantial legal authority supporting our position consisting of case law and United States Internal Revenue Service, or the IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes.  However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC.  Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of our operations.

If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders will face adverse United States federal income tax consequences.  Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986, as amended, or the Code (which election could itself have adverse consequences for such shareholders, as discussed below under "Taxation"), such shareholders would be liable to pay United States federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our Ordinary Shares, as if the excess distribution or gain had been recognized ratably over the shareholder's holding period of our Ordinary Shares.  See "Taxation" for a more comprehensive discussion of the United States federal income tax consequences to United States shareholders if we are treated as a PFIC.

We may have to pay tax on United States source income, which would reduce our earnings

Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, may be subject to a 4% United States federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated thereunder.

We expect that we and each of our subsidiaries will qualify for this statutory tax exemption and we will take this position for United States federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to United States federal income tax on our United States source shipping income.  For example, we would no longer qualify for exemption under Section 883 of the Code for a particular taxable year if shareholders with a five percent or greater interest in the our Ordinary Shares owned, in the aggregate, 50% or more of our outstanding Ordinary Shares for more than half the days during the taxable year.  Due to the factual nature of the issues involved, there can be no assurances on our tax-exempt status or that of any of our subsidiaries.

If we or our subsidiaries are not entitled to exemption under Section 883 of the Code for any taxable year, we, or our subsidiaries, could be subject during those years to an effective 2% United States federal income tax on gross shipping income derived during such a year that is attributable to the transport of cargoes to or from the United States. The imposition of this tax would have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders.

Our Liberian subsidiaries may not be exempt from Liberian taxation, which would materially reduce our Liberian subsidiaries', and consequently our, net income and cash flow by the amount of the applicable tax

The Republic of Liberia enacted an income tax law generally effective as of January 1, 2001, or the New Act, which repealed, in its entirety, the prior income tax law in effect since 1977, pursuant to which our Liberian subsidiaries, as non-resident domestic corporations, were wholly exempt from Liberian tax.

19

In 2004, the Liberian Ministry of Finance issued regulations, or the New Regulations, pursuant to which a non-resident domestic corporation engaged in international shipping, such as our Liberian subsidiaries, will not be subject to tax under the New Act retroactive to January 1, 2001. In addition, the Liberian Ministry of Justice issued an opinion that the New Regulations were a valid exercise of the regulatory authority of the Ministry of Finance. Therefore, assuming that the New Regulations are valid, our Liberian subsidiaries will be wholly exempt from tax as under prior law. In 2009, the Liberian Ministry of Finance adopted an Economic Stimulus Act to clarify the tax treatment of non-resident Liberian corporations. Although such Act was signed into law by the President of Liberia it was never formally published, which is a requirement to make it effective. We are still waiting advice from Liberia regarding publication of the 2009 Economic Stimulus Act.

If our Liberian subsidiaries were subject to Liberian income tax under the New Act, our Liberian subsidiaries would be subject to tax at a rate of 35% on their worldwide income. As a result, their, and subsequently our, net income and cash flow would be materially reduced by the amount of the applicable tax. In addition, we, as a shareholder of the Liberian subsidiaries, would be subject to Liberian withholding tax on dividends paid by the Liberian subsidiaries at rates ranging from 15% to 20%.

Because our offices and most of our assets are outside the United States, you may not be able to bring suit against us, or enforce a judgment obtained against us in the United States

Our executive offices, administrative activities and assets are located outside the United States. As a result, it may be more difficult for investors to effect service of process within the United States upon us, or to enforce both in the United States and outside the United States judgments against us in any action, including actions predicated upon the civil liability provisions of the federal securities laws of the United States.

Investor confidence and the market price of our ordinary shares may be adversely impacted if we are unable to comply with Section 404 of the Sarbanes-Oxley Act of 2002

We are subject to Section 404 of the Sarbanes-Oxley Act of 2002, which requires us to include in our Annual Report on Form 20-F our management's report on, and assessment of the effectiveness of, our internal controls over financial reporting. In addition, our independent registered public accounting firm is required to attest to and report on management's assessment of the effectiveness of our internal controls over financial reporting. If we fail to maintain the adequacy of our internal controls over financial reporting, we will not be in compliance with all of the requirements imposed by Section 404. Any failure to comply with Section 404 could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements, which ultimately could harm our business and could negatively impact the market price of our common stock.

ITEM 4. INFORMATION ON THE COMPANY

A.  HISTORY AND DEVELOPMENT OF THE COMPANY

The Company

We are Frontline Ltd., a Bermuda-based shipping company incorporated in Bermuda as a Bermuda exempted company under the Bermuda Companies Law of 1981 on June 12, 1992 (Company No. EC-17460). Our registered and principal executive offices are located at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda, and our telephone number is +(1) 441 295 6935.

We are engaged primarily in the ownership and operation of oil tankers and oil/bulk/ore, or OBO, carriers, which are currently configured to carry dry cargo. We operate oil tankers of two sizes: VLCCs, which are between 200,000 and 320,000 dwt, and Suezmaxes, which are vessels between 120,000 and 170,000 dwt. We operate through subsidiaries and partnerships located in the Bahamas, Bermuda, the Cayman Islands, India, the Isle of Man, Liberia, Norway, the United Kingdom and Singapore. We are also involved in the charter, purchase and sale of vessels. Since 1996, we have emerged as a leading tanker company within the VLCC and Suezmax size sectors of the market.

We have our origin in Frontline AB, which was founded in 1985, and which was listed on the Stockholm Stock Exchange from 1989 to 1997. In May 1997, Frontline AB was redomiciled from Sweden to Bermuda and its shares were listed on the Oslo Stock Exchange. The change of domicile was executed through a share-for-share exchange offer from the then-newly formed Bermuda company, Frontline Ltd, or Old Frontline. In September 1997, Old Frontline initiated an amalgamation with London & Overseas Freighters Limited, or LOF, also a Bermuda company. This process was completed in May 1998. As a result of this transaction, Frontline became listed on the London Stock Exchange and on the NASDAQ National Market (in the form of American Depositary Shares, or ADSs, represented by American Depositary Receipts, or ADRs) in addition to its listing on the Oslo Stock Exchange.

20

The ADR program was terminated on October 5, 2001 and the ADSs were de-listed from the NASDAQ National Market on August 3, 2001. The Company's Ordinary Shares began trading on the New York Stock Exchange on August 6, 2001.

Vessel Acquisitions, Disposals and Other Significant Transactions

We entered into the following acquisitions and disposals in 2008, 2009, 2010 and 2011 to date:

Newbuilding and Option Contracts

As of December 31, 2007, we had contracts for the construction of four VLCC newbuildings and eight Suezmax newbuildings. In April 2008, we entered into a contract with Jinhaiwan for the delivery of four VLCC newbuildings. In April 2008, we also secured fixed price options, which were exercised in May 2008, for two similar VLCC newbuildings. As of December 31, 2008, we had contracts for the construction of ten VLCC newbuildings and eight Suezmax newbuildings.

Two of the VLCCs, Front Kathrine and Front Queen, were delivered to us on January 8, 2009 and May 18, 2009, respectively. In the second quarter of 2009, we reached agreements with two shipyards to cancel two VLCC and four Suezmax newbuilding contracts and agreed that the instalments already paid on the cancelled newbuildings be applied to, and set off against, future payments in the remaining newbuildings. In the third quarter of 2009, we reached agreement with Jinhaiwan whereby the financial exposure of $252 million on two VLCC newbuildings could be limited to the $54 million already paid. At December 31, 2009, we had newbuilding contracts for four Suezmaxes and six VLCCs.

During 2010, six newbuildings were completed. Four Suezmax vessels were delivered: the Northia on January 5, the Naticina on March 9, the Front Odin on May 5 and the Front Njord on August 12. Two VLCCs were delivered: the Front Cecilie on June 10 and the Front Signe on August 9. In June 2010, the Company entered into a contract with Rongsheng for the construction of two 156,900 dwt Suezmax newbuildings. The vessels are expected to be delivered in the first and second quarters of 2013. In September 2010, the Company announced that it had agreed with Jinhaiwan to re-structure the Company's VLCC newbuilding program at the yard. The Company agreed to take delivery of the two optional VLCCs at the yard and ordered one additional VLCC newbuilding, resulting in a commitment to take delivery of five 320,000 dwt VLCC newbuildings, with a total contract price of $525 million. As of December 31, 2010, the Company's newbuilding program comprised two Suezmax tankers and five VLCCs, which constitute a contractual cost of $650 million. As of December 31, 2010, the Company has paid $198.6 million and was committed to make further installments of $451.4 million.

Acquisitions and Disposals

In January 2008, Ship Finance sold the single hull vessel Front Maple to a third party and terminated our charter party for the vessel. We received a termination payment of $16.7 million.

In March 2008, we agreed with Ship Finance to terminate the long-term charter party between the companies for the single hull VLCC Front Sabang. Ship Finance simultaneously sold the vessel. We received a compensation payment of approximately $25 million for the early termination of the charter party, which was recognized in the second quarter of 2008 at the time of delivery to the new owners.

In June 2008, we acquired en bloc five secondhand double hull Suezmax tankers built between 1992 and 1996 from Top Ships Inc. for an aggregate purchase price of $240 million. We took delivery of these vessels between June 2008 and September 2008 and assumed existing time charters on three of the vessels. We allocated $247.3 million and a negative value of $7.3 million to the vessels and time charters, respectively.

21

In July 2009, we agreed with Ship Finance to terminate the long term charterparty for the single hull VLCC Front Duchess and received a compensation payment of approximately $2.4 million in October 2009.

In February 2010, we purchased the VLCC Front Vista from Ship Finance for $58.5 million. The Front Vista had been chartered in by the Company. Due to the termination of the charter, a compensation fee of $0.4 million was paid to Ship Finance. In March 2010, the Company sold the Front Vista. The sale price of $60.0 million will be settled in the payment of installments over a 10-year period.

In March 2010, we agreed with Ship Finance to terminate the long term charter party for the single hull VLCC Golden River. The termination of the charter took place in April 2010 and Ship Finance made a compensation payment to us of approximately $2.9 million for the early termination of the charter party.

In March 2010, we agreed to sell the single hull Suezmax Front Voyager and delivery to the buyer took place in April 2010.

In April 2010, we agreed to acquire two 2009-built 321,300 dwt double hull VLCC tankers; Callisto Glory and Andromeda Glory from an unrelated third party. The first vessel; renamed Front Eminence, was delivered on May 18, 2010 and the second vessel; renamed Front Endurance, was delivered on June 28, 2010.

In January 2011, we sold the VLCC Front Shanghai for net sale proceeds of $91.2 million. In connection with the sale, we agreed to charter back the vessel from the new owner for approximately two years at a rate of $35,000 per day. Delivery to the new owners took place on January 26, 2011.

In February 2011, we agreed with Ship Finance to terminate the long term charter parties between the companies for the two single hull VLCCs Ticen Sun and Front Ace and Ship Finance simultaneously sold the vessels. The termination of the charter parties took place in February 2011 and March 2011, respectively, and Ship Finance made a compensation payment to the Company of approximately $5.8 million for the early termination of the charter parties.

In March 2011, we exercised our option to acquire the 2002-built VLCC Front Eagle and sold the vessel to an unrelated third party for $67.0 million. In connection with the sale, we agreed to charter back the vessel from the new owner. The duration of the time charter is approximately two years at a rate of $32,500 per day. Delivery to the new owners is expected to take place in the second quarter of 2011.

In April 2011, we agreed with Ship Finance to terminate the long term charter party between the companies for the OBO vessel Front Leader and Ship Finance simultaneously sold the vessel. The termination of the charter party is expected to take place in the second quarter of 2011 and we expect to make a compensation payment to Ship Finance of approximately $7.7 million for the early termination of the charter party.

Charters and Redeliveries

In September 2008, we chartered out the Suezmax OBO carriers Front Guider and Front Viewer for a period of five years with commencement of charter early December 2008 and mid April 2009, respectively.

In November 2008, we chartered out the VLCC Front Energy for a three year period with delivery mid-November 2008 and the VLCC Front Champion for a period of one year with commencement of charter end November 2008.

In early December 2008, we redelivered Cosglory Lake after a total length of the charter party of approximately 3.5 years.

In December 2008, we entered into an agreement with Teekay Corporation to commercially combine their Suezmax tankers within the Gemini Pool, the world's largest Suezmax tanker pool. Our vessels entered the pool between January 8 and February 12, 2009.

22

In December 2008, we chartered out the Suezmax tanker Front Brabant for a three-year time charter with commencement in January 2009.

In January 2009, we entered into an agreement with Shell to charter out the two double hull Suezmax tankers Genmar Phoenix and Genmar Harriet G. on time charter for the remainder of their existing charters in.

In April 2009, we entered into an agreement with the charterer of Front Lady and Front Highness to amend the time charter agreements to bareboat agreements and extend the contracts for one additional year from the single hull phase-out date in 2010 to around April 2011 and August 2011, respectively. The charterers also assumed the drydocking for Front Lady. The vessels are operated as floating storage units and have ceased to trade as regular tankers. The vessels have been renamed "Ticen Ocean" and "Ticen Sun".

In early November and December 2009, we redelivered four of the five Suezmax tankers chartered in from Eiger. We redelivered the final vessel in February 2010.

In November 2009, we did not exercise the purchase options for Front Chief, Front Commander and Front Crown. We agreed instead to charter in the three vessels on one-year time charters at $29,000 per day.

In November 2009, we entered into an agreement to time charter out the OBO carrier Front Striver for a period of at least five months at a time charter rate of $40,000 per day gross.

In January 2010, we entered into an agreement to charter in the VLCC Desh Ujaala for a one year time charter at net $29,625 per day with one-year option period.

In January 2010, we signed a bareboat charter for the VLCC Edinburgh for a two year period with a two-year option period. The vessel is operated as a floating storage unit and ceased to trade as a regular tanker.

In March 2010 we agreed with Ship Finance to terminate the long-term charter party for the single hull VLCC Golden River. Ship Finance simultaneously sold the vessel to an unrelated third party. The termination of the charter took place in April 2010 and Ship Finance made a compensation payment to Frontline of approximately $2.9 million for the early termination of the charter party.

In June 2010, we received notices from the owners of the two chartered-in 2001-built Suezmax tankers, Front Melody and Front Symphony, and the two chartered-in 2000-built VLCCs, Front Tina and Front Commodore, that the owners exercised their option to extend the charter period for two years to the end of 2013 from the expiry of the mandatory lease period at the end of 2011. The owners have the option to further extend the charter periods until the end of 2015.

In June 2010, the single hull VLCC Front Duke was redelivered from her time charter agreement and subsequently entered into a bareboat charter agreement expiring at the end of 2012. The vessel is operated as a floating storage unit and has ceased to trade as a regular tanker.

With effect from July 1, 2010, we no longer chartered in the 15 Suezmax vessels we were chartering in from Nordic American Tanker Shipping Ltd. ("NATS") on floating rate time charters.

In September 2010, we entered into an agreement to time charter out two VLCCs; Front Eminence for a period of five years commencing November 2010 at a gross rate of $43,000 per day and Golden Victory for a period of three years commencing October 2010 at a gross rate of $40,000 per day. The latter has an option for the charterer to extend for an additional two years at a premium.

In November 2010, we extended the time-charter in agreements of Front Chief, Front Commander and Front Crown (all 1999-built double hull VLCCs); for one year from January 2011 at $26,500 per day per vessel.

In December 2010, the bareboat charter with Chevron Transport Corporation for the VLCC Antares Voyager terminated and the vessel was redelivered to the Company.

In January 2011, the bareboat charter with BP Shipping Limited for the VLCC Pioneer (previously British Pioneer) terminated and the vessel was redelivered to the Company.

23

In January 2011, the chartered-in VLCC Desh Ujaala was re-delivered to the owners and the British Pioneer was redelivered to the Company following the termination of the bareboat charter by BP.

Establishment and Spin-Off of Sealift Ltd

In January 2007, we established a separate entity named Sealift Ltd, or Sealift, to develop our heavy lift business. Sealift completed a private placement in the amount of $180.0 million and its shares were listed on the Norwegian over-the-counter (OTC) market in January 2007. We invested $60.0 million in the company and, following the initial private placement in January, we became a 33.3% shareholder. Sealift acquired four single-hull Suezmax vessels from us, which we were obligated to convert to heavy lift vessels for $100.0 million each. Sealift also acquired two Suezmax vessels from us for $38.0 million each and option contracts with a shipyard to convert these two additional Suezmax vessels into heavy lift vessels.  The total consideration for all six vessels acquired by Sealift is $476.0 million, of which $396.0 million was received in cash and $80.0 million in an interest free seller's credit.  $40.0 million of the interest free seller's credit was payable on the delivery of each of the final two converted vessels. Five of the vessels sold to Sealift were first acquired by Frontline from Ship Finance. We delivered the converted heavy lift vessels to Sealift in May and December 2007 and May and July 2008. The $80.0 million interest-free seller's credit was paid in July 2008 and we recorded a gain of $91.0 million in 2008 relating to the delivery of the converted heavylift vessels. We incurred net damages of $1.2 million with respect to the late delivery of the fourth and final converted heavylift vessel.

In May 2007, Sealift completed a reorganization with the Dockwise group of companies. As part of the transaction, Sealift completed a private placement of 39.8 million shares of which we purchased five million shares. Sealift also issued 94.1 million shares to the former Dockwise Ltd, or Dockwise, shareholders. Sealift was renamed Dockwise Ltd in July 2007. In October 2007, we sold our entire shareholding of 34,976,500 shares in Dockwise.

Establishment and spin-off of Independent Tankers Corporation Limited

In January 2008, we established Independent Tankers Corporation Limited, or ITCL, a Bermuda company and our wholly-owned subsidiary for the purpose of holding, by way of contribution, our interests in Independent Tankers Corporation, or ITC. ITC owns or leases six VLCC and four Suezmax tankers, which are financed through bonds in the U.S. market and financial lease arrangements. On February 20, 2008, our Board declared the distribution of a special dividend of 17.53% of the capital stock of ITCL to our shareholders. On February 28, 2008, we distributed to our shareholders one share of ITCL for every five shares of Frontline. Certain of our U.S. shareholders were excluded from the distribution and received a cash payment in lieu of shares equal to $0.34 per Frontline share. ITCL listed its shares on the Oslo OTC Market on March 7, 2008.

B.  BUSINESS OVERVIEW

As of December 31, 2010, our tanker and OBO fleet consisted of 73 vessels.  The fleet consists of 44 VLCCs, which are either owned or chartered in, 21 Suezmax tankers which are either owned or chartered in and eight Suezmax OBOs which are chartered in. We also had five VLCC newbuildings and two Suezmax newbuildings on order and three VLCCs under our commercial management.

We operate in two markets, the tanker and drybulk carrier markets, as an international provider of seaborne transportation of crude oil and drybulk cargoes. An analysis of revenues from these services is as follows:

(in thousands of $)	2010		2009		2008
Total operating revenues – tanker market		1,023,733		989,773		1,955,427
Total operating revenues – drybulk carrier market		136,912		124,983		130,228

Our vessels operate worldwide and therefore management does not evaluate performance by geographical region as this information is not meaningful.

As of December 31, 2010, the tanker fleet that we operate has a total tonnage of approximately 17.6 million dwt, including the 0.9 million dwt under commercial management, and the drybulk fleet that we operate has a total tonnage of approximately 1.4 million dwt. Our tanker vessels have an average age of approximately 11 years compared with an estimated industry average of approximately 9 years, and our OBO vessels have an average age of approximately 20 years compared with an estimated industry average of approximately 22 years. We believe that our vessels comply with the most stringent of generally applicable environmental regulations for tankers and OBO vessels.

24

We own various vessel owning and operating subsidiaries. Our operations take place substantially outside of the United States. Our subsidiaries, therefore, own and operate vessels that may be affected by changes in foreign governments and other economic and political conditions. We are engaged primarily in transporting crude oil and, in addition, raw materials like coal and iron ore and our vessels operate in the spot and time charter markets. Our VLCCs are specifically designed for the transportation of crude oil and, due to their size, are primarily used to transport crude oil from the Middle East Gulf to the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port, or LOOP. Our Suezmax tankers are similarly designed for worldwide trading, but the trade for these vessels is mainly in the Atlantic Basin, Middle East and Southeast Asia.

In December 2008, Teekay Corporation, or Teekay, and the Company announced an agreement to commercially combine their Suezmax vessels within the Gemini Pool, a global Suezmax tanker pool. Effective from January 1, 2009, we placed our Suezmax vessels within the Gemini Pool, bringing the total number of vessels in the pool to 36. Gemini Tankers LLC, a wholly-owned subsidiary of Teekay, has established an office in Oslo, Norway to, among other things, manage the larger fleet and establish a chartering presence in Europe to supplement its existing operations in Stamford, Connecticut. We expect to improve the utilization on our fleet and to reduce the cost basis by entering a large pool. In addition to the Company and Teekay, NATS, König & Cie and Hyundai Merchant Marine also participate in the Gemini Pool.

Historically, the tanker industry has been highly cyclical, with attendant volatility in profitability and asset values resulting from changes in the supply of and demand for tanker capacity. Our OBO carriers are specifically designed to carry oil or dry cargo and may be used to transport either oil or dry cargo on any voyage. Currently, our eight Suezmax OBOs are configured to carry dry bulk cargo and are fixed on medium- to long-term charters.

The supply of tanker and OBO capacity is influenced by the number of new vessels built, the number of older vessels scrapped, converted, laid up and lost, the efficiency of the world tanker or OBO fleet and government and industry regulation of maritime transportation practices. The demand for tanker and OBO capacity is influenced by global and regional economic conditions, increases and decreases in industrial production and demand for crude oil and petroleum products, the proportion of world oil output supplied by Middle Eastern and other producers, political changes and armed conflicts (including wars in the Middle East) and changes in seaborne and other transportation patterns. The demand for OBO capacity is, in addition, influenced by increases and decreases in the production and demand for raw materials such as iron ore and coal. In particular, demand for our tankers and our services in transporting crude oil and petroleum productsand dry cargoes has been dependent upon world and regional markets. Any decrease in shipments of crude oil or raw materials in world markets could have a material adverse effect on our earnings. Historically, these markets have been volatile as a result of, among other things, general economic conditions, prices, environmental concerns, weather and competition from alternative energy sources. Because many factors influencing the supply of and demand for tankers and OBO carriers are unpredictable, the nature, timing and degree of changes in industry conditions are also unpredictable.

We are committed to providing quality transportation services to all of our customers and to developing and maintaining long-term relationships with the major charterers of tankers. Increasing global environmental concerns have created a demand in the petroleum products/crude oil seaborne transportation industry for vessels that are able to conform to the stringent environmental standards currently being imposed throughout the world.

The tanker industry is highly cyclical, experiencing volatility in profitability, vessel values and freight rates. Freight rates are strongly influenced by the supply of tanker vessels and the demand for oil transportation. Refer to Item 5 "Operating and Financial Review and Prospects" for a discussion of the tanker market in 2010 and 2011.

Similar to structures commonly used by other shipping companies, our vessels are all owned by, or chartered to, separate subsidiaries or associated companies. Frontline Management AS, and Frontline Management (Bermuda) Limited which we refer to as Frontline Management, both wholly-owned subsidiaries, support us in the implementation of our decisions. Frontline Management is responsible for the commercial management of our shipowning subsidiaries, including chartering and insurance. Each of our vessels is registered under the Bahamas, French, Liberian, Panamanian, Cypriot, Singaporean, Norwegian, Isle of Man, Marshall Islands, Hong Kong or Maltese flag.

25

Frontline has a strategy of extensive outsourcing. Ship management, crewing and accounting services are provided by a number of independent and competing suppliers. Our vessels are managed by independent ship management companies. Pursuant to management agreements, each of the independent ship management companies provides operations, ship maintenance, crewing, technical support, shipyard supervision and related services to Frontline. A central part of our strategy is to benchmark operational performance and cost level amongst our ship managers. Independent ship managers provide crewing for our vessels. Currently, our vessels are crewed with Russian, Ukrainian, Croatian, Romanian, Indian and Filipino officers and crews, or combinations of these nationalities. Accounting services for each of our ship-owning subsidiaries are also provided by the ship managers.

Frontline decided in August 2009 to establish a ship management company in Singapore. The new company, Sea Team Management Pte. Ltd., is a complement to the external ship management companies currently offering services to Frontline and is not a change in the Company's outsourcing strategy. However, we would like to strengthen our position towards our service providers to enhance and secure delivery of high quality service at low cost in the future. Sea Team Management Pte Ltd. was certified and received its ISM Document of Compliance by Det Norske Veritas on February 3, 2010 and is as such an approved ship management company. In addition a crewing company was formally opened in Chennai, India, on January 17, 2010.

Our principal executive offices are located at Par-la-Ville Place, 14 Par-la-Ville Road in Hamilton, Bermuda.

Strategy

Our strategy is to maintain and expand our position as a world-leading operator and charterer of modern, high quality oil tankers. Our principal focus is the transportation of crude oil and its related refined dirty petroleum cargoes for major oil companies and major oil trading companies. We seek to optimize our income and adjust our exposure through actively pursuing charter opportunities whether through time charters, bareboat charters, sale and leasebacks, straight sales and purchases of vessels, newbuilding contracts and acquisitions.

We presently operate VLCC and Suezmax vessels in the tanker market and OBO vessels in the dry cargo market. Our strategy is to have at least 30% fixed charter income coverage for our fleet, predominantly through time charters, and trade the balance of the fleet on the spot market. We focus on minimizing time spent on ballast by "cross trading" our vessels, typically with voyages loading in the Persian Gulf discharging in Northern Europe, followed by a trans-Atlantic voyage to the U.S. Gulf of Mexico and, finally, a voyage from either the Caribbean or West Africa to the Far East/Indian Ocean. We believe that operating a certain number of vessels in the spot market, enables us to capitalize on a potential stronger spot market as well as to serve our main customers on a regular non term basis. We believe that the size of our fleet is important in negotiating terms with our major clients and charterers. We also believe that our large, high-quality VLCC and Suezmax fleet enhances our ability to obtain competitive terms from suppliers and ship repairers and builders and to produce cost savings in chartering and operations.

Our business strategy is primarily based upon the following principles:

· emphasizing operational safety and quality maintenance for all of our vessels;

· complying with all current and proposed environmental regulations;

· outsourcing technical operations and crewing;

· continuing to achieve competitive operational costs;

· operating a modern and homogeneous fleet of tankers;

· achieving high utilization of our vessels;

· achieving competitive financing arrangements;

· achieving a satisfactory mix of term charters, contracts of affreightment and spot voyages; and

26

· developing and maintaining relationships with major oil companies and industrial charterers.

We have newbuilding contracts for five VLCCs and two Suezmax vessels as of April 4, 2011.

We continue to evaluate opportunities in the time charter market. On the basis of the strength of the drybulk market when the vessels became available, all of our eight OBO carriers have been fixed on medium- to long-term charters at an average daily rate of approximately $47,000 and $48,000 in 2010 and 2011, respectively. As of December 31, 2010, approximately 22% of our operating days for our total fleet for 2011 were on fixed time charter and bareboat charter, excluding the vessels in ITCL.

Although there has been a trend towards consolidation over the past 15 years, the tanker market remains highly fragmented. We estimate, based on available industry data that we currently own or operate approximately 8% of the world VLCC fleet and 5% of the world Suezmax tanker fleet.  We intend to use our operational cash flow together with our available financing to continue the consolidation of the tanker market.  We always look for attractive investments and acquisitions and will finance such investments through a combination of debt and equity. Our role in the consolidation of the tanker market may include the acquisition of new vessels and second-hand vessels and we may also engage in business acquisitions and strategic transactions such as marketing joint ventures. In the ordinary course of our business, we engage in the evaluation of potential candidates for acquisitions and strategic transactions.

Our goal is to generate competitive returns for our shareholders with quarterly dividend payments. Our dividend payments are based on present earnings, market prospects, current capital expenditure programs as well as investment opportunities.

Seasonality

Historically, oil trade and, therefore, charter rates increased in the winter months and eased in the summer months as demand for oil in the Northern Hemisphere rose in colder weather and fell in warmer weather. The tanker industry, in general, has become less dependent on the seasonal transport of heating oil than a decade ago as new uses for oil and oil products have developed, spreading consumption more evenly over the year. Most apparent is a higher seasonal demand during the summer months due to energy requirements for air conditioning and motor vehicles.

The dry bulk trade also has a history of tracking seasonal demand fluctuations, but like the oil trade, appears to have become less dependent on such fluctuations as a result of the increased transportation of certain dry bulk commodities. Grain has traditionally had the greatest impact on the dry bulk market, particularly during the peak demand seasons, which occur during the second quarter in the Southern Hemisphere and at the end of the third quarter and throughout the fourth quarter in the Northern Hemisphere. The growth of iron ore and coal transportation over the last decade, however, has diminished the relative importance of grain to the dry bulk transportation industry. With the quarterly pricing of iron ore affecting its demand and factors such as weather and port congestion impacting the dry bulk industry as a whole, the volatility of dry bulk earnings in recent years appears to be the result of factors other than seasonality.

Customers

During the year ended December 31, 2010, we reported total revenue from one customer of $244 million, which represented approximately 21% of consolidated operating revenues (2009: one customer, which represented approximately 22% and 2008: one customer, which represented approximately 20%). This was the same customer in each year. No other customers represent more than 10% of consolidated operating revenues for the periods presented.

Competition

The market for international seaborne crude oil transportation services is highly fragmented and competitive. Seaborne crude oil transportation services generally are provided by two main types of operators: major oil company captive fleets (both private and state-owned) and independent ship-owner fleets. In addition, several owners and operators pool their vessels together on an ongoing basis, and such pools are available to customers to the same extent as independently owned-and-operated fleets. Many major oil companies and other oil trading companies, the primary charterers of the vessels owned or controlled by us, also operate their own vessels and use such vessels not only to transport their own crude oil but also to transport crude oil for third-party charterers in direct competition with independent owners and operators in the tanker charter market. Competition for charters is intense and is based upon price, location, size, age, condition and acceptability of the vessel and its manager. Competition is also affected by the availability of other size vessels to compete in the trades in which the Company engages. Charters are, to a large extent, brokered through international independent brokerage houses that specialize in finding the optimal ship for any particular cargo based on the aforementioned criteria. Brokers may be appointed by the cargo shipper or the ship owner.

27

Environmental and Other Regulations

Government regulations and laws significantly affect the ownership and operation of our vessels. We are subject to international conventions, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered and compliance with such laws, regulations and other requirements may entail significant expense.

Our vessels are subject to both scheduled and unscheduled inspections by a variety of government, quasi-governmental and private organizations including local port authorities, national authorities, harbor masters or equivalent, classification societies, flag state administrations (countries of registry) and charterers. Our failure to maintain permits, licenses, certificates or other approvals required by some of these entities could require us to incur substantial costs or temporarily suspend operation of one or more of our vessels.

We believe that the heightened levels of environmental and quality concerns among insurance underwriters, regulators and charterers have led to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards.  We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations; however, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that results in significant oil pollution or otherwise causes significant adverse environmental impact, such as the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, could result in additional legislation or regulation that could negatively affect our profitability.

International Maritime Organization

The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by ships or the IMO, has adopted several international conventions that regulate the international shipping industry, including the International Convention on Civil Liability for Oil Pollution Damage, the International Convention on Civil Liability for Bunker Oil Pollution Damage, and the International Convention for the Prevention of Pollution from Ships, or the MARPOL Convention. The MARPOL Convention establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms.

The operation of our vessels is also affected by the requirements contained in the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, promulgated by the IMO under the International Convention for the Safety of Life at Sea, or SOLAS. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We intend to rely upon the safety management system that our appointed ship managers have developed.

In December 2003, the Marine Environmental Protection Committee of the IMO, or MEPC, adopted an amendment to the MARPOL Convention, which became effective in April 2005. The amendment revised an existing regulation 13G accelerating the phase-out of single hull oil tankers and adopted a new regulation 13H on the prevention of oil pollution from oil tankers when carrying heavy grade oil. Under the revised regulation, single hull oil tankers were required to be phased out no later than April 5, 2005 or the anniversary of the date of delivery of the ship on the date or in the year specified in the following table:

28

Category of Oil Tankers	Date or Year for Phase Out
Category 1 oil tankers of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above carrying other oils, which do not comply with the requirements for protectively located segregated ballast tanks	April 5, 2005 for ships delivered on April 5, 1982 or earlier; or 2005 for ships delivered after April 5, 1982
Category 2 - oil tankers of 20,000 dwt and above carrying crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and above carrying other oils, which do comply with the protectively located segregated ballast tank requirements and Category 3 - oil tankers of 5,000 dwt and above but less than the tonnage specified for Category 1 and 2 tankers.	April 5, 2005 for ships delivered on April 5, 1977 or earlier 2005 for ships delivered after April 5, 1977 but before January 1, 1978 2006 for ships delivered in 1978 and 1979 2007 for ships delivered in 1980 and 1981 2008 for ships delivered in 1982 2009 for ships delivered in 1983 2010 for ships delivered in 1984 or later

Under the revised regulations, a flag state may permit continued operation of certain Category 2 or 3 tankers beyond their phase-out date in accordance with the above schedule. Under regulation 13G, the flag state may allow for some newer single hull oil tankers registered in its country that conform to certain technical specifications to continue operating until the earlier of the anniversary of the date of delivery of the vessel in 2015 or the 25th anniversary of their delivery. Under regulations 13G and 13H, as described below, certain Category 2 and 3 tankers fitted only with double bottoms or double sides may be allowed by the flag state to continue operations until their 25th anniversary of delivery. Any port state, however, may deny entry of those single hull oil tankers that are allowed to operate under any of the flag state exemptions.

The following table summarizes the impact of such regulations on the Company's single hull (SH) and double sided (DS) tankers:

Vessel Name	Vessel type	Vessel Category	Year Built	IMO phase out	Flag state Exemption
Titan Aries (ex-Edinburgh)	VLCC	DS	1993	2018	n/a
Front Ace (1)	VLCC	SH	1993	2010	2015
Titan Orion (ex-Front Duke)	VLCC	SH	1992	2010	2015
Ticen Sun	VLCC	SH	1991	2010	2015
Ticen Ocean	VLCC	SH	1991	2010	2015

 (1) Agreement reached in February 2011 regarding termination of the lease. Termination occurred in March 2011.

In December 2003, the MEPC adopted a new regulation 13H on the prevention of oil pollution from oil tankers when carrying heavy grade oil, or HGO, which includes most of the grades of marine fuel. The new regulation bans the carriage of HGO in single hull oil tankers of 5,000 dwt and above after April 5, 2005, and in single hull oil tankers of 600 dwt and above but less than 5,000 dwt, no later than the anniversary of their delivery in 2008.

Under regulation 13H, HGO means any of the following:

· crude oils having a density at 15єC higher than 900 kg/m3;

· fuel oils having either a density at 15єC higher than 900 kg/m3 or a kinematic viscosity at 50ºC higher than 180 mm2/s; or

· bitumen, tar and their emulsions.

29

Under the regulation 13H, the flag state may allow continued operation of oil tankers of 5,000 dwt and above, carrying crude oil with a density at 15єC higher than 900 kg/m3 but lower than 945 kg/m3, that conform to certain technical specifications and, in the opinion of the such flag state, the ship is fit to continue such operation, having regard to the size, age, operational area and structural conditions of the ship and provided that the continued operation shall not go beyond the date on which the ship reaches 25 years after the date of its delivery. The flag state may also allow continued operation of a single hull oil tanker of 600 dwt and above but less than 5,000 dwt, carrying HGO as cargo, if, in the opinion of the such flag state, the ship is fit to continue such operation, having regard to the size, age, operational area and structural conditions of the ship, provided that the operation shall not go beyond the date on which the ship reaches 25 years after the date of its delivery.

The flag state may also exempt an oil tanker of 600 dwt and above carrying HGO as cargo if the ship is either engaged in voyages exclusively within an area under its jurisdiction, or is engaged in voyages exclusively within an area under the jurisdiction of another party, provided the party within whose jurisdiction the ship will be operating agrees. The same applies to vessels operating as floating storage units of HGO.

Any port state, however, can deny entry of single hull tankers carrying HGO which have been allowed to continue operation under the exemptions mentioned above, into the ports or offshore terminals under its jurisdiction, or deny ship-to-ship transfer of HGO in areas under its jurisdiction except when this is necessary for the purpose of securing the safety of a ship or saving life at sea.

Noncompliance with the ISM Code or with other IMO regulations may subject a shipowner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports including United States and European Union Ports.

United States

The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990, or OPA, is an extensive regulatory and liability regime for environmental protection and cleanup of oil spills. OPA affects all owners and operators whose vessels trade with the United States or its territories or possessions, or whose vessels operate in the waters of the United States, which include the U.S. territorial sea and the 200 nautical mile exclusive economic zone around the United States. The Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, imposes liability for cleanup and natural resource damage from the release of hazardous substances (other than oil) whether on land or at sea. Both OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat charterers are responsible parties who are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from oil spills from their vessels. OPA limits the liability of responsible parties with respect to tankers over 3,000 gross tons to the greater of $3,200 per gross tons or $23.496 million per single hull tanker, and $2,000 per gross ton or $17.088 million per double hull tanker, respectively, and permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries. Some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, however, in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining tanker owners' responsibilities under these laws. CERCLA, which applies to owners and operators of vessels, contains a similar liability regime and provides for cleanup, removal and natural resource damages. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $0.5 million for any other vessel.

These limits of liability do not apply, however, where the incident is caused by violation of applicable U.S. federal safety, construction or operating regulations, or by the responsible party's gross negligence or willful misconduct. These limits also do not apply if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the substance removal activities. OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. We believe that we are in substantial compliance with OPA, CERCLA and all applicable state regulations in the ports where our vessels call.

30

OPA also requires owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the limit of their potential strict liability under the act. Under the regulations, evidence of financial responsibility may be demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA regulations, an owner or operator of more than one tanker is required to demonstrate evidence of financial responsibility for the entire fleet in an amount equal only to the financial responsibility requirement of the tanker having the greatest maximum strict liability under OPA and CERCLA. We have provided such evidence and received certificates of financial responsibility from the U.S. Coast Guard for each of our vessels required to have one.

Other U.S. Environmental Initiatives

The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. Furthermore, most U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.

At the international level, the IMO adopted an International Convention for the Control and Management of Ships' Ballast Water and Sediments in February 2004, or the BWM Convention. The Convention's implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not enter into force until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchant shipping. The Convention has not yet entered into force because a sufficient number of states have failed to adopt it.  However, the IMO's Marine Environment Protection Committee passed a resolution in March 2010 encouraging the ratification of the Convention and calling upon those countries that have already ratified to encourage the installation of ballast water management systems. If mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers. Although we do not believe that the costs of compliance with a mandatory mid-ocean ballast exchange would be material, it is difficult to predict the overall impact of such a requirement on our operations.

The U.S. Clean Air Act of 1970, as amended by the Clean Air Act Amendments of 1977 and 1990, or the CAA, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Our vessels that operate in such port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to draft State Implementation Plans, or SIPs, designed to attain national health-based air quality standards in primarily major metropolitan and/or industrial areas. Several SIPs regulate emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. As indicated above, our vessels operating in covered port areas are already equipped with vapor recovery systems that satisfy these existing requirements.

European Union

The European Union has adopted legislation that would: (1) ban manifestly sub-standard vessels (defined as those over 15 years old that have been detained by port authorities at least twice in a six month period) from European waters and create an obligation of port states to inspect vessels posing a high risk to maritime safety or the marine environment; and (2) provide the European Union with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies. In addition, European Union regulations enacted in 2003 now prohibit all single hull tankers from entering into its ports or offshore terminals

Greenhouse Gas Regulation

The IMO is evaluating various mandatory measures to reduce greenhouse gas emissions from international shipping, which may include market-based instruments or a carbon tax. Any passage of climate control legislation or other regulatory initiatives by the IMO, EU, the U.S. or other countries where we operate that restrict emissions of greenhouse gases could require us to make significant financial expenditures that we cannot predict with certainty at this time.

31

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security including the U.S. Maritime Transportation Security Act of 2002, or MTSA, amendments to SOLAS and a requirement that any vessel trading internationally obtain an International Ship Security Certificate from a recognized security organization approved by the vessel's flag state. We believe that our fleet is currently in compliance with applicable security requirements.

Inspection by Classification Societies

Every oceangoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in-class," signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in-class" by a classification society which is a member of the International Association of Classification Societies. All our vessels are certified as being "in-class" by a recognized classification society.

Risk of Loss and Insurance

The operation of any ocean-going vessel carries an inherent risk of catastrophic marine disasters and property losses caused by adverse weather conditions, mechanical failures, human error, war, terrorism and other circumstances or events. In addition, the transportation of crude oil is subject to the risk of spills, and business interruptions due to political circumstances in foreign countries, hostilities, labor strikes and boycotts. OPA has made liability insurance more expensive for ship owners and operators imposing potentially unlimited liability upon owners, operators and bareboat charterers for oil pollution incidents in the territorial waters of the United States. We believe that our current insurance coverage is adequate to protect us against the principal accident-related risks that we face in the conduct of our business.

Our protection and indemnity insurance, or P&I insurance, covers third-party liabilities and other related expenses from, among other things, injury or death of crew, passengers and other third parties, claims arising from collisions, damage to cargo and other third-party property and pollution arising from oil or other substances. Our current P&I insurance coverage for pollution is the maximum commercially available amount of $1.0 billion per tanker per incident and is provided by mutual protection and indemnity associations. Each of the vessels currently in our fleet is entered in a protection and indemnity association which is a member of the International Group of Protection and Indemnity Mutual Assurance Associations. The 13 protection and indemnity associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. Each protection and indemnity association has capped its exposure to this pooling agreement at approximately $7.0 billion currently. As a member of protection and indemnity associations, which are, in turn, members of the International Group, we are subject to calls payable to the associations based on its claim records as well as the claim records of all other members of the individual associations and members of the pool of protection and indemnity associations comprising the International Group.

Our hull and machinery insurance covers actual or constructive total loss from covered risks of collision, fire, heavy weather, grounding and engine failure or damages from same. Our war risks insurance covers risks of confiscation, seizure, capture, vandalism, sabotage and other war-related risks. Our loss-of-hire insurance covers loss of revenue at $23,000 per day for Suezmaxes and $30,000 per day for VLCCs for not less than 90 days resulting from an accident covered by the terms of our hull and machinery insurance for each of our vessels, with a fourteen day deductible for OBO vessels and a 60 day deductible for all other Suezmaxes and VLCCs.

32

C.  ORGANIZATIONAL STRUCTURE

See Exhibit 8.1 for a list of our significant subsidiaries.

D.  PROPERTY, PLANTS AND EQUIPMENT

The Company's Vessels

The following table sets forth the fleet that we operated as of December 31, 2010 (including contracted newbuildings not yet delivered):

Vessel	Built	Approximate Dwt.	Construction	Flag	Type of Employment
Tonnage Owned Directly
VLCCs
Antares Voyager	1998	310,000	Double-hull	BA	Spot market
Phoenix Voyager	1999	308,500	Double-hull	BA	Bareboat charter
British Pioneer	1999	307,000	Double-hull	IoM	Bareboat charter
British Progress	2000	307,000	Double-hull	IoM	Bareboat charter
British Purpose	2000	307,000	Double-hull	IoM	Bareboat charter
Front Shanghai (1)	2006	298,500	Double-hull	HK	Spot market
Front Kathrine	2009	297,974	Double-hull	MI	Spot market
Front Queen	2009	297,000	Double-hull	MI	Time charter
Front Eminence	2009	321,300	Double-hull	MI	Time charter
Front Endurance	2009	321,300	Double-hull	MI	Spot market
Front Cecilie	2010	297,000	Double-hull	HK	Spot market
Front Signe	2010	297,000	Double-hull	HK	Spot market
Hull J0025 (Newbuilding)	2011	320,000	Double-hull	n/a	n/a
Hull J0026 (Newbuilding)	2011	320,000	Double-hull	n/a	n/a
Hull J0027 (Newbuilding)	2012	320,000	Double-hull	n/a	n/a
Hull J0028 (Newbuilding)	2012	320,000	Double-hull	n/a	n/a

Hull J0106 (Newbuilding)	2013	320,000	Double-hull	n/a	n/a
Suezmax Tankers
Front Fighter	1994	147,048	Double-hull	MI	Spot market
Front Hunter	1996	146,286	Double-hull	MI	Spot market
Front Alfa	1993	150,038	Double-hull	MI	Spot market
Front Beta	1992	135,915	Double-hull	MI	Spot market
Front Delta	1993	136,055	Double-hull	MI	Spot market
Northia	2010	156,000	Double-hull	MI	Time charter
Naticina	2010	156,000	Double-hull	MI	Time charter
Front Odin	2010	156,000	Double-hull	MI	Spot market
Front Njord	2010	156,000	Double-hull	HK	Spot market
Cygnus Voyager	1993	157,000	Double-hull	BA	Bareboat charter
Altair Voyager	1993	136,000	Double-hull	BA	Bareboat charter
Sirius Voyager	1994	156,000	Double-hull	BA	Bareboat charter
Hull 1161 (Newbuilding)	2013	157,000	Double-hull	n/a	n/a
Hull 1162 (Newbuilding)	2013	157,000	Double-hull	n/a	n/a

Tonnage Chartered in from Ship Finance
VLCCs
Ticen Sun (2)	1991	284,000	Single-hull	SG	Bareboat charter
Ticen Ocean	1991	284,000	Single-hull	PAN	Bareboat charter
Titan Orion (ex-Front Duke)	1992	284,000	Single-hull	SG	Bareboat charter
Titan Aries (ex-Edinburgh)	1993	302,000	Double-side	LIB	Bareboat charter
Front Ace (2)	1993	276,000	Single-hull	LIB	Time charter

33

Front Vanguard	1998	300,000	Double-hull	MI	Spot market
Front Century	1998	311,000	Double-hull	MI	Spot market
Front Champion	1998	311,000	Double-hull	BA	Spot market
Ovatella (ex-Front Comanche)	1999	300,000	Double-hull	FRA	Time charter
Golden Victory	1999	300,000	Double-hull	MI	Time charter
Front Circassia	1999	306,000	Double-hull	MI	Spot market
Front Opalia	1999	302,000	Double-hull	MI	Spot market
Ocana	1999	300,000	Double-hull	IoM	Time charter
Front Scilla	2000	303,000	Double-hull	MI	Spot market
Oliva	2001	299,000	Double-hull	IoM	Time charter
Front Serenade	2002	299,000	Double-hull	LIB	Time charter
Otina	2002	298,000	Double-hull	IoM	Time charter
Ondina	2002	299,000	Double-hull	IoM	Time charter
Front Falcon	2002	309,000	Double-hull	BA	Spot market
Front Page	2002	299,000	Double-hull	LIB	Time charter
Front Energy	2004	305,000	Double-hull	CYP	Time charter
Onoba (ex-Front Force)	2004	305,000	Double-hull	CYP	Time charter
Suezmax OBO Carriers
Front Breaker	1991	169,000	Double-hull	MI	Time charter
Front Climber	1991	169,000	Double-hull	SG	Time charter
Front Driver	1991	169,000	Double-hull	MI	Time charter
Front Guider	1991	169,000	Double-hull	SG	Time charter
Front Leader (3)	1991	169,000	Double-hull	SG	Time charter
Front Rider	1992	169,000	Double-hull	SG	Time charter
Front Striver	1992	169,000	Double-hull	SG	Time charter
Front Viewer	1992	169,000	Double-hull	SG	Time charter
Suezmax Tankers
Front Pride	1993	150,000	Double-hull	MI	Spot market

Front Glory	1995	150,000	Double-hull	MI	Spot market
Front Splendour	1995	150,000	Double-hull	MI	Spot market
Front Ardenne	1997	150,000	Double-hull	MI	Spot market
Front Brabant	1998	150,000	Double-hull	MI	Time charter
Mindanao	1998	150,000	Double-hull	SG	Time charter

Tonnage Chartered in from Third Parties
VLCCs
Front Chief	1999	311,000	Double-hull	BA	Spot market
Front Commander	1999	311,000	Double-hull	BA	Spot market
Front Crown	1999	311,000	Double-hull	BA	Spot market
British Pride	2000	307,000	Double-hull	IoM	Bareboat charter
Front Tina	2000	299,000	Double-hull	LIB	Spot market
Front Commodore	2000	299,000	Double-hull	LIB	Spot charter
Front Eagle (4)	2002	309,000	Double-hull	BA	Spot market
Hampstead	1996	298,000	Double-hull	IoM	Spot market
Kensington	1995	298,000	Double-hull	IoM	Spot market
Desh Ujaala (5)	2005	316,217	Double-hull	India	Spot market

Suezmax Tankers
Front Warrior	1998	153,000	Double-hull	BA	Spot market
Front Melody	2001	150,000	Double-hull	LIB	Spot market
Front Symphony	2001	150,000	Double-hull	LIB	Spot charter

34

Tonnage under Commercial Management VLCCs
Saga Chelsea	1995	298,432	Double-hull	MI	Spot market
Saga Julie	2000	299,089	Double-hull	MI	Spot market
Saga Unity	2000	300,000	Double-hull	MI	Spot market

(1) Vessel was sold in January 2011 and chartered back in for approximately two years. The vessel was renamed Gulf Eyadah and changed to the Panama flag.

(2) Agreement reached in February 2011 regarding termination of the lease. Termination occurred in March 2011.

(3) Agreement reached in April 2011 regarding termination of the lease. Termination is expected to occur in the second quarter of 2011.

(4) Vessel was acquired in March 2011 when our purchase option was exercised and simultaneously sold. Delivery to the new buyer is expected to take place in the second quarter of 2011.

(5) Vessel was redelivered in January 2011.

Our chartered in fleet is contracted to us under leasing arrangements with fixed terms of between seven and twenty-three years. Lessors have options to extend six of these leases by up to an additional five years from expiry of the initial fixed term. We have fixed purchase price options to buy six of these vessels at certain future dates and the lessors have fixed options to sell six of these vessels to us at the end of the lease period. Four of the lease agreements may not be terminated by us without the agreement of the end-user of the vessel.

Key to Flags:

BA – Bahamas, IoM – Isle of Man, LIB - Liberia, MAL – Malta, NIS - Norwegian International Ship Register, PAN – Panama,  SG - Singapore, FRA – France, MI – Marshall Islands, CYP – Cyprus, HK – Hong Kong.

Other than our interests in the vessels described above, we do not own any material physical properties. We lease office space in Hamilton, Bermuda from an unaffiliated third party. Frontline Management AS leases office space, at market rates, in Oslo, Norway from Bryggegata AS, a company indirectly affiliated with Hemen, our principal shareholder.

ITEM 4A.  UNRESOLVED STAFF COMMENTS

None.

ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

The following discussion should be read in conjunction with Item 3 "Selected Financial Data", Item 4 "Information on the Company" and our audited Consolidated Financial Statements and Notes thereto included herein.

As of December 31, 2010, our tanker and OBO fleet consisted of 73 vessels.  The fleet consists of 44 VLCCs which are either owned or chartered in, 21 Suezmax tankers which are either owned or chartered in and eight Suezmax OBOs which are chartered in. We also had five VLCC newbuildings and two Suezmax newbuildings on order and three VLCCs under our commercial management.

A full fleet list is provided in Item 4.D. "Information on the Company" showing the vessels that we currently own and charter in.

Fleet Changes

Refer to Item 4 for discussion on acquisitions and disposals of vessels. A summary of our fleet changes for the years ended December 31, 2010, 2009 and 2008 is as follows:

35

	2010			2009			2008
VLCCs
At start of period		41			40			42
Acquisitions		4			2			—
Dispositions		(2	)		(1	)		(2	)
Chartered In		1			—			—
At end of period		44			41			40

Suezmax
At start of period	27		29		16
Acquisitions	4		—		5
Dispositions	(1	)	—		(3	)
Chartered In	(9	)	(2	)	11
At end of period	21		27		29
Suezmax OBOs
At start and end of period	8		8		8
Total fleet
At start of period	76		77		66
Acquisitions	8		2		5
Dispositions	(3	)	(1	)	(5	)
Chartered In	(8	)	(2	)	11
At end of period	73		76		77

Summary of Fleet Employment

As discussed below, our vessels are operated under time charters, bareboat charters, voyage charters, pool arrangements and COAs.

	As of December 31,
	2010			2009			2008
	Number of vessels	Percentage of fleet		Number of vessels	Percentage of fleet		Number of vessels	Percentage of fleet
VLCCs
Spot or pool	22	50	%	15	37	%	15	38	%
Time charter	13	30	%	14	34	%	15	38	%
Bareboat charter	9	20	%	12	29	%	10	25	%
Total	44	100	%	41	100	%	40	100	%
Suezmax
Spot or pool	15	72	%	19	70	%	21	73	%
Time charter	3	14	%	5	19	%	5	17	%
Bareboat charter	3	14	%	3	11	%	3	10	%
Total	21	100	%	27	100	%	29	100	%

Suezmax OBOs
Time charter	8	100	%	8	100	%	8	100	%
Total	8	100	%	8	100	%	8	100	%
Total fleet
Spot or pool	37	51	%	34	45	%	36	47	%
Time charter	24	33	%	27	35	%	28	36	%
Bareboat charter	12	16	%	15	20	%	13	17	%
Total	73	100	%	76	100	%	77	100	%

36

Market Overview and Trend Information

Tanker Market

According to industry sources, the average TCE rate for a modern VLCC was $42,500 per day in 2010. The tanker market in 2010 was characterized by a strong first half and a weak second half. Storage activities and delays in the newbuilding delivery schedule contributed positively to the first half of the year and the year started rather strongly with average earnings of $60,000 per day in the first quarter and $58,000 per day in the second quarter. The second half of the year returned lower earnings per day mostly due to the lack of vessels being used as floating storage and the high availability of tonnage. Consequently the average TCE for the third and the fourth quarter was $26,000 and $27,500 per day respectively.

The removal of single hulled vessels throughout the year was modest and below most expectations. However, due to their trading restrictions interference with the more modern tonnage was rather limited. Furthermore, a large increase in world oil demand helped the continued growth throughout the year of the seaborne oil trade. Industry sources indicate a 4% growth in the volume of seaborne oil trade and a 3% increase in transport distances. China maintained its imports from West Africa, and thus continues to be one of the most important participants to the large tanker market and a main contributor to what industry sources estimate was a 7% ton-mile increase in 2010.

The VLCC fleet increased by approximately 7.5% in 2010 to 548 vessels. Throughout the year, a total of 55 new vessels were delivered to owners and 51 new orders were placed. The total order book consisted of 185 vessels at the end of the year, representing 34% of the existing fleet.

Throughout 2011, it is estimated that 79 new VLCCs will enter the market, including 25 in the first quarter. In 2010 industry sources expected that 67 VLCCs would be delivered, however only 55 were actually delivered. This resulted in 19% slippage for the year and the trend is expected to continue throughout 2011. Furthermore, there are still single hull vessels trading actively. The phase out program has not yet been completed and the fleet counted 43

non-double hull VLCCs at the end of 2010. Not all of these vessels are trading actively and it is likely that the majority will be either sold for scrap, demolished or converted by the end of 2011.

The Suezmax fleet increased by approximately 6.5% in 2010 to 409 vessels. Throughout 2010, a total of 37 new vessels were delivered to owners and 59 new orders were placed. The total order book consisted of 147 vessels at the end of 2010, representing 36% of the existing fleet.

Throughout 2011, it is estimated that 62 new Suezmaxes will enter the market, including 24 in the first quarter. In 2010, industry sources expected that 61 Suezmaxes would be delivered, while only 37 were delivered. This resulted in 39% slippage for the year and the trend is expected to continue throughout 2011. Furthermore, there are still single hull vessels trading actively. The phase out program has not yet been completed and the fleet counted 14 non-double hull Suezmaxes at the end of 2010. Not all of them are trading actively and it is likely that the majority will be either sold for scrap, demolished or converted by the end of 2011.

According to the February 2011 report from the International Energy Agency, or "IEA", average OPEC production is estimated at 29.2 million barrels per day in 2010. The expected 2011 OPEC production output figure has not yet been published by the IEA.  However, the IEA estimates a production figure of about 29.9 million barrels per day for January 2011, which is approximately 800.000 barrels per day more compared to the production output in January 2010.

The IEA further estimates that the average world oil demand was 87.8 million barrels per day in 2010, which represents an increase of 3.3% or 2.85 million barrels per day from 2009. For 2011, the world oil demand is estimated at 89.3 million barrels per day, representing an increase of 1.7% or 1.46 million barrels per day from 2010.

The bunker (vessel fuel oil) market followed movements in the oil market closely in 2010. The average bunker price in Fujairah was approximately $465/mt in 2010, which represents an increase of $95/mt from 2009. The prices ranged from a low of $422/mt at the beginning of July to a high of $512/mt at the end of December.

37

According to the 'World Economic Outlook - Update' published by The International Monetary Fund, or "IMF", in January 2011, World Output, or GDP, increased 5 % in 2010, which was a substantial upward shift compared to the 2009 -0.6% growth. For 2011 and 2012 the IMF forecasts World GDP growth of 4.4% and 4.5%, respectively.

Drybulk Market

In spite of a net fleet growth of 76 million dwt or 14% of the existing fleet and slightly lower iron ore imports to China, average earnings for the entire fleet were generally at the same level as for 2009. But there were big differences in earnings between the sizes which reflect the influx of newbuildings. As many as 205 Capesize vessels were delivered in 2010 or a net fleet growth of 23%, while the Handysize segment in comparison had a net fleet growth of 8%. In combination with lower volumes of long haul shipments of iron ore from Brazil to Asia, the charter rates for Capesize vessels declined and from time to time they earned less than the smaller sizes.

Outside the normal supply and demand balance there are a few reasons why the utilization of the dry bulk fleet was well supported.

· Chinese coastal trade is growing fast and may account for as much as 6% of total dry bulk trade

· Waiting time at load and discharge ports was tying up between 5 and 9% of the total fleet during 2010.

· There was inefficient utilization of the fleet due to the fact that a continuously larger portion of the dry bulk fleet discharges in Asia and must sail without cargo back to loading areas in the Western hemisphere. In addition piracy in Gulf of Aden and Indian Ocean is adding waiting time for military convoys, slower steaming during convoy passages and deviations in general.

As reported by the Baltic Exchange, the average time charter earnings for a Panamax vessel was $18,203 per day during the fourth quarter of 2010 and average time charter earnings for a Capesize vessel was $34,424 per day for the same period.

The total dry bulk fleet grew by 15.7% year on year during fourth quarter 2010 and 3.8% compared to the previous quarter. There is a substantial gap between the official order book and what is actually being delivered. About 67% of the official order book was delivered during 2010.

Furthermore, the IMF reported a U.S. GDP increase of 2.8% for 2010, which was an upward shift from the 2009 decrease of 2.6%. For 2011 and 2012 the IMF forecasts a U.S. GDP increase of 3% and 2.7% respectively.

Germany, France, Italy and Spain in Europe and Japan experienced an increase in GDP for 2010 of 1.8% and 4.3%, respectively, and these countries are also forecast to report GDP growth for both 2011 and 2012.

The emerging and developing economies increased their GDP by 7.1% for 2010, compared with a growth of 2.6% for 2009. For 2011 and 2012 the IMF forecasts a continued increase in GDP of 6.5% for both years.

China yet again surpassed massive growth in GDP experienced in past years and according to the IMF, GDP increased by 10.3% in 2010, which was 1.1% higher as compared with 2009. For 2011 and 2012, the forecast is slightly lower with expected growth of 9.6% and 9.5%, respectively.

Critical Accounting Policies and Estimates

The preparation of our financial statements in accordance with accounting principles generally accepted in the United States requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Management believes that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results as they require a higher degree of judgment in their application resulting from the need to make estimates about the effect of matters that are inherently uncertain. See Note 2 to our audited Consolidated Financial Statements included herein for details of all of our material accounting policies.

38

Revenue and expense recognition

Revenues and expenses are recognized on the accruals basis. Revenues are generated from freight billings, time charter and bareboat charter hires. Voyage revenues and expenses are recognized ratably over the estimated length of each voyage and, therefore, are allocated between reporting periods based on the relative transit time in each period. The impact of recognizing voyage expenses ratably over the length of each voyage is not materially different on a quarterly and annual basis from a method of recognizing such costs as incurred. Probable losses on voyages are provided for in full at the time such losses can be estimated. Time charter and bareboat charter revenues are recorded over the term of the charter as service is provided. The Company uses a discharge-to-discharge basis in determining percentage of completion for all spot voyages and voyages servicing contracts of affreightment whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. However, the Company does not recognize revenue if a charter has not been contractually committed to by a customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage.

Amounts receivable or payable arising from profit sharing arrangements are accrued based on amounts earned as of the reporting date. Profit share income represents vessel earnings earned by the Company's customers in excess of market rates. Profit share expense represents amounts due to Ship Finance based on 20% of the excess of vessel revenues earned by the Company over the base hire paid to Ship Finance for chartering in the vessels.

Revenues and voyage expenses of the vessels operating in pool arrangements are pooled and the resulting net pool revenues, calculated on a time charter equivalent basis, are allocated to the pool participants according to an agreed formula. Formulae used to allocate net pool revenues vary among different pools but generally allocate revenues to pool participants on the basis of the number of days a vessel operates in the pool with weighting adjustments made to reflect vessels' differing capacities and performance capabilities. The same revenue and expense principles stated above are applied in determining the pool's net pool revenues. Certain pools are responsible for paying voyage expenses and distribute net pool revenues to the participants. Certain pools require the participants to pay and account for voyage expenses, and distribute gross pool revenues to the participants such that the participants' resulting net pool revenues are equal to net pool revenues calculated according to the agreed formula. Revenues allocated by these pools are included in voyage revenues in the consolidated statements of operations.

Vessels and equipment

The cost of the vessels less estimated residual value is depreciated on a straight-line basis over the vessels' estimated remaining economic useful lives. The estimated economic useful life of the Company's double hull vessels is 25 years and for single hull vessels is either 25 years or the vessel's anniversary date in 2015, whichever comes first. Other equipment is depreciated over its estimated remaining useful life, which approximates five years.

On July 1, 2009, the Company effected a change in estimate related to the estimated scrap rate for all of its owned vessels and for leased vessels where the Company has an interest in the residual value. The scrap rate was amended from an average of $222 per lightweight ton to $281 per lightweight ton for VLCCs and from an average of $378 per lightweight ton to $281 per lightweight ton for Suezmaxes. The resulting change in salvage values has been applied prospectively and reduced depreciation by approximately $0.1 million for the six months ended December 31, 2009. This change also resulted in an increase in net income of approximately $0.1 million with no impact in earnings per share for the year ended December 31, 2009. The Company's assumptions used in the determination of estimated salvage value took into account then current scrap prices, the historic pattern of scrap rates over the ten years ended December 31, 2008, estimated changes in future market demand for scrap steel and estimated future demand for vessels. Management believes that $281 per lightweight ton is a reasonable estimate of future scrap prices, taking into consideration the cyclicality of the nature of future demand for scrap steel. Although management believes that the assumptions used to determine the scrap rate are reasonable and appropriate, such assumptions are highly subjective, in part, because of the cyclicality of the nature of future demand for scrap steel.

Vessel Impairment

The carrying values of the Company's vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical. The carrying amounts of vessels held and used by the Company are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a particular vessel may not be fully recoverable. In such instances, an impairment charge would be recognized if the estimate of the undiscounted future cash flows expected to result from the use of the vessel and its eventual disposition is less than the vessel's carrying amount. This assessment is made at the individual vessel level as separately identifiable cash flow information for each vessel is available.

39

In developing estimates of future cash flows, the Company must make assumptions about future charter rates, ship operating expenses, and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.

Our Fleet – Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of Certain Vessels

In "Critical Accounting Policies – Vessel Impairment" we discuss our policy for impairing the carrying values of our vessels. During the past few years, the market values of vessels have experienced particular volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of our vessels may have declined below those vessels' carrying value, even though we did not impair those vessels' carrying value under our accounting impairment policy, due to our belief that future undiscounted cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts.

Our estimates of basic market value assume that our vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified in class without notations of any kind. Our estimates are based on the estimated market values for our vessels that we have received from shipbrokers and are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future basic market value of our vessels or prices that we could achieve if we were to sell them.

The table set forth below indicates (i) the carrying value of each of our owned vessels as of December 31, 2010, (ii) which of those vessels we believe has a basic market value, based on shipbroker reports, below its carrying value, and (iii) the aggregate difference between carrying value and market value represented by such vessels. We believe that the future undiscounted cash flows expected to be earned by those vessels, which have experienced a decline in charter-free market value below such vessels' carrying value, over their operating lives would exceed such vessels' carrying values as of December 31, 2010, and accordingly, have not recorded an impairment charge. As of December 31, 2010, and the date of this annual report, we are not holding any of the vessels listed in the table below as held for sale.

Vessel	Built	Approximate Dwt.	Carrying Value ($ millions)
VLCCs
Antares Voyager	1998	310,000	49.4
Phoenix Voyager	1999	308,500	50.6
British Pioneer	1999	307,000	52.3
British Progress	2000	307,000	53.9
British Purpose	2000	307,000	54.5
Front Shanghai (1)	2006	298,500	69.7
Front Kathrine	2009	297,974	102.5
Front Queen (2)	2009	297,000	104.0
Front Eminence	2009	321,300	101.3
Front Endurance	2009	321,300	101.7
Front Cecilie (2)	2010	297,000	111.9
Front Signe (2)	2010	297,000	113.0
Suezmax Tankers
Front Fighter (2)	1994	147,048	42.4
Front Hunter (2)	1996	146,286	50.3
Front Alfa (2)	1993	150,038	40.4
Front Beta (2)	1992	135,915	34.5
Front Delta (2)	1993	136,055	31.9
Northia	2010	156,000	65.4
Naticina	2010	156,000	65.3
Front Odin	2010	156,000	66.4
Front Njord	2010	156,000	66.4

(1) Vessel was sold in January 2011 for net sale proceeds of $91.2 million. In connection with the sale, we agreed to charter back the vessel from the new owner for approximately two years at a rate of $35,000 per day.

(2) Indicates tanker vessels for which we believe, as of December 31, 2010, the basic charter-free market value is lower than the vessel's carrying value. We believe that the aggregate carrying value of these vessels exceeds their aggregate basic charter-free market value by approximately $97.9 million.

(3) The Cygnus Voyager, Altair Voyager and Sirius Voyager have not been included in the table as we have determined that we are not the primary beneficiary of the subsidiaries, which own these vessels and these subsidiaries are accounted for under the equity method.

We refer you to the risk factor entitled "Because the market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels which may adversely affect our earnings" and the discussion herein under the heading "Business Overview".

Vessels and equipment under capital lease

The Company charters in certain vessels and equipment under leasing agreements. Leases of vessels and equipment, where the Company has substantially all the risks and rewards of ownership, are classified as capital leases. Capital leases are capitalized at the inception of the lease at the lower of the fair value of the leased assets and the present value of the minimum lease payments.

Each lease payment is allocated between liability and finance charges to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost is charged to the income statement over the lease period.

Depreciation of vessels and equipment under capital lease is included within "depreciation and amortization expense" in the consolidated statement of operations. Vessels and equipment under capital lease are depreciated on a straight-line basis over the vessels' remaining economic useful lives or on a straight-line basis over the term of the lease. The method applied is determined by the criteria by which the lease has been assessed to be a capital lease.

40

Factors Affecting our Results

The principal factors which affect our results of operations and financial position include:

· the earnings of our vessels in the charter market;

· gains from the sale of assets;

· vessel operating expenses;

· profit share expense;

· administrative expenses;

· depreciation;

· interest expense;

· impairment of securities.

We have derived our earnings from bareboat charters, time charters, voyage charters, pool arrangements and contracts of affreightment.

As of December 31, 2010, 2009 and 2008, 36, 34 and 36, respectively, of our vessels operated in the voyage charter market. The tanker industry has historically been highly cyclical, experiencing volatility in profitability, vessel values and freight rates. In particular, freight and charter rates are strongly influenced by the supply of tanker vessels and the demand for oil transportation services.

Gains from the sale of assets relates to gains from the sale of vessels and marketable securities and payments received on the termination of leases.

Operating costs are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and maintenance, drydockings, lubricating oils and insurance.

Profit share expense relates to the vessels amounts due to Ship Finance based on 20% of the excess of vessel revenues earned by the Company over the base hire paid to Ship Finance for chartering in the vessels.

Administrative expenses are composed of general corporate overhead expenses, including personnel costs, property costs, legal and professional fees and other general administrative expenses. Personnel costs include, among other things, salaries, pension costs, fringe benefits, travel costs and health insurance.

Depreciation, or the periodic cost charged to our income for the reduction in usefulness and long-term value of our vessels, is also related to the number of vessels we own or lease. We depreciate the cost of vessels we own, less their estimated residual value, over their estimated useful life on a straight-line basis. We depreciate the cost of vessels held under capital lease over the term of the lease. No charge is made for depreciation of vessels under construction until they are delivered.

Interest expense relates to vessel specific debt facilities, corporate debt and capital leases. Interest expense depends on our overall borrowing levels and may significantly increase when we acquire vessels or on the delivery of newbuildings. Interest incurred during the construction of a newbuilding is capitalized in the cost of the newbuilding. Interest expense may also change with prevailing interest rates, although the effect of these changes may be reduced by interest rate swaps or other derivative instruments.

An other-than-temporary impairment regarding our available-for-sale marketable securities will be recorded as an impairment of securities.

Lack of Historical Operating Data for Vessels before their Acquisition

Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, there is no historical financial due diligence process when we acquire vessels. Accordingly, we do not obtain the historical operating data for the vessels from the sellers because that information is not material to our decision to make acquisitions, nor do we believe it would be helpful to potential investors in our common shares in assessing our business or profitability. Most vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel's classification society records. The standard agreement does not give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically removes from the vessel all records, including past financial records and accounts related to the vessel. In addition, the technical management agreement between the seller's technical manager and the seller is automatically terminated and the vessel's trading certificates are revoked by its flag state following a change in ownership.

41

Consistent with shipping industry practice, we treat the acquisition of a vessel (whether acquired with or without charter) as the acquisition of an asset rather than a business. Although vessels are generally acquired free of charter, we have agreed to acquire (and may in the future acquire) some vessels with time charters. Where a vessel has been under a voyage charter, the vessel is delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first charterer of the vessel in the hands of the buyer. In most cases, when a vessel is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer's consent and the buyer's entering into a separate direct agreement with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter, because it is a separate service agreement between the vessel owner and the charterer. When we purchase a vessel and assume a related time charter, we must take the following steps before the vessel will be ready to commence operations:

· obtain the charterer's consent to us as the new owner;

· obtain the charterer's consent to a new technical manager;

· in some cases, obtain the charterer's consent to a new flag for the vessel;

· arrange for a new crew for the vessel;

· replace all hired equipment on board, such as gas cylinders and communication equipment;

· negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;

· register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;

· implement a new planned maintenance program for the vessel; and

· ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.

Inflation

Although inflation has had a moderate impact on our vessel operating expenses and corporate overheads, management does not consider inflation to be a significant risk to direct costs in the current and foreseeable economic environment. It is anticipated that insurance costs, which have risen over the last three years, may well continue to rise moderately over the next few years. Oil transportation is a specialized area and the number of vessels is increasing. There will therefore be an increased demand for qualified crew and this has and will continue to put inflationary pressure on crew costs. However, in a shipping downturn, costs subject to inflation can usually be controlled because shipping companies typically monitor costs to preserve liquidity and encourage suppliers and service providers to lower rates and prices in the event of a downturn.

Year ended December 31, 2010 compared with the year ended December 31, 2009

Total operating revenues and voyage expenses and commission

					Change
(in thousands of $)	2010		2009		$			%
Voyage charter revenues		708,008		565,331		142,677		25.2
Time charter revenues		365,159		486,361		(121,202	)	(24.9)
Bareboat charter revenues		71,370		64,526		6,844		10.6
Other income		20,678		17,068		3,610		21.2
Total operating revenues		1,165,215		1,133,286		31,929		2.8

Voyage charter revenues increased in 2010, as compared to 2009, is primarily due to the following reasons:

· In 2009, three Suezmaxes were chartered in under floating rate charters, bringing the total under such agreements to nine in 2009. Trading days increased in 2010 as a result of newly delivered vessels and the transfer of vessels from time charters to voyage charters. Two Suezmaxes and four VLCCs were delivered onto voyage charters during 2010, which increased revenues by $37.7 million.

· 14 vessels moved from time charters to voyage charters in 2010, which together with market conditions, increased voyage charter revenues by $180.1 million.

· The Desh Ujaala was chartered in during 2010, generating $25.6 million in voyage charter revenues.

42

· Demurrage income, which is classified as voyage charter income, increased by $17.1 million higher compared to 2009 primarily due to an increase in the number of vessels trading on the spot market during 2010 offset by a fall in TCE rates during 2010.

These factors were partially offset by;

· A decrease in the average TCE rates for double hull VLCCs and double hull Suezmaxes from approximately $38,000 and $23,200 in 2009, respectively, to approximately $36,800 and $24,300 in 2010, respectively.

· A decrease in the average TCE rates for single hull VLCCs and single hull Suezmaxes from approximately $23,800 and $9,100 in 2009, respectively, to approximately $22,500 and $7,300 in 2010, respectively.

· The last remaining single hull Suezmax was sold in April 2010 thereby reducing voyage charter revenues by $7.7 million compared to 2009.

· The lease for the Front Duchess was terminated in September 2009, resulting in a reduction in revenues of $7.6 million in 2010 compared to 2009.

· Revenues generated from relets were $47.4 million lower in 2010.

· In 2009, nine vessels were chartered-in on floating rate charters and traded in the Gemini pool. The number of vessels was increased to 15 in the first half of 2010, but all vessels were redelivered with effect from June 30, 2010 resulting in a net reduction in voyage charter revenues of $12.7 million in 2010 when compared to the prior year. This reduction in revenues was matched by an equal reduction in charterhire expenses.

· Eight vessels that had not traded exclusively in the Gemini pool in 2009 traded solely in the Gemini pool in 2010, resulting in a reduction in revenues of $10.8 million.

· Five vessels, which were chartered in on fixed rate charters and traded on the spot market were redelivered to their owners in late 2009 and early 2010 giving rise to a $31.6 million reduction in voyage charter revenues.

Time charter revenues decreased in 2010, as compared to 2009, primarily due to the following reasons:

· The lease on a single hull VLCC, Golden River, was terminated in March 2010 resulting in a decrease in time charter revenues of $11.2 million compared with 2009.

· Two chartered in Suezmaxes were redelivered in the final quarter of 2009, thereby resulting in a $5.6 million decrease in time charter revenues in 2010.

· Two vessels that moved from time charters to bareboat charters during 2009, resulted in a decrease in time charter revenues of $9.5 million. In 2010, movements in the market combined with 14 vessels moving from time charters to voyage charters led to a net reduction of $121.9 million in revenues.

These factors were partially offset by;

· In 2009, six OBOs were drydocked compared to two in 2010 and five vessels changed to time charters, which resulted in an $11.9 million increase in revenues.

· Two Suezmax newbuildings and one VLCC were delivered onto time charters during 2010 resulting in a $15.1 million increase in revenue.

Bareboat revenues increased in 2010, as compared to 2009, primarily due to:

43

· Two additional single hull VLCCs were traded on bareboat charters in the year resulting in a $4.9 million increase in bareboat revenues. The redelivery of the Antares Voyager together with the change in charter rates on the Windsor vessels contributed to a $2.8 million reduction in bareboat revenues in 2010.

· Two single hull VLCCs transferred onto bareboat charters in 2009 continued to trade on bareboat throughout 2010 and thus resulted in increased bareboat revenues of $4.7 million.

The increase in other income in 2010, as compared to 2009, is primarily due to an increase in income earned from the commercial management of related party and third party vessels together with an increase in administrative revenues derived from related parties and third parties.

Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenue, which represents operating revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenue, a non-GAAP measure, provides additional meaningful information in conjunction with operating revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating the Company's financial performance. A summary of average time charter equivalent earnings per day for our fleet is  as follows:

(in $ per day)	2010		2009		2008		2007		2006
VLCC		35,900		38,300		74,500		45,700		56,800
Suezmax		25,800		25,300		55,200		33,000		37,800
Suezmax OBO		47,400		43,000		43,500		39,700		31,700

Gain on sale of assets and amortization of deferred gains

					Change
(in thousands of $)	2010		2009		$		%
Gain on sale of assets and amortization of deferred gains		30,935		3,061		27,874	910.6

The gain on sale of assets and amortization of deferred gains in 2010 comprises gains of $5.9 million resulting from the termination of the long-term charter party agreements for Front Vista and Golden River, a gain of $0.1 million following the sale of the Front Voyager and $24.9 million in respect of the amortization of deferred gains following the termination of the capital leases relating to Front Crown, Front Commander and Front Chief. This represents the full amortization of the gain.

The gain on sale of assets and amortization of deferred gains in 2009 comprises a gain resulting from the termination of the long-term charterparty agreement for Front Duchess.

Ship operating expenses

					Change
(in thousands of $)	2010		2009		$			%
VLCC		100,645		124,357		(23,712	)	(19.1	)
Suezmax		63,314		49,980		13,334		26.7
Suezmax OBO		31,720		32,044		(324	)	(1.0	)
Total ship operating expenses		195,679		206,381		(10,702)		(5.2	)

Ship operating expenses are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and maintenance, drydockings, lubricating oils and insurance.

VLCC operating costs have decreased in 2010, as compared to 2009, primarily due to the following reasons:

· Three double hull vessels were drydocked in 2010 compared with eight double hull and one single hull vessels in 2009, which resulted in a decrease of $13.2 million in drydocking expenses.

· The lease for the Front Duchess and Golden River were terminated in September 2009 and April 2010, respectively. This reduced operating expenditure in 2010 by $4.6 million.

44

· Four single hull vessels have moved onto bareboat charters throughout 2009 and 2010. Operating costs incurred on these vessels has fallen by $7.0 million.

· Three double hull vessels moved from finance leases to operating leases at the end of 2009, the decrease in operating expenditure on these vessels in 2010 was $9.7 million

These reductions were partially offset by the delivery of four double hull vessels in 2010, thereby increasing operating costs by $6.6 million during 2010. Operating costs also increased due to increased luboils and services expenditures of $3.4 million and an increase in post fixture and management fee expenses of $0.8 million.

Suezmax operating costs have increased in 2010, as compared to 2009, primarily due to the following reasons:

· Five double hull Suezmaxes were drydocked in 2010 compared with one double hull Suezmax in 2009, which resulted in an increase of $6.4 million in drydocking expenses.

· The Company's final single hull Suezmax was sold in April 2010, reducing operating expenditure by $2.4 million.

· Four new Suezmaxes were delivered during 2010, increasing operating costs by $8.0 million in 2010.

· Higher insurance and services costs increased operating costs by $1.3 million.

OBO operating costs decreased in 2010, as compared to 2009, primarily due to a decrease in drydocking costs of $0.3 million. Two OBOs were drydocked in 2010, compared with six in 2009.

Profit share expense

					Change
(in thousands of $)	2010		2009		$			%
Profit share expense		30,566		33,018		(2,452	)	(7.4)

Profit share expense relates to the vessels leased from Ship Finance and is calculated as 20% of TCE in excess of daily base charter hire.

Charterhire expenses

					Change
(in thousands of $)	2010		2009		$			%
Charterhire expenses		134,551		169,503		(34,952	)	(20.6)
Number of vessels chartered in and accounted for as operating leases:		2010		2009
VLCC		12		2
Suezmax		17		15
Total		29		17

Charterhire expenses decreased in 2010, as compared to 2009, primarily as a result of the redelivery of 15 Suezmaxes that were previously chartered in on floating rate charters from NATS. Six VLCCs that had been chartered in on finance leases from Ship Finance moved to operating leases throughout the year, one of these vessels was sold in April 2010. Five Suezmaxes were chartered in on fixed rates charters and at the end of 2009 all but one had been redelivered, the final redelivery took place in April 2010. Two vessels (2009: two) are chartered in on a profit share basis.

Administrative expenses

					Change
(in thousands of $)	2010		2009		$		%
Administrative expenses		31,883		30,647		1,236	(4.0)

45

The increase in administrative expenses during 2010 was primarily due to costs of $2.0 million associated with the newly established subsidiary, SeaTeam Management Pte Ltd, a $1.6 million increase in consultancy, legal and other professional costs and an increase of $0.9 million in office and travel expenses. These costs were partially offset by a $2.6 million decrease in staff compensation in 2010 largely as a result of reduced performance related bonuses, stock compensation and pension costs and a $0.5 million decrease in audit fees.

Interest income

					Change
(in thousands of $)	2010		2009		$			%
Interest income		13,432		22,969		(9,537	)	(41.5)

Interest income decreased in 2010 primarily as a result of a reduction in average cash balances held during the year and the utilization of restricted cash balances in the ITCL group to settle two capital leases. Restricted cash balances held have been substantially reduced following amendments made to charter agreements with Ship Finance.

Interest expense

					Change
(in thousands of $)	2010		2009		$			%
Interest expense		149,918		160,988		(11,070	)	(6.9)

Interest expense decreased in 2010 primarily as a result of lower finance lease interest on the vessels leased from Ship Finance and vessels in the ITCL group. Five vessels previously chartered from Ship Finance on capital leases moved to operating leases during the year and the leases for two other vessels were terminated. The leases for two of the three vessels chartered in by ITCL under capital leases at the end of 2009, were terminated during 2010.

Equity earnings of unconsolidated subsidiaries and associated companies

					Change
(in thousands of $)	2010			2009	$	%
Share of results of associated companies		(515	)	(544)	29	5.3

As of December 31, 2010, we account for four investees, as compared to four during 2009, under the equity method.

Other

							Change
(in thousands of $)	2010			2009			$			%
Foreign currency exchange gains (losses)		622			(346	)		968		(279.8)
Mark to market of derivatives		(19	)		-			(19	)	-
Impairment of securities		(9,425	)		-			(9,425	)	-
Dividends received, net		(278	)		3,087			(3,365	)	(109.0)
Other non-operating items, net		2,411			1,545			866		(56.1)

Impairment of securities in 2010 relates to the other-than-temporary impairment recorded against securities held in OSG. The securities were written down to fair value of $49.9 million as of December 31, 2010 resulting in an impairment loss of $9.4 million.

Dividends received in 2010 includes a write-off of $2.1 million relating to dividends receivable from Navig8. The Company's investment in Navig8 was sold in 2010.

In 2010, other non-operating items, net includes a gain of $3.6 million due to the termination of a funding agreement and amortized gains on sale of $3.1 million, which have partially been offset by a termination fee of $2.7 million paid on early redemption of bond debt.

Net income attributable to noncontrolling interest

					Change
(in thousands of $)	2010		2009		$	%
Net income attributable to noncontrolling interest		2,597		2,771	(174)	(6.3)

46

In 2010, net income attributable to noncontrolling interest represents the 17.53% interest not owned by Frontline in the net income of ITCL and 25% of the net income in SeaTeam Management Pte. Limited.

In 2009, net income attributable to noncontrolling interest represents the 17.53% interest not owned by Frontline in the net income of ITCL.

Year ended December 31, 2009 compared with the year ended December 31, 2008

Total operating revenues and voyage expenses and commission

					Change
(in thousands of $)	2009		2008		$		%
Voyage charter revenues		565,331		1,425,968		(860,637)	(60.3)
Time charter revenues		486,361		602,980		(116,619)	(19.3)
Bareboat charter revenues		64,526		57,152		7,374	12.9
Other income		17,068		17,918		(850)	(4.7)
Total operating revenues		1,133,286		2,104,018		(970,732)	(46.1)

Total operating revenues decreased in 2009, as compared to 2008, primarily due to significant decreases in voyage and time charter revenues.

Voyage charter revenues decreased mainly due to the following reasons:

· The average TCE rates for double hull VLCCs and double hull Suezmaxes decreased from approximately $90,000 and $58,400, respectively, in 2008 to approximately $38,000 and $23,200, respectively, in 2009.

· The average TCE rates for single hull VLCCs and single hull Suezmaxes decreased from approximately $40,500 and $39,900, respectively, in 2008 to approximately $23,800 and $9,100, respectively, in 2009.

· The lease on a single hull VLCC, Front Duchess, was terminated in September 2009 resulting in a decrease in voyage charter revenues of $14.4 million compared with 2008.

· Demurrage income was lower in 2009 than in the prior year, resulting in a $82.2 million reduction in voyage charter revenues. These rates are determined by the market rates which were also lower in the year.

· Revenues generated from relets were $69.2 million lower in 2009. This was largely matched by a $68.9 million reduction in voyage expenses in the year.

· A decrease in trading days in 2009 due mainly to the redelivery of a vessel chartered in for 2008, which reduced income by $52.6 million, and the transfer of three double hull VLCCs and one double hull Suezmax to time charters from voyage charters for the majority of 2009. There was a reduction of $166.5 million in voyage charter revenues for these vessels.

· Eighteen double hull Suezmax vessels entered the Gemini Pool during the first quarter of the year. Earnings on the vessels traded in the pool were $277.3 million lower in 2009 than in 2008 as a result of the weaker spot market.

Time charter revenues decreased mainly due to the following reasons:

· Six OBOs were drydocked in the year compared with one in 2008. As a result these vessels incurred much larger periods of offhire, which reduced income by $7.9 million.

· Two single hull VLCCs, Front Sabang and Front Duchess, did not trade on time charter in 2009 decreasing revenue by $6.2 million. Two other vessels were transferred onto bareboat charters from time charters. The impact on revenue was a decrease of $37.5 million from the prior year. Two other vessels were chartered out at rates linked to the Baltic Exchange Index which fell in 2009 from 2008, resulting in reported revenues decreasing by $17.0 million.

· Six double hull VLCCs are chartered out under floating rate time charters. In 2009, revenues from these vessels was $121.4 million lower than  2008.

47

· Movement of double hull VLCCs between spot and time charters gave rise to a $20.7 million increase in time charter revenues in 2009 on 2008.

These items were partially offset by an increase in double hull Suezmax trading days compared to 2008. This is due to three of the Suezmax double hull vessels purchased midway through 2008 operating for the whole of 2009 resulting in increased revenues of $21.2 million. In addition, two vessels that had traded in the spot market moved to time charters, increasing income by $15.9 million.

Bareboat revenues increased during the year after two single hull VLCCs were chartered out on long term bareboat agreements during the year.

The decrease in administrative income in 2009 is mainly due to a decrease in income earned from supervising the newbuilding projects of related parties and a decrease in commercial management commissions, which were partially offset by cost recharges to various related parties.

Gain on sale of assets and amortization of deferred gains

					Change
(in thousands of $)	2009		2008		$		%
Gain on sale of assets and amortization of deferred gains		3,061		142,293		(139,232)	(97.8)

The gain on sale of assets in 2009 comprises a gain resulting from the termination of the long-term charterparty agreement for Front Duchess.

The gain on sale of assets in 2008 comprises gains of $17.1 million and $24.8 million resulting from the termination of the long-term charterparty agreements for Front Maple and Front Sabang respectively. Also included in the gain on sale of assets are gains of $26.0 million and $26.4 million relating to the delivery of two completed heavy lift conversions, the Front Comor and Front Traveller, respectively. Upon delivery of these final two vessels a further $38.6 million was recognized on the gain on the sale of the heavylift vessels. A further gain of $9.4 million was recognized on the sale of the Front Comor and Front Traveller mid-sections.

Ship operating expenses

					Change
(in thousands of $)	2009		2008		$		%
VLCC		124,357		141,565		(17,208)	(12.2)
Suezmax		49,980		45,210		4,770	10.6
Suezmax OBO		32,044		26,991		5,053	18.7
Total ship operating expenses		206,381		213,766		(7,385)	(3.5)

Ship operating expenses are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and maintenance, drydockings, lubricating oils and insurance.

VLCC operating costs have decreased mainly due to the following reasons:

· Eight double hull and one single hull vessel were drydocked in 2009 compared with six double hull and three single hull vessels in 2008. Drydocking expenditure in 2009 was $14.6 million lower than in 2008 due to fewer single hull vessels being drydocked and more vessels being drydocked in China, which proved to be cost effective.

· Two single hull vessels were delivered onto bareboat charters in April and May 2009. Operating costs incurred on these vessels was $7.0 million lower in 2009 when compared to 2008.

· The Front Sabang which had previously reported operating expenditure in 2008 but was sold in the first half of the year led to a decrease of $1.3 million in 2009. The Front Duchess was sold in 2009 and resulted in decreased operating expenditure of $1.7 million.

These items were partially offset by two newbuilding double hull VLCCs, which were completed and delivered during 2009 resulting in additional operating costs of $4.4 million compared to 2008 and an increase in crew costs on the VLCCs contributed of $3.0 million compared to 2008.

48

Suezmax operating costs have increased mainly due to the following:

· One double hull Suezmax was drydocked in 2009 compared with three double hull Suezmaxes in 2008, which resulted in a decrease of $4.6 million in drydocking expenses.

· Operating expenditure for single hull Suezmax vessels for the whole of 2009 related to one single hull Suezmax. As a result of the disposal of other single hull Suezmaxes in the prior year, operating expenditure fell by $1.7 million.

· Five double hull Suezmax vessels were acquired and delivered during the period from June to August 2008 and consequently a full year of operating expenditure was incurred in 2009 resulting in an increase of $10.0 million.

OBO operating costs have increased mainly due to drydocking costs. Six OBOs were drydocked in 2009, compared with one in 2008, resulting in increased drydocking costs of $4.2 million.

Profit share expense

					Change
(in thousands of $)	2009		2008		$		%
Profit share expense		33,018		110,962		(77,944)	(70.2)

Profit share expense relates to the vessels leased from Ship Finance and is calculated as 20% of TCE in excess of daily base charter hire.

Charterhire expenses

					Change
(in thousands of $)	2009		2008		$		%
Charterhire expenses		169,503		220,170		(50,667)	(23.0)
Number of vessels chartered in and accounted for as operating leases:		2009		2008
VLCC		2		4
Suezmax		15		14
Total		17		18

Charterhire expenses decreased in 2009 following the redelivery of two VLCCs and two Suezmaxes during 2008 and due to a fall in rates for the vessels chartered in on floating rates and profit share basis. In 2009, an additional three Suezmaxes were chartered in under floating rate charters, bringing the total under such agreements to nine during 2009. Two vessels (2008: two) are chartered in on a profit share basis.

Administrative expenses

					Change
(in thousands of $)	2009		2008		$		%
Administrative expenses		30,647		35,226		(4,579)	(13.0)

The decrease in administrative expenses during 2009 was mainly due to a $1.3 million reduction in stock compensation, a $1.0 million reduction in personnel costs due mainly to a decrease in the number of staff and a $1.8 million reduction in consultancy, audit and other professional costs, which were partially offset by a $0.7 million increase in newbuilding supervision expenses.

Interest income

					Change
(in thousands of $)	2009		2008		$		%
Interest income		22,969		41,204		(18,235)	(44.3)

Interest income has decreased primarily as a result of a decrease in average cash balances held during the year resulting from increased investments and lower cash generated from operations as a result of the weaker market.

Interest expense

					Change
(in thousands of $)	2009		2008		$		%
Interest expense		160,988		183,925		(22,937)	(12.5)

49

Interest expense has decreased in 2009 mainly as a result of lower capital lease interest on the vessels leased from Ship Finance due to the decreasing capital lease balances outstanding and one fewer vessel being leased during 2009. In addition, the capital lease interest expense on the vessels in the ITCL group decreased due to one fewer vessel being leased during 2009 and the effect of foreign exchange.

Equity earnings of unconsolidated subsidiaries and associated companies

							Change
(in thousands of $)	2009			2008			$			%
Share of results of associated companies		(544	)		(901	)		(357	)	(39.6	)

As of December 31, 2009, we account for four investees (2008: five) under the equity method.

Other

							Change
(in thousands of $)	2009			2008			$			%
Foreign currency exchange (losses) gains		(346	)		1,565			(1,911	)	(122.1	)
Mark to market of derivatives		-			(17,399	)		17,399		100.0
Impairment of securities		-			(25,134	)		25,134		100.0
Dividends received, net		3,087			1,552			1,535		98.9
Loss on sale of securities		-			(221	)		221		100.0
Other non-operating items, net		1,545			34,043			(32,498	)	(95.5	)

There were no derivative transactions during 2009. The unfavorable movement in mark to market of derivatives in 2008 relates primarily to the forward contracts and total return swap in relation to the purchase and sale of securities in Overseas Shipholding Group Inc. ("OSG") totaling $15.0 million. The remaining loss in 2008 relates to losses on forward freight contracts.

Impairment of securities in 2008 relates to the other-than-temporary impairment recorded against securities held in OSG. The securities were written down to fair value of $59.3 million as of December 31, 2008 resulting in an impairment loss of $25.1 million.

The loss on sale of securities in 2008 relates to the disposal of securities in OSG.

Other non operating items, net in 2008 is primarily due to a gain of $16.6 million following settlement by Bocimar of a legal case and a $18.0 million gain on the partial spin-off of ITCL.

Net income attributable to noncontrolling interest

					Change
(in thousands of $)	2009		2008		$		%
Net income attributable to noncontrolling interest		2,771		2,184		587	26.9

In 2009 and 2008, net income attributable to noncontrolling interest represents the 17.53% interest not owned by Frontline in the net income of ITCL from February 2008.

Recent accounting pronouncements

In January 2010, the FASB issued authoritative guidance that changes the disclosure requirements for fair value measurements. Specifically, the changes require a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. The changes also clarify existing disclosure requirements related to how assets and liabilities should be grouped by class and valuation techniques used for recurring and nonrecurring fair value measurements. We adopted the guidance in the first quarter 2010, which did not have an impact on our consolidated financial statements.

50

In January 2010 the FASB issued authoritative guidance in order to eliminate diversity in the way different companies reflect new shares issued as part of a distribution in their calculation of earnings per share. The provisions of this new guidance are effective on a retrospective basis and their adoption had no impact on the Company's reported earnings per share.

In January 2010, the FASB issued authoritative guidance to amend the accounting and reporting requirements for decreases in ownership of a subsidiary. This guidance requires that a decrease in the ownership interest of a subsidiary that does not result in a change of control be treated as an equity transaction. The guidance also expands the disclosure requirements about the deconsolidation of a subsidiary. The Company adopted this guidance in the first quarter of 2010 and it did not have a material impact on its consolidated financial statements.

In February 2010, the FASB amended guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements in the first quarter of 2010. The adoption of this guidance did not have an impact on our financial statements

In July 2010, the FASB issued authoritative guidance which requires expanded disclosures about the credit quality of an entity's financing receivables and its allowance for credit losses on a disaggregated basis. The adoption of this guidance by the Company with effect from 1 January 2010 did not have any effect on its consolidated financial statements.

Liquidity and Capital Resources

Liquidity

We operate in a capital intensive industry and have historically financed our purchase of tankers and other capital expenditures through a combination of cash generated from operations, equity capital and borrowings from commercial banks. Our ability to generate adequate cash flows on a short and medium term basis depends substantially on the trading performance of our vessels in the market.  Market rates for charters of our vessels have been volatile historically.  Periodic adjustments to the supply of and demand for oil tankers causes the industry to be cyclical in nature.  We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short and medium term liquidity.

Our funding and treasury activities are conducted within corporate policies to maximize investment returns while maintaining appropriate liquidity for our requirements. Cash and cash equivalents are held primarily in U.S. dollars with some balances held in British Pounds and Norwegian Kroner.

Our short-term liquidity requirements relate to servicing our debt, payment of operating costs (including drydocking), lease payments for our chartered in fleet, funding working capital requirements and maintaining cash reserves against fluctuations in operating cash flows. Sources of short-term liquidity include cash balances, restricted cash balances, short-term investments and receipts from our customers. Revenues from time charters and bareboat charters are generally received monthly or fortnightly in advance while revenues from voyage charters are received upon completion of the voyage.

Net cash provided by operating activities was $317.6 million in 2010 compared with $321.5 million in 2009 and $826.8 million in 2008.  The Company's reliance on the spot market contributes to fluctuations in cash flows from operating activities historically as a result of the exposure to highly cyclical tanker rates and more recently as a result of the impact of the downturn in the world economy on worldwide oil demand.  Any decrease in the average TCE rates earned by the Company's vessels in periods subsequent to December 31, 2010, compared with the actual TCE rates achieved during 2010, will have a negative comparative impact on the amount of cash provided by operating activities.  As of February 2011, we have average total cash cost breakeven rates on a TCE basis of approximately $24,500 for our Suezmax tankers and approximately $30,100 for our VLCCs. These are the daily rates our vessels must earn to cover budgeted operating costs, estimated interest expenses and scheduled loan principal repayments, bareboat hire and corporate overhead costs in 2011.  These rates do not take into account capital expenditures or loan balloon repayments at maturity, which we expect to refinance with new loans. Furthermore, vessels on short term time charter in and the vessels on bareboat charters out are not included in the breakeven rates.

51

Our medium and long-term liquidity requirements include funding the equity portion of investments in new or replacement vessels, repayment of long-term debt balances and funding any payments we may be required to make due to lessor put options on certain vessels we charter in.  Sources of funding our long-term liquidity requirements include new loans or equity issues, public and private debt offerings, vessel sales and sale and leaseback arrangements. We believe our working capital is sufficient for the Company's present requirements.

As of December 31, 2010, 2009 and 2008, we had cash and cash equivalents of $176.6 million, $82.6 million and $190.8 million, respectively. As of December 31, 2010, 2009 and 2008, we had restricted cash balances of $244.1 million, $500.0 million and $554.8 million, respectively. Our restricted cash balances contribute to our total short and medium term liquidity as they are used to fund payment of certain loans and lease payments which would otherwise be paid out of our cash balances.  In March 2010, we made certain amendments to the charter agreements with Ship Finance relating to 31 double hull crude oil tankers and OBOs, which resulted in our restricted cash deposits being reduced in exchange for a guarantee from us for the payment of charterhire. Withdrawals from these restricted cash deposits will be prohibited.  Restricted cash deposits held in respect of the Ship Finance charter reserves decreased by $111.7 million resulting from amendments to the charter agreements and $10.6 million due to reserves no longer required for two vessels. We also made an advance payment of charterhire less operating expenses of $72.8 million covering part of the payments due to Ship Finance over the six months from March 2010. As of December 31, 2010, $62.0 million of our restricted cash (2009: $184.3 million) serves to support our obligations to make charterhire payments to Ship Finance, and is subject to adjustment based on the number of charters that we maintain.

At December 31, 2010, ITCL's assets included $181.6 million (2009: $314.9 million) of restricted cash deposits which are held for the benefit of the holders of the Notes issued on behalf of ITCL subsidiaries. This restricted cash also included deposits, which can only be used to meet liabilities under the lease agreements. The decrease in these restricted cash deposits is primarily due to the settlement of two outstanding capital lease obligations upon termination of the leases and principal and interest payments to the note holders.

We currently have five VLCC and two Suezmax vessels under construction with an aggregate contract cost of approximately $650 million.  Installments of $198.6 million have been made on the newbuildings and the remaining installments to be paid as of December 31, 2010 amount to $451.4 million, with expected payments of approximately $106.9 million in 2011, $168.9 million in 2012 and $175.6 million in 2013.

In November 2010, the Company secured pre- and post-delivery financing in the amount of $147 million representing 70% of the contract price for the first two VLCCs to be delivered in 2012. For the three remaining VLCCs and the two Suezmax tanker newbuildings to be delivered between late 2012 and 2013, the Company has not yet established pre- and post-delivery financing.  Based on recently secured financing for the VLCCs we assume 70% financing of current market values for these newbuildings. On this basis, we have already paid the equity investment and the remaining newbuilding installments will be fully financed by bank debt.

In January 2008 and March 2008, Ship Finance sold the single hull vessels Front Maple and Front Sabang, respectively, and terminated our long-term leases for the vessels. We received termination payments of $16.7 million and $26.8 million, respectively.

In April 2008, we received a $16.6 million settlement from Bocimar NV following judgment in January 2008 of a court case in our favor.

In May and June 2008, we delivered the third and fourth heavy lift vessels, respectively, generating net cash proceeds of approximately $28.0 million (the net of an $80.0 million seller's credit and the remaining heavy lift conversion commitments).

In January 2009, the lease agreement between Buckingham Shipping plc, a majority-owned subsidiary, and Dresdner Kleinwort Leasing was terminated and the outstanding lease obligation was settled in full using restricted cash. At December 31, 2008, the outstanding lease obligation was $69.3 million. In January 2010, the lease agreement between Caernarfon Shipping plc, a majority-owned subsidiary, and Dresdner Kleinwort Leasing was terminated and the outstanding lease obligation was settled in full using restricted cash. At December 31, 2009, the outstanding lease obligation was $70.0 million. In July 2010, the lease agreement between Sandringham Shipping plc, a majority-owned subsidiary, and Dresdner Kleinwort Leasing was terminated and the outstanding lease obligation was settled in full using restricted cash. At June 30, 2010, the outstanding lease obligation was $66.2 million. These lease terminations were cash neutral for the Company.

52

In March 2009, Frontline Shipping III Limited ("FSL III"), our wholly owned subsidiary, and Ship Finance amended their charter ancillary agreement whereby the charter service reserve totaling $26.5 million relating to vessels on charter from Ship Finance may be in the form of a loan to Ship Finance. In March 2009, a loan in the amount of $26.5 million was drawn down by Ship Finance. The loan bore interest at LIBOR plus a margin and was repaid in 2010.

In July 2009, we agreed with Ship Finance to terminate the long term charterparty for the single hull VLCC Front Duchess and received a compensation payment of approximately $2.4 million in October 2009.

In February 2010, we acquired the VLCC Front Vista from Ship Finance for a purchase price of $58.5 million and agreed to sell the vessel with the purchase price to be paid in installments over a 10 year period. The purchase price was financed with a $15 million bank loan, a $26.5 million sellers credit from Ship Finance and equity. The buyer of

Front Vista has secured a 10 year time charter with a state owned oil company at a gross rate of $43,500 per day during the entire charter period.

In March 2010, Ship Finance sold the single hull vessel Golden River to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $2.9 million.

In April 2010, a majority-owned subsidiary of the Company sold the Front Voyager for $8.3 million. We also announced the acquisition of two 2009-built 321,300 dwt double hull VLCC tankers; Callisto Glory and Andromeda Glory from an unrelated third party for an aggregate purchase price of $204.9 million. The first vessel; renamed Front Eminence, was delivered on May 18, 2010 and the second vessel; renamed Front Endurance, was delivered on June 28, 2010. We secured a loan facility representing approximately 70 percent financing of the purchase price to part finance the purchase of the vessels.

During the year ended December 31, 2010, we paid total cash dividends of $155.7 million.  In the first quarter of 2011, we declared a cash dividend of $0.10 per share for the fourth quarter of 2010 representing a total cash payment of $7.8 million.

In January 2011, we sold the 2006-built VLCC Front Shanghai. The net sale proceeds were $91.2 million and, after repayment of debt, the sale generated $31.5 million in cash. In connection with the sale, we agreed to time charter back the vessel from the new owner for approximately two years at a rate of $35,000 per day.

In February 2011, we agreed with Ship Finance to terminate the long term charter parties between the companies for the two single hull VLCCs Ticen Sun and Front Ace and Ship Finance simultaneously sold the vessels. The termination of the charter parties took place in February 2011 and March 2011, respectively, and Ship Finance made a compensation payment to us of approximately $5.8 million for the early termination of the charter parties.

In March 2011, we exercised our option to acquire the 2002-built VLCC Front Eagle and simultaneously sold the vessel with expected delivery in the second quarter of 2011. The net sale proceeds are $67.0 million and, after repayment of debt, the sale will generate $10.0 million in cash. In connection with the sale, we agreed to time charter back the vessel from the new owner for approximately two years at a rate of $32,500 per day.

In April 2011, we agreed with Ship Finance to terminate the long term charter party between the companies for the OBO vessel Front Leader and Ship Finance simultaneously sold the vessel. The termination of the charter party is expected to take place in the second quarter of 2011 and we expect to make a compensation payment to Ship Finance of approximately $7.7 million for the early termination of the charter party.

Borrowing activities

In June 2006, we entered into an $80.0 million secured term loan facility. The proceeds were used to finance the acquisition of a 2006 built VLCC tanker. The facility bore interest at LIBOR plus a margin. The facility was refinanced in June 2008 and partially refinanced in June 2009 for $65.0 million and the remaining balance was repaid in June 2010 from a $200 million secured term loan facility discussed below.

53

In June 2008, we entered into a $129.6 million pre-delivery secured term loan facility. This loan was refinanced in June 2009 and bore interest at LIBOR plus a margin. The facility matured in June 2010. In June 2008, we also entered into a $420.0 million pre- and post-delivery secured term loan facility due in 2017. This facility bears interest at LIBOR plus a margin. At December 31, 2010, the facility was fully drawn and the outstanding amount on this facility was $363.0 million. In May 2009, we entered into a $146.4 million pre- and post-delivery secured term loan facility falling due in 2020. At December 31, 2010, facility was fully drawn and the outstanding amount on this facility was $142.8 million. This facility bears interest at LIBOR plus a margin. In November 2010, the Company secured pre- and post-delivery financing in the amount of $147 million representing 70 percent of the contract price for the first two VLCCs to be delivered in 2012. This facility was undrawn at December 31, 2010 and the available undrawn amount was $147 million. All four of these facilities were used, or will be used, to part finance our newbuilding program and are secured with the newbuildings.

In July 2008 and August 2008, ITCL entered into a $21.6 million and $50.0 million secured term loan facility, respectively. These facilities were used to purchase three tranches of Windsor Petroleum Transport Corporation 7.84% term notes with a par value of $38.0 million and were partially refinanced with a $33.0 million secured loan facility in June 2009. This facility was fully drawn at December 31, 2010 and matures in June 2011.

In September 2008, we entered into a $180.0 million secured term loan facility repayable over five years, which was used to part finance the acquisition of five second hand Suezmax vessels with a cost of $240.0 million. The facility bears interest at LIBOR plus a margin and is secured on the acquired vessels. At December 31, 2010, the outstanding amount on this facility was $99.0 million leaving no available undrawn amount.

On March 26, 2010, the Company announced the private placement of $225 million of convertible bonds and the offering of the bonds closed on April 14, 2010. The senior, unsecured convertible bonds have an annual coupon of 4.50%, which is paid quarterly in arrears and had a conversion price of $39.00. The bonds may be converted to Frontline Ltd common shares by the holders at anytime up to ten banking days prior to April 14, 2015. The reference price has been set at $29.7784 (NOK 180.0045). The applicable USD/NOK exchange rate has been set at 6.0448. The Company declared a dividend of $0.75 per share on May 21, 2010. The conversion price was adjusted from $39.00 to $38.0895 effective June 2, 2010 which was the date the shares traded ex-dividend. The Company declared a dividend of $0.75 per share on August 27, 2010. The conversion price was adjusted from $38.0895 to $37.0483 per share effective September 8, 2010, which was the ex-dividend date. There was no adjustment to the conversion price for the dividend of $0.15 per share, which was paid on December 21, 2010. On February 22, 2011 the Company announced a dividend of $0.10 per share. The conversion price was adjusted from $37.0483 to $36.5567 per share effective March 7, 2011, which was the ex-dividend date. The bonds will be issued and redeemed at 100% of their principal amount and will, unless previously redeemed, converted or purchased and cancelled, mature on April 14, 2015.

The Company has a right to redeem the bonds at par plus accrued interest at any time during the term of the loan, provided that 90% or more of the bonds issued shall have been redeemed or converted to shares. 6,154,822 new shares would be issued, if the bonds were converted at the current price of $36.5567.

In June 2010, the Company entered into a $200 million secured term loan facility falling due in 2015 in order to re-finance the remaining balance of a $80 million loan facility and part finance the purchase of Front Eminence and Front Endurance. At December 31, 2010 the balance outstanding on the loan was $196.9 million leaving no available undrawn amount. This facility bears interest at LIBOR plus a margin.

In December 2010, the Company entered into a $20 million secured term loan facility falling due in 2013. At December 31, 2010, no drawdown had taken place. This facility bears interest at LIBOR plus a margin.

Certain of the Company's loan agreements contain loan-to-value clauses, which could require the Company to post collateral or prepay a portion of the outstanding borrowings should the value of the vessels securing borrowings under each of such agreements decrease below required levels. In addition, the loan agreements contain certain financial covenants. The Company was in compliance with all of the financial covenants contained in the Company's loan agreements as of December 31, 2010.

54

Acquisitions and Disposals

Independent Tankers Corporation Limited

In February 2008, we divested 17.53% of our holding in ITCL through a stock and cash dividend of $11.4 million and $14.0 million, respectively. We recorded a gain of $18.0 million in the first quarter of 2008 as a result of this spin-off.

Navig8 Limited ("Navig8")

In February 2008, we invested $20.0 million in Navig8 against the issue of new share capital representing approximately 15.8% of the company. We sold this investment in October 2010 for net proceeds of $19.8 million.

Overseas Shipholding Group, Inc. ("OSG")

In March 2008, we entered into a forward contract to purchase 1,366,600 shares of OSG, which represented 4.4% of the total outstanding shares, for $92.2 million.  This contract was settled in October 2008. Also in October 2008, we sold 100,000 shares in OSG at a price of $64.50 per share. For the year ending December 31, 2009, we did not purchase or sell any shares of OSG.  As of December 31, 2010, we beneficially owned 1,408,868 shares of OSG. In January and February 2011, we sold all of our shares in OSG for $46.5 million.

Equity

In June 2008, we completed a private placement of three million shares at a subscription price of NOK 357 per share resulting in net proceeds of $207.2 million. We used these proceeds to part finance the acquisition of the five Suezmax vessels from Top Ships Inc. and the purchase of OSG shares.

Derivative Activities

In 2008, we entered a limited number of Forward Freight Agreements, or FFAs, with an objective to utilize them as economic hedging instruments that reduce our exposure to changes in the spot market rates earned by some of our vessels or for trading purposes to take advantage of short term fluctuations in the market. All of the FFAs were settled as of December 31, 2008. In 2008, realized losses of $1.2 million have been recorded in the income statement. In 2010, we entered a limited number of FFAs for speculative trading purposes. As of December 31, 2010, the Company had 26 contracts outstanding (2009: zero). We incurred a loss on forward freight contracts of $0.02 million in 2010 (2009: zero).

Tabular disclosure of contractual obligations

At December 31, 2010, we had the following contractual obligations and commitments:

	Payment due by period
(In thousands of $)	Less than 1 year		1 – 3 years		3 – 5 years		After 5 years		Total
Fixed rate long-term debt		15,152		39,845		271,550		201,742		528,289
Floating rate long-term debt		158,443		165,389		179,649		332,588		836,069
Fixed rate long-term debt in unconsolidated subsidiaries		9,526		19,052		19,051		-		47,629
Operating lease obligations		69,301		21,400		3,029		-		93,730
Capital lease obligations		193,379		259,404		321,867		755,637		1,530,287
Newbuilding commitments		106,868		344,548		-		-		451,416
Interest on fixed rate long-term debt		33,822		63,538		54,307		54,377		206,044
Interest on floating rate long-term debt		38,041		58,216		43,524		34,678		174,459
Interest on fixed rate long-term debt in unconsolidated subsidiaries		3,652		4,870		1,623		-		10,145
Interest on capital lease obligations		97,913		159,453		121,287		192,356		571,009
Total		726,097		1,135,715		1,015,887		1,571,378		4,449,076

55

Interest payments are based on the existing borrowings of both consolidated and unconsolidated subsidiaries. It is assumed that no refinancing of existing loans takes place. Interest on floating rate debt has been calculated using the five year U.S. dollar swap rate of 2.08% plus agreed margins as of March 15, 2011. Interest on fixed rate loans is calculated using the contracted interest rates.

The newbuilding commitments as of December 31, 2010 consist of five VLCC and two Suezmax vessels.

As of December 31, 2010, the Company leased in 41 vessels on long-term time charters and bareboat charters from third parties and related parties.  Four of these long-term time charters and bareboat charters are classified as operating leases and 37 as capital leases. In addition, eight are leased on short-term fixed rate charters which are classified as operating leases. With the exception of the Company's long-term leases with Ship Finance, the Company's long-term leases of vessels generally contain optional renewal periods and purchase and put options.

Off balance sheet financing

Charter hire payments to third parties for certain contracted in vessels are accounted for as operating leases. We are also committed to make rental payments under operating leases for office premises. The future minimum rental payments under our non-cancellable operating leases are disclosed above in "Tabular disclosure of contractual obligations".

Forward-looking information discussed in this Item 5 includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. Please see "Cautionary Statement Regarding Forward-Looking Statements" in this report.

Safe harbor

Forward-looking information discussed in this Item 5 includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. Please see "Cautionary Statement Regarding Forward-Looking Statements" in this report.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.  DIRECTORS AND SENIOR MANAGEMENT

The following table sets forth information regarding our executive officers and directors and certain key officers of our wholly owned subsidiary, Frontline Management AS, who are responsible for overseeing our management.

Name	Age	Position
John Fredriksen	66	Chairman, Chief Executive Officer, President and  Director
Cecilie Fredriksen	27	Director
Kate Blankenship	46	Director and Audit Committee Chairman
Tony Curry	60	Director
Jens Martin Jensen	47	Chief Executive Officer of Frontline Management AS
Inger M. Klemp	48	Chief Financial Officer of Frontline Management AS

Tor Olav Trøim acts as an alternate director for Cecilie Fredriksen.

Certain biographical information about each of our directors and executive officers is set forth below.

56

John Fredriksen has served as Chairman of the Board, Chief Executive Officer, President and a director of the Company since November 3, 1997.  Mr. Fredriksen has established trusts for the benefit of his immediate family which control Hemen, our largest shareholder.  Mr. Fredriksen is Chairman, President and a director of a related party Seadrill Limited, a Bermuda company listed on the Oslo Stock Exchange.  He is also a director of a related party Golar LNG Limited, or Golar, a Bermuda company listed on the Nasdaq Global Market and the Oslo Stock Exchange whose principal shareholder is World Shipholding Limited, a company indirectly controlled by trusts established by Mr. John Fredriksen for the benefit of his immediate family.  He is also a director of a related party Golden Ocean Group Limited, or Golden Ocean, a Bermuda company listed on the Oslo Stock Exchange whose principal shareholder is Hemen.

Cecilie Fredriksen has been a director since September 2010. Ms. Fredriksen is also a director of Aktiv Kapital ASA, Northern Offshore Ltd., Ship Finance International Limited, Golden Ocean Group Limited and Seawell Limited. She received a BA in Business and Spanish from the London Metropolitan University in 2006. Ms. Fredriksen is a Norwegian citizen, resident in the UK. Ms. Fredriksen is the daughter of Mr. John Fredriksen, our Chairman and Chief Executive Officer.

Kate Blankenship has been a director since August 2003. Mrs. Blankenship joined the Company in 1994 and served as the Company's Chief Accounting Officer and Company Secretary until October 2005. Mrs. Blankenship served as Chief Financial Officer of Knightsbridge Tankers Limited from April 2000 to September 2007 and Secretary of Knightsbridge from December 2000 to March 2007. Mrs. Blankenship has been a Director of Ship Finance since October 2003.  Mrs. Blankenship has served as a director of Independent Tankers Corporation Limited since February 2008, Golar LNG Limited since July 2003, Golden Ocean since November 2004, Seadrill Limited since May 2005, Seawell Limited since its inception in August 2007 and Golar LNG Energy Limited since its inception in June 2009.  She is a member of the Institute of Chartered Accountants in England and Wales.

Tony Curry has been a director since October 2009. Mr. Curry retired from Shell in May 2009 having spent 40 years in Shell Shipping. For the last 12 years Mr. Curry was the Time Charter and Sale and Purchase Manager. Prior to this, Mr. Curry spent seven years in Shell Western Services, Nassau, Bahamas as the Oil Freight Manager. Mr. Curry is very familiar with the international oil and tanker sector and also the growing LNG and LPG areas.

Jens Martin Jensen served as the Acting Chief Executive Officer of Frontline Management AS since April 2008 and was appointed as permanent Chief Executive Officer in May 2009. Mr. Jensen joined Frontline in September 2004 as Commercial Director. From August 1996 to September 2004, Mr. Jensen was a partner in Island Shipbrokers in Singapore. From April 1985 to August 1996, Mr. Jensen worked in the A.P. Moller Group with postings to Singapore, Tokyo, Mexico and Denmark. Mr. Jensen completed the A.P. Moller training program in 1987.

Inger M. Klemp has served as Chief Financial Officer of Frontline Management AS since June 1, 2006. Mrs. Klemp has served as a director of Independent Tankers Corporation Limited since February 2008 and has served as Chief Financial Officer of Knightsbridge Tankers Limited since September 2007. Mrs. Klemp served as Vice President Finance from August 2001 until she was promoted in May 2006. Mrs. Klemp graduated as MSc in Business and Economics from the Norwegian School of Management (BI) in 1986. Mrs. Klemp served as Assistant Director Finance in Color Group ASA from 1998 to 2001 and as Group Financial Manager in Color Line ASA from 1992 to 1998, a Norwegian based cruise operator which was stock listed up to October 1999. From 1989 to 1992 Mrs. Klemp served as Assistant Vice President in Nordea Bank Norge ASA handling structuring and syndication of loan facilities in the international banking market. From 1986 to 1989, Mrs. Klemp served as a lending officer of Fokus Bank ASA.

B.  COMPENSATION

During the year ended December 31, 2010, we paid to our directors and executive officers (eight persons) aggregate cash compensation of $1,662,567 and an aggregate amount of $39,398 for pension and retirement benefits. In addition to cash compensation, during 2010 we also recognized stock compensation expense of $990,891 in respect of 320,000 options, which were granted in October 2009 under the Frontline Ltd. Share Option Scheme.  All options vest over a three year period beginning in October 2010 and expire in October 2014. The initial exercise price of these options is NOK 145.00, which is reduced by the amount of dividends paid after the date of grant. The exercise price of these options as of December 31, 2010 is NOK 131.65.

57

C.  BOARD PRACTICES

In accordance with our Bye-laws the number of Directors shall be such number not less than two as our shareholders by Ordinary Resolution may from time to time determine and each Director shall hold office until the next annual general meeting following his election or until his successor is elected. We currently have four Directors.

We currently have an audit committee, which is responsible for overseeing the quality and integrity of our financial statements and its accounting, auditing and financial reporting practices, our compliance with legal and regulatory requirements, the independent auditor's qualifications, independence and performance and our internal audit function. Our audit committee consisted of two members, Mr. Savvides and Mrs. Blankenship, during 2010. Mr. Savvides resigned from the Board of Directors in February 2011.

In lieu of a compensation committee comprised of independent directors, our Board of Directors is responsible for establishing the executive officers' compensation and benefits.  In lieu of a nomination committee comprised of

independent directors, our Board of Directors is responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees.

Our officers are elected by the Board of Directors as soon as possible following each Annual General Meeting and shall hold office for such period and on such terms as the Board may determine.

There are no service contracts between us and any of our Directors providing for benefits upon termination of their employment or service.

As a foreign private issuer we are exempt from certain requirements of the New York Stock Exchange that are applicable to U.S. listed companies.  For a listing and further discussion of how our corporate governance practices differ from those required of U.S. companies listed on the New York Stock Exchange, please see Item 16G or visit the corporate governance section of our website at www.frontline.bm.

D.  EMPLOYEES

As of December 31, 2010, Frontline and its subsidiaries employed approximately 70 people in their respective offices in Bermuda, London, Oslo, Singapore and India. We contract with independent ship managers to manage and operate our vessels.

E.  SHARE OWNERSHIP

The beneficial interests of our Directors and officers in the Ordinary Shares of Frontline as of February 28, 2011, were as follows:

Director or Officer	Ordinary Shares of $2.50 each		% of Ordinary Shares Outstanding		Options for Ordinary Shares of $2.50 each
John Fredriksen*		*		*		100,000
Cecilie Fredriksen		-		-		-
Kate Blankenship		2,000		**		30,000
Tony Curry		-		-		30,000
Jens Martin Jensen		-		-		50,000
Inger M. Klemp		16,000		**		50,000

*

Hemen Holding Ltd, or Hemen, is a Cyprus holding company, which is indirectly controlled by trusts established by Mr. John Fredriksen for the benefit of his immediate family. Mr. Fredriksen disclaims beneficial ownership of the 26,304,053 Ordinary Shares held by Hemen, except to the extent of his voting and dispositive interest in such shares of common stock. Mr. Fredriksen has no pecuniary interest in the shares held by Hemen.

**

Less than one per cent.

58

The options were granted in October 2009 under the Frontline Ltd. Share Option Scheme, which was approved at the Company's Annual General Meeting on September 25, 2009. All options vest over a three year period beginning in October 2010 and expire in October 2014. The initial exercise price of these options is NOK 145.00, which is reduced by the amount of dividends paid after the date of grant. The exercise price of these options as of December 31, 2010 is NOK 131.65.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.  MAJOR SHAREHOLDERS

The following table presents certain information as at February 28, 2011, regarding the ownership of our Ordinary Shares with respect to each shareholder whom we know to beneficially own more than five percent of our outstanding Ordinary Shares.

Owner	Ordinary Shares Amount	%
Hemen Holding Ltd. (1)	26,304,053		33.78	%
Allianz Global Investors Capital LLC	4,575,500		5.90	%

(1) Hemen Holding Ltd, or Hemen, is a Cyprus holding company, which is indirectly controlled by trusts established by Mr. John Fredriksen for the benefit of his immediate family. Mr. Fredriksen disclaims beneficial ownership of the 26,304,053 Ordinary Shares held by Hemen, except to the extent of his voting and dispositive interest in such shares of common stock. Mr. Fredriksen has no pecuniary interest in the shares held by Hemen.

As of March 9, 2011, 45,397,866 of our Ordinary Shares were held on the New York Stock Exchange.

Our major shareholders have the same voting rights as our other shareholders. No corporation or foreign government owns more than 50% of our outstanding Ordinary Shares. We are not aware of any arrangements, the operation of which may at a subsequent date result in a change in control of Frontline.

B.  RELATED PARTY TRANSACTIONS

The majority of the Company's leased vessels are leased from Ship Finance and under a Charter Ancillary Agreement; Ship Finance is entitled to a share of 20% of the Company's earnings on these leased vessels. A summary of leasing transactions with Ship Finance during the years ended December 31, 2010, 2009 and 2008 is as follows:

(in thousands of $)	2010		2009		2008
Charterhire paid (principal and interest)		289,578		331,534		345,551
Payments received for termination of leases		2,435		2,386		43,510
Profit share expense		30,566		33,018		110,962
Remaining lease obligation		1,289,897		1,462,753		1,609,987

A summary of net amounts earned (incurred) from related parties excluding the Ship Finance lease related balances above for the years ended December 31, 2010, 2009 and 2008 are as follows:

(in thousands of $)	2010			2009			2008
Seatankers Management Co. Ltd		1,092			1,126			1,175
Golar LNG Limited		1,310			156			17
Golar LNG Energy Limited		88			-			-
Ship Finance International Limited		2,490			2,347			3,430
Golden Ocean Group Limited		6,138			4,253			6,714
Geveran Trading Co Ltd		-			(405	)		(366	)
Bryggegata AS		(1,368	)		(1,300	)		(1,395	)
Arcadia Petroleum Limited		34,211			42,264			64,784
Seadrill Limited		426			322			25
Seawell Limited		166			126			-

59

Deep Sea Supply Plc	132	32	-
Aktiv Kapital ASA	83	63	-
CalPetro Tankers (Bahamas I) Limited	47	45	43
Calpetro Tanker (Bahamas II) Limited	47	45	43
Calpetro Tankers (IOM) Limited	47	45	43

Net amounts earned from related parties comprise charterhire, office rental income and management, technical and commercial advisory, newbuilding supervision, corporate and administrative service income and interest income. Net expenses paid to related parties comprise primarily of rental for office space.

A summary of balances with related parties as at December 31, 2010 and 2009 is as follows:

(in thousands of $)	2010	2009
Receivables
Ship Finance International Limited	1,947	26,944
Seatankers  Management Co. Ltd	-	214
Seawell Ltd	51	-
Golar LNG Limited	404	247
Golar LNG Energy Limited	11	-
Northern Offshore Ltd	13	13
Golden Ocean Group Limited	1,075	1,119
Seadrill Limited	109	160
CalPetro Tankers (Bahamas I) Limited	20	11
CalPetro Tankers (Bahamas II) Limited	20	11
CalPetro Tankers (IOM) Limited	20	11
Deep Sea Supply Plc	2	2
Arcadia Petroleum Limited	3,553	11
	7,225	28,743

(in thousands of $)	2010		2009
Payables
Ship Finance International Limited	(31,448	)	(33,158	)
Seatankers Management Co. Ltd	(676	)	(96	)
Golar LNG Limited	(97	)	(519	)
Golden Ocean Group Limited	(1,057	)	(30	)
	(33,278	)	(33,803	)

Receivables and payables with related parties comprise unpaid management, technical advisory, newbuilding supervision, administrative service and rental charges and charterhire payments.  In addition, certain payables and receivables arise when the Company pays an invoice on behalf of a related party and vice versa.  The payable with Ship Finance also includes unpaid profit share due to Ship Finance. Receivables and payables with related parties are generally settled quarterly in arrears with the exception of profit share due to Ship Finance which is settled annually.

Ship Finance International Limited, Golar LNG Limited, Golar LNG Energy Limited, Northern Offshore Ltd, Seadrill Limited, Bryggegata AS, Golden Ocean Group Limited, Arcadia Petroleum Limited ("Arcadia"), Geveran Trading Co Ltd ("Geveran"), Deep Sea Supply Plc ("Deep Sea"), Aktiv Kapital ASA, Seawell Limited ("Seawell"), and Seatankers Management Co. Ltd are each subject to the significant influence or indirect control of John Fredriksen. CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited and CalPetro Tankers (IOM) Limited are equity accounted.

During 2008, the Company engaged in the trading of forward freight agreement trading through Arcadia, a related party, for which Arcadia was paid commission on each trade. The total amount of commissions paid to Arcadia in 2008 was $12,500. The Company did not engage in forward freight agreement trading in 2009 and 2010. In addition, the Company earned freights on chartering vessels to Arcadia in the amount of $33.9 million (2009: $42.5 million).

60

Effective February 5, 2010, Vista International Finance Inc, a wholly owned subsidiary of the Company purchased the VLCC, Front Vista, from Ship Finance for $58.5 million. The Front Vista had been chartered in by the Company. Due to the termination of the charter, a compensation fee of $0.4 million was paid to Ship Finance.

In March 2010, the Company made certain amendments to the charter agreements with Ship Finance relating to 31 double hull crude oil tankers and OBOs, which resulted in our restricted cash deposits being reduced in exchange for a guarantee from us for the payment of charterhire. Withdrawals from these restricted cash deposits will be prohibited. Restricted cash deposits held in respect of the Ship Finance charter reserves decreased by $111.7 million resulting from amendments to the charter agreements and $10.6 million due to reserves no longer required for two vessels. We also made an advance payment of charterhire less operating expenses of $72.8 million covering part of the payments due to Ship Finance over the six months from March 2010.

In March 2010, Ship Finance sold the single hull vessel Golden River to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $2.9 million.

In August 2010, Frontline sold 25% of SeaTeam Singapore Pte Limited to Golden Ocean Group Limited for $0.1 million and recognized a gain on sale of $0.2 million in the statement of equity. In addition SeaTeam Singapore Pte Limited received a loan of $0.5 million from Golden Ocean Group Limited, which is repayable over a term of five years and bears interest at 2.5% per annum.

In March 2009, a wholly owned subsidiary of the Company and Ship Finance amended their charter ancillary agreement whereby the charter service reserve totaling $26.5 million relating to vessels on charter from Ship Finance may be in the form of a loan to Ship Finance. In March 2009, a loan in the amount of $26.5 million was drawn down by Ship Finance. The loan bears interest at LIBOR plus a margin and was repaid in 2010.

Geveran acted as a guarantor for two loan facilities taken out by ITCL that expired in July and August 2009. Geveran received an annual fee of 2% of the drawndown facility for acting as guarantor. Both of these facilities were refinanced by ITCL during 2010, with the Company acting as guarantor.

C.  INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8.   FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

See Item 18.

Legal Proceedings

We are a party, as plaintiff or defendant, to several lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the operation of its vessels, in the ordinary course of business or in connection with its acquisition activities. We believe that the resolution of such claims will not have a material adverse effect on the Company's operations or financial condition.

Dividend Policy

The timing and amount of dividends, if any, is at the discretion of our Board of Directors. The level of dividend will be guided by present earnings, market prospects, current capital expenditure programs as well as investment opportunities. We have paid the following cash dividends in 2008, 2009 and 2010.

61

Payment Date	Amount per Share
2008
March 10, 2008	$	2.00
June 25, 2008	$	2.75
September 19, 2008	$	3.00
December 22, 2008	$	0.50
2009
March 27, 2009	$	0.25
June 23, 2009	$	0.25
September 24, 2009	$	0.25
December 22, 2009	$	0.15
2010
March 30, 2010	$	0.25
June 21, 2010	$	0.75

September 24, 2010	$	0.75
December 21, 2010	$	0.25

On February 21, 2011 the Board declared a cash dividend of $0.10 per share for the fourth quarter of 2010 which was paid on March 23, 2011.

B. SIGNIFICANT CHANGES

None.

ITEM 9.    THE OFFER AND LISTING

The Company's Ordinary Shares are traded on the New York Stock Exchange, or NYSE, the Oslo Stock Exchange, or OSE, and on the London Stock Exchange, or LSE, under the symbol "FRO".

The New York Stock Exchange is the Company's "primary listing". As an overseas company with a secondary listing on the LSE, the Company is not required to comply with certain listing rules applicable to companies with a primary listing on the LSE. The listing on the OSE is also a secondary listing. The Company's Ordinary Shares have been thinly traded on the London Stock Exchange since 1999.

The following table sets forth, for the five most recent fiscal years, the high and low prices for the Ordinary Shares on the NYSE and OSE.

	NYSE				OSE
	High		Low		High	Low
Fiscal year ended December 31,
2010	$	38.85	$	24.98	NOK 236.70	NOK 146.40
2009	$	33.29	$	15.78	NOK 235.00	NOK 107.00
2008	$	72.36	$	25.00	NOK 376.50	NOK 165.25
2007	$	53.09	$	29.35	NOK 306.00	NOK 183.75
2006	$	44.65	$	28.80	NOK 280.00	NOK 184.00

The following table sets forth, for each full financial quarter for the two most recent fiscal years, the high and low prices of the Ordinary Shares on the NYSE and the OSE.

	NYSE				OSE
	High		Low		High	Low
Fiscal year ended December 31, 2010
First quarter	$	34.15	$	25.02	NOK 194.00	NOK 146.40
Second quarter	$	38.85	$	28.19	NOK 236.70	NOK 185.30
Third quarter	$	33.95	$	25.74	NOK 209.20	NOK 160.50
Fourth quarter	$	29.17	$	24.98	NOK 174.60	NOK 147.40

62

	NYSE				OSE
	High		Low		High	Low
Fiscal year ended December 31, 2009
First quarter	$	33.29	$	15.78	NOK 235.00	NOK 112.00
Second quarter	$	28.59	$	17.00	NOK 186.50	NOK 107.00
Third quarter	$	25.28	$	19.76	NOK 164.00	NOK 125.70
Fourth quarter	$	29.88	$	21.50	NOK 175.90	NOK 124.20

The following table sets forth, for the most recent six months, the high and low prices for the Ordinary Shares on the NYSE and OSE.

	NYSE				OSE
	High		Low		High	Low
February 2011	$	27.45	$	25.56	NOK 159.00	NOK 140.20

January 2011	$	27.76	$	24.41	NOK 169.50	NOK 140.90
December 2010	$	26.37	$	24.98	NOK 163.60	NOK 147.40
November 2010	$	29.15	$	25.53	NOK 174.60	NOK 156.20
October 2010	$	29.17	$	26.15	NOK 170.80	NOK 151.50
September 2010	$	29.47	$	26.37	NOK 179.10	NOK 161.20

ITEM 10.    ADDITIONAL INFORMATION

A.  SHARE CAPITAL

Not applicable.

B.  MEMORANDUM AND ARTICLES OF ASSOCIATION

The Memorandum of Association of the Company has previously been filed as Exhibit 3.1 to the Company's Registration Statement on Form F-1, (Registration No. 33-70158) filed with the Securities and Exchange Commission on October 13, 1993, and is hereby incorporated by reference into this Annual Report.

At the 2007 Annual General Meeting of the Company, our shareholders voted to amend the Company's Bye-laws to ensure conformity with recent revisions to the Bermuda Companies Act 1981, as amended.  These amended Bye-laws of the Company as adopted on September 28, 2007, are incorporated by reference in Exhibit 1.2 to this Annual Report.

The purposes and powers of the Company are set forth in Items 6(1) and 7(a) through (h) of our Memorandum of Association and in the Second Schedule of the Bermuda Companies Act of 1981 which is attached as an exhibit to our Memorandum of Association.  These purposes include exploring, drilling, moving, transporting and refining petroleum and hydro-carbon products, including oil and oil products; the acquisition, ownership, chartering, selling, management and operation of ships and aircraft; the entering into of any guarantee, contract, indemnity or suretyship and to assure, support, secure, with or without the consideration or benefit, the performance of any obligations of any person or persons; and the borrowing and raising of money in any currency or currencies to secure or discharge any debt or obligation in any manner.

The Company's Bye-laws provide that its board of directors shall convene and the Company shall hold annual general meetings in accordance with the requirements of the Bermuda Companies Act of 1981 at such times and places (other than Norway) as the Board shall decide.  The board of directors may call special meetings at its discretion or as required by the Bermuda Companies Act of 1981.

Bermuda law permits the Bye-laws of a Bermuda company to contain provisions excluding personal liability of a director, alternate director, officer, member of a committee authorized under Bye-law 104, resident representative or their respective heirs, executors or administrators to the company for any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence default, breach of duty or breach of trust of which the officer or person may be guilty.  Bermuda law also grants companies the power generally to indemnify directors, alternate directors and officers of the Company and any members of a committee authorized under Bye-law 104, resident representatives or their respective heirs, executors or administrators if any such person was or is a party or threatened to be made a party to a threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director, alternate director or officer of the Company or member of a committee authorized under Bye-law 104, resident representative or their respective heirs, executors or administrators or was serving in a similar capacity for another entity at the company's request.

63

Special rights attaching to any class of our shares may be altered or abrogated with the consent in writing of not less than 75% of the issued and shares of that class or with the sanction of a resolution passed at a separate general meeting of the holders of such shares voting in person or by proxy.

The Company's Bye-laws do not prohibit a director from being a party to, or otherwise having an interest in, any transaction or arrangement with the Company or in which the Company is otherwise interested.  The Company's Bye-laws provide that a director who has an interest in any transaction or arrangement with the Company and who has complied with the provisions of the Companies Acts and with its Bye-Laws with regard to disclosure of such interest shall be taken into account in ascertaining whether a quorum is present, and will be entitled to vote in respect of any transaction or arrangement in which he is so interested.  The Company's Bye-laws provide its board of directors the authority to exercise all of the powers of the Company to borrow money and to mortgage or charge all or any part of our property and assets as collateral security for any debt, liability or obligation.  The Company's directors are not required to retire because of their age, and the directors are not required to be holders of the Company's Ordinary Shares.  Directors serve for one year terms, and shall serve until re-elected or until their successors are appointed at the next annual general meeting.

The Company's Bye-laws provide that no director, alternate director, officer, person or member of a committee, if any, resident representative, or his heirs, executors or administrators, which we refer to collectively as an indemnitee, is liable for the acts, receipts, neglects, or defaults of any other such person or any person involved in our formation, or for any loss or expense incurred by us through the insufficiency or deficiency of title to any property acquired by us, or for the insufficiency of deficiency of any security in or upon which any of our monies shall be invested, or for any loss or damage arising from the bankruptcy, insolvency, or tortious act of any person with whom any monies, securities, or effects shall be deposited, or for any loss occasioned by any error of judgment, omission, default, or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in relation to the execution of his duties, or supposed duties, to us or otherwise in relation thereto.  Each indemnitee will be indemnified and held harmless out of our funds to the fullest extent permitted by Bermuda law against all liabilities, loss, damage or expense (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him as such director, alternate director, officer, person or committee member or resident representative (or in his reasonable belief that he is acting as any of the above).  In addition, each indemnitee shall be indemnified against all liabilities incurred in defending any proceedings, whether civil or criminal, in which judgment is given in such indemnitee's favor, or in which he is acquitted.  The Company is authorized to purchase insurance to cover any liability it may incur under the indemnification provisions of its Bye-laws.

There are no pre-emptive, redemption, conversion or sinking fund rights attached to our Ordinary Shares.  Holders of Ordinary Shares are entitled to one vote per share on all matters submitted to a vote of holders of Ordinary Shares.  Unless a different majority is required by law or by our bye-laws, resolutions to be approved by holders of Ordinary Shares require approval by a simple majority of votes cast at a meeting at which a quorum is present.

In the event of our liquidation, dissolution or winding up, the holders of Ordinary Shares are entitled to share in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any outstanding preference shares.

The Company's Bye-laws provide that its board of directors may, from time to time, declare and pay dividends out of contributed surplus.  Each Ordinary Share is entitled to dividends if and when dividends are declared by the board of directors, subject to any preferred dividend right of the holders of any preference shares.

There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our Ordinary Shares.

The Company's Bye-laws provide that any person, other than its registrar, who acquires or disposes of an interest in shares which triggers a notice requirement of the Oslo Stock Exchange must notify the Company's registrar immediately of such acquisition or disposal and the resulting interest of that person in shares.

The Company's Bye-laws laws require the Company to provide notice to the Oslo Stock Exchange if a person resident for tax purposes in Norway (or such other jurisdiction as the Board may nominate from time to time) is found to hold 50% or more of the Company's aggregate issued share capital, or holds shares with 50% or more of the outstanding voting power, other than the Company's registrar.  The Company's Bye-laws also require it to comply with requirements that the Oslo Stock Exchange may impose from time to time relating to notification of the Oslo Stock Exchange in the event of specified changes in the ownership of the Company's Ordinary Shares.

64

C. MATERIAL CONTRACTS

Gemini Pool

Frontline Chartering Services, Inc., or FCS, a wholly-owned subsidiary, Gemini Tankers LLC, or Gemini Tankers, Teekay Chartering Ltd., Koenig & Cie GMBH & Co and Hyundai Merchant Marine (Europe) Ltd entered into an Amended & Restated Pool Agreement regarding the Gemini Tankers Suezmax Pool, or the Pool, with effect from January 1, 2009. This agreement amended a pool agreement, which became effective on December 1, 2003 between the above parties excluding FCS. The Pool is commercially operated by the Gemini Tankers, or the Pool Manager, which employs the vessels in the Pool under a contract with a particular charterer or shipper for a number of voyages, with each single voyage or contract of carriage being performed by a pool vessel after nomination by the Pool Manager. Each participant in the Pool shall, in relation to each of its vessels, maintain the vessel in a seaworthy condition and to defined technical and operational standards and obtain and maintain the required number of vettings. Each participant in the Pool shall also keep its vessels in the Pool insured for its own account and is responsible for the technical management of its vessels.

D.  EXCHANGE CONTROLS

The Bermuda Monetary Authority (the "BMA") must give permission for all issuances and transfers of securities of a Bermuda exempted company like ours. We have received general permission from the BMA to issue any unissued common shares and for the free transferability of our common shares as long as our common shares are listed on an "appointed stock exchange".  Our common shares are listed on the New York, Oslo and London Stock Exchanges. The New York Stock Exchange, which is an "appointed stock exchange" is the Company's "primary listing".  Our common shares may therefore be freely transferred among persons who are residents and non-residents of Bermuda.

Although we are incorporated in Bermuda, we are classified as a non-resident of Bermuda for exchange control purposes by the BMA.  Other than transferring Bermuda Dollars out of Bermuda, there are no restrictions on our ability to transfer funds into and out of Bermuda or to pay dividends to U.S. residents who are holders of common shares or other nonresidents of Bermuda who are holders of our common shares in currency other than Bermuda Dollars.

In accordance with Bermuda law, share certificates may be issued only in the names of corporations, individuals or legal persons. In the case of an applicant acting in a special capacity (for example, as an executor or trustee), certificates may, at the request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any such special capacity, we are not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or trust.

We will take no notice of any trust applicable to any of our shares or other securities whether or not we had notice of such trust.

As an "exempted company", we are exempt from Bermuda laws which restrict the percentage of share capital that may be held by non-Bermudians, but as an exempted company, we may not participate in certain business transactions including: (i) the acquisition or holding of land in Bermuda (except that required for its business and held by way of lease or tenancy for terms of not more than 21 years) without the express authorization of the Bermuda legislature; (ii) the taking of mortgages on land in Bermuda to secure an amount in excess of $50,000 without the consent of the Minister of Business Development and Tourism of Bermuda; (iii) the acquisition of any bonds or debentures secured on any land in Bermuda except bonds or debentures issued by the Government of Bermuda or by a public authority in Bermuda; or (iv) the carrying on of business of any kind in Bermuda, except in so far as may be necessary for the carrying on of its business outside Bermuda or under a license granted by the Minister of Business Development and Tourism of Bermuda.

The Bermuda government actively encourages foreign investment in "exempted" entities like us that are based in Bermuda but do not operate in competition with local business. In addition to having no restrictions on the degree of foreign ownership, we are subject neither to taxes on our income or dividends nor to any exchange controls in Bermuda. In addition, there is no capital gains tax in Bermuda, and profits can be accumulated by us, as required, without limitation. There is no income tax treaty between the United States and Bermuda pertaining to the taxation of income other than applicable to insurance enterprises.

65

E.  TAXATION

United States Taxation

The following discussion is based upon the provisions of the United States Internal Revenue Code of 1986, as amended, or the Code, existing and proposed United States Treasury Department regulations, administrative rulings and pronouncements and judicial decisions, all as of the date of this Annual Report.  Unless otherwise noted, references to the "Company" include the Company's Subsidiaries.  This discussion assumes that the Company does not have an office or other fixed place of business in the United States.

Taxation of the Company's Shipping Income: In General

The Company anticipates that it will derive substantially all of its gross income from the use and operation of vessels in international commerce and that this income will principally consist of freights from the transportation of cargoes, charterhire or lease from time or voyage charters and the performance of services directly related thereto, which the Company refers to as "shipping income."

Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the United States will be considered to be 100% derived from sources within the United States. The Company is not permitted by law to engage in transportation that gives rise to 100% United States source income.

Shipping income attributable to transportation exclusively between non-United States ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to United States federal income tax.

Based upon the Company's current and anticipated shipping operations, the Company's vessels will operate in various parts of the world, including to or from United States ports. Unless exempt from United States federal income taxation under Section 883 of the Code, or Section 883, the Company will be subject to United States federal income taxation, in the manner discussed below, to the extent its shipping income is considered derived from sources within the United States.

Application of Section 883

Under the relevant provisions of Section 883, the Company will be exempt from United States federal income taxation on its United States source shipping income if:

(i) It is organized in a qualified foreign country which is one that grants an equivalent exemption from taxation to corporations organized in the United States in respect of the shipping income for which exemption is being claimed under Section 883 and which the Company refers to as the "country of organization requirement"; and

(ii) It can satisfy any one of the following two stock ownership requirements for more than half the days during the taxable year:

● the Company's stock is "primarily and regularly" traded on an established securities market located in the United States or a qualified foreign country, which the Company refers to as the "Publicly-Traded Test"; or

● more than 50% of the Company's stock, in terms of value, is beneficially owned by any combination of one or more individuals who are residents of a qualified foreign country or foreign corporations that satisfy the country of organization requirement and the Publicly-Traded Test, which the Company refers to as the "50% Ownership Test."

66

 The United States Treasury Department has recognized Bermuda, the country of incorporation of the Company and certain of its subsidiaries, as a qualified foreign country. In addition, the United States Treasury Department has recognized Liberia, the Isle of Man and the Bahamas, the countries of incorporation of certain of the Company's vessel-owning subsidiaries, as qualified foreign countries. Accordingly, the Company and its vessel owning subsidiaries satisfy the country of organization requirement.

Therefore, the Company's eligibility for exemption under Section 883 is wholly dependent upon being able to satisfy one of the stock ownership requirements.

For the 2010 taxable year, the Company satisfied the Publicly-Traded Test since, on more than half the days of the taxable year, the Company's Ordinary Shares were primarily and regularly traded on the New York Stock Exchange.

Taxation in Absence of Section 883 Exemption

To the extent the benefits of Section 883 are unavailable with respect to any item of United States source income, the Company's United States source shipping income, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which the Company refers to as the "4% gross basis tax regime". Since under the sourcing rules described above, no more than 50% of the Company's shipping income would be treated as being derived from United States sources, the maximum effective rate of United States federal income tax on the Company's shipping income would never exceed 2% under the 4% gross basis tax regime.

Gain on Sale of Vessels

Regardless of whether the Company qualifies for exemption under Section 883, the Company will not be subject to United States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles.  In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States.  It is expected that any sale of a vessel by the Company will be considered to occur outside of the United States.

Taxation of United States Holders

The following is a discussion of the material United States federal income tax considerations relevant to an investment decision by a United States Holder, as defined below, with respect to the Ordinary Shares.  This discussion does not purport to deal with the tax consequences of owning Ordinary Shares to all categories of investors, some of which, such as dealers in securities, tax-exempt organizations, investors whose functional currency is not the United States dollar and investors that own, actually or under applicable constructive ownership rules, 10% or more of the Company's Ordinary Shares, may be subject to special rules.  You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under United States federal, state, local or foreign law of the ownership of Ordinary Shares.

As used herein, the term "United States Holder" means a beneficial owner of Ordinary Shares that (i) is a United States citizen or resident, a United States corporation or other United States entity taxable as a corporation, an estate, the income of which is subject to United States federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust and (ii) owns the Ordinary Shares as a capital asset, generally, for investment purposes.

If a partnership holds Ordinary Shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership.  If you are a partner in a partnership holding Ordinary Shares, you are encouraged to consult your own tax advisor regarding the United States federal income tax consequences of owning an interest in a partnership that holds Ordinary Shares.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by the Company with respect to Ordinary Shares to a United States Holder will generally constitute dividends, which may be taxable as ordinary income or "qualified dividend income" as described in more detail below, to the extent of the Company's current or accumulated earnings and profits, as determined under United States federal income tax principles.  Distributions in excess of the Company's earnings and profits will be treated first as a non-taxable return of capital to the extent of the United States Holder's tax basis in his Ordinary Shares on a dollar-for-dollar basis and thereafter as capital gain.  Because the Company is not a United States corporation, United States Holders that are corporations will not be entitled to claim a dividends-received deduction with respect to any distributions they receive from the Company.

67

Dividends paid on Ordinary Shares to a United States Holder which is an individual, trust or estate (a "United States Non-Corporate Holder") will generally be treated as "qualified dividend income" that is taxable to such shareholders at preferential United States federal income tax rates (currently through 2012) provided that (1) Ordinary Shares are readily tradable on an established securities market in the United States (such as the New York Stock Exchange on which the Ordinary Shares are listed); (2) the Company is not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (which the Company does not believe it is, has been or will be); and (3) the United States Non-Corporate Holder has owned the Ordinary Shares for more than 60 days in the 121-day period beginning 60 days before the date on which the Ordinary Shares become ex-dividend.

Legislation has been previously introduced in the United States Congress which, if enacted in its present form, would preclude the dividends paid by the Company from qualifying for such preferential rates prospectively from the date of the enactment. Any dividends paid by the Company which are not eligible for these preferential rates will be taxed as ordinary income to a United States Holder.

Sale, Exchange or other Disposition of Common Stock

Assuming the Company does not constitute a passive foreign investment company for any taxable year, a United States Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of the Company's Ordinary Shares in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the United States Holder's tax basis in the Ordinary Shares.  Such gain or loss will be treated as long-term capital gain or loss if the United States Holder's holding period in the Ordinary Shares is greater than one year at the time of the sale, exchange or other disposition.  A United States Holder's ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Status and Significant Tax Consequences

Special United States federal income tax rules apply to a United States Holder that holds stock in a foreign corporation classified as a passive foreign investment company, or a PFIC, for United States federal income tax purposes.  In general, the Company will be treated as a PFIC with respect to a United States Holder if, for any taxable year in which such United States Holder held the Company's Ordinary Shares, either;

· at least 75% of the Company's gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business), or

· at least 50% of the average value of the assets held by the Company during such taxable year produce, or are held for the production of, passive income.

For purposes of determining whether the Company is a PFIC, the Company will be treated as earning and owning its proportionate share of the income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25% of the value of the subsidiary's stock.  Income earned, or deemed earned, by the Company in connection with the performance of services would not constitute passive income.  By contrast, rental income would generally constitute "passive income" unless the Company is treated under specific rules as deriving its rental income in the active conduct of a trade or business.

Based on the Company's current operations and future projections, the Company does not believe that it is, nor does it expect to become, a PFIC with respect to any taxable year.  Although there is no legal authority directly on point, the Company's belief is based principally on the position that, for purposes of determining whether the Company is a PFIC, the gross income the Company derives or is deemed to derive from the time chartering and voyage chartering activities should constitute services income, rather than rental income.  Correspondingly, the Company believes that such income does not constitute passive income, and the assets that the Company or its wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, do not constitute assets that produce, or are held for the production of, passive income for purposes of determining whether the Company is a PFIC.

68

Although there is no direct legal authority under the PFIC rules, the Company believes there is substantial legal authority supporting its position consisting of case law and United States Internal Revenue Service, or the IRS, pronouncements concerning the characterization of income derived from time charters, bareboat charters and voyage charters as services income for other tax purposes.  However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, in the absence of any legal authority specifically relating to the Code provisions governing PFICs, the IRS or a court could disagree with our position.  In addition, although the Company intends to conduct its affairs in such a manner as to avoid being classified as a PFIC with respect to any taxable year, there can be no assurance that the nature of its operations will not change in the future.

As discussed more fully below, if the Company were to be treated as a PFIC for any taxable year, a United States Holder would be subject to different taxation rules depending on whether the United States Holder makes an election to treat the Company as a "Qualified Electing Fund," which the Company refers to as a "QEF election." As an alternative to making a QEF election, a United States Holder should be able to elect to mark-to-market the Company's Ordinary Shares, which the Company refers to as a "Mark-to-Market Election," as discussed below.

Taxation of United States Holders Making a Timely QEF Election

If a United States Holder makes a timely QEF election, which United States Holder is referred to by the Company as an "Electing United States Holder," the Electing United States Holder must report each year for United States federal income tax purposes its pro rata share of the Company's ordinary earnings and its net capital gain, if any, for the Company's taxable year that ends with or within the taxable year of the Electing United States Holder, regardless of whether or not distributions were received from the Company by the Electing United States Holder.  The Electing United States Holder's adjusted tax basis in the Ordinary Shares will be increased to reflect taxed but undistributed earnings and profits.  Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the Ordinary Shares and will not be taxed again once distributed.  An Electing United States Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the Ordinary Shares. A United States Holder will be eligible to make a QEF Election with respect to its Ordinary Shares only if the Company provides the United States Holder with annual tax information relating to the Company.  There can be no assurance that the Company will provide such tax information on an annual basis.

Taxation of United States Holders Making a "Mark-to-Market" Election

Alternatively, if the Company were to be treated as a PFIC for any taxable year and, as anticipated, the Ordinary Shares are treated as "marketable stock," a United States Holder would be allowed to make a Mark-to-Market Election with respect to the Company's Ordinary Shares.  If that election is made, the United States Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the Ordinary Shares at the end of the taxable year over such United States Holder's adjusted tax basis in the Ordinary Shares.  The United States Holder would also be permitted an ordinary loss in respect of the excess, if any, of the United States  Holder's adjusted tax basis in the Ordinary Shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the Mark-to-Market Election.  A United States Holder's tax basis in his Ordinary Shares would be adjusted to reflect any such income or loss amount.  Gain realized on the sale, exchange or other disposition of the Ordinary shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the Ordinary Shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the United States Holder.

Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election

Finally, if the Company were to be treated as a PFIC for any taxable year, a United States  Holder who does not make either a QEF election or a Mark-to-Market Election for that year, whom is referred to as a "Non-Electing United States Holder," would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing United States Holder on the Ordinary Shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing United States Holder in the three preceding taxable years, or, if shorter, the Non-Electing United States Holder's holding period for the Ordinary Shares), and (2) any gain realized on the sale, exchange or other disposition of the Ordinary Shares.  Under these special rules:

69

· the excess distribution or gain would be allocated ratably over the Non-Electing United States Holders' aggregate holding period for the Ordinary Shares;

· the amount allocated to the current taxable year and any taxable years before the Company became a PFIC would be taxed as ordinary income; and

· the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of the Ordinary Shares.  If a Non-Electing United States Holder who is an individual dies while owning the Ordinary Shares, the successor of such deceased Non-Electing United States Holder generally would not receive a step-up in tax basis with respect to such stock.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States to a holder of Ordinary Shares will be subject to information reporting requirements.  Such payments will also be subject to "backup withholding" if paid to a non-corporate United States Holder who:

· fails to provide an accurate taxpayer identification number;

· is notified by the IRS that he has failed to report all interest or dividends required to be shown on his United States federal income tax returns; or

· in certain circumstances, fails to comply with applicable certification requirements.

If a holder sells his Ordinary Shares to or through a United States office of a broker, the payment of the proceeds is subject to both United States information reporting and backup withholding unless the holder establishes an exemption.  If a holders sells his Ordinary Shares through a non-United States office of a non-United States broker and the sales proceeds are paid to the holder outside the United States then information reporting and backup withholding generally will not apply to that payment.  However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, including a payment made to a holder outside the United States, if the holder sells his Ordinary Shares through a non-United States  office of a broker that is a United States  person or has some other contacts with the United States.

Backup withholding is not an additional tax.  Rather, a tax payer generally may obtain a refund of any amounts withheld under backup withholding rules that exceed the taxpayer's income tax liability by filing a refund claim with the IRS.

Bermuda Taxation

As of the date of this document, we are not subject to taxation under the laws of Bermuda and distributions to us by our subsidiaries also are not subject to any Bermuda tax.   As of the date of this document, there is no Bermuda income, corporation or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by non-residents of Bermuda in respect of capital gains realized on a disposition of our common shares or in respect of distributions by us with respect to our common shares.   This does not, however, apply to the taxation of persons ordinarily resident in Bermuda.   Bermuda holders should consult their own tax advisors regarding possible Bermuda taxes with respect to dispositions of, and distributions on, our common shares.

70

The Minister of Finance in Bermuda has granted the Company a tax exempt status until March 28, 2016, under which no income taxes or other taxes (other than duty on goods imported into Bermuda and payroll tax in respect of any Bermuda-resident employees) are payable by the Company in Bermuda.   If the Minister of Finance in Bermuda does not grant a new exemption or extend the current tax exemption, and if the Bermudian Parliament passes legislation imposing taxes on exempted companies, the Company may become subject to taxation in Bermuda after March 28, 2016.

Currently, there are no withholding taxes payable in Bermuda on dividends distributed by the Company to its shareholders.

Liberian Taxation

The Republic of Liberia enacted a new income tax act effective as of January 1, 2001, or the New Act.  In contrast to the income tax law previously in effect since 1977, or the Prior Law, which the New Act repealed in its entirety, the New Act does not distinguish between the taxation of a non-resident Liberian corporation, such as the Company's Liberian subsidiaries, which conduct no business in Liberia and were wholly exempted from tax under the Prior Law, and the taxation of ordinary resident Liberian corporations.

In 2004, the Liberian Ministry of Finance issued regulations pursuant to which a non-resident domestic corporation engaged in international shipping, such as the Company's Liberian subsidiaries, will not be subject to tax under the New Act retroactive to January 1, 2001, or the New Regulations.  In addition, the Liberian Ministry of Justice issued an opinion that the New Regulations were a valid exercise of the regulatory authority of the Ministry of Finance.  Therefore, assuming that the New Regulations are valid, the Company's Liberian subsidiaries will be wholly exempt from Liberian income tax as under the Prior Law. In 2009, the Liberian Ministry of Finance adopted an Economic Stimulus Act to clarify the tax treatment of non-resident Liberian corporations. Although such Act was signed into law by the President of Liberia it was never formally published, which is a requirement to make it effective. We are still waiting advice from Liberia regarding publication of the 2009 Economic Stimulus Act.

If the Company's Liberian subsidiaries were subject to Liberian income tax under the New Act, the Company's Liberian subsidiaries would be subject to tax at a rate of 35% on their worldwide income.  As a result, their, and subsequently the Company's, net income and cash flow would be materially reduced by the amount of the applicable tax.  In addition, the Company, as shareholder of the Liberian subsidiaries, would be subject to Liberian withholding tax on dividends paid by the Liberian subsidiaries at rates ranging from 15% to 20%.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENT BY EXPERTS

Not applicable.

H. DOCUMENTS ON DISPLAY

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements, we file reports and other information with the Securities and Exchange Commission. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public reference facilities maintained by the Commission 100 F Street, N.E., Room 1580 Washington, D.C. 20549.  You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330, and you may obtain copies at prescribed rates from the public reference facilities maintained by the Commission at its principal office in Washington, D.C. 20549.  The SEC maintains a website (http://www.sec.gov.) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. In addition, documents referred to in this annual report may be inspected at our principal executive offices at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda HM 08.

I.  SUBSIDIARY INFORMATION

Not applicable.

71

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including interest rates, spot market rates for vessels and foreign currency fluctuations. We may enter into forward freight agreements and futures for trading purposes in order to manage our exposure to the risk of movements in the spot market for certain trade routes and, to some extent, for speculative purposes but currently we have not entered into any such agreements. We may also enter into other derivative instruments from time to time for speculative purposes but currently we have not entered into any such agreement.

Our exposure to interest rate risk relates to our floating rate debt, which totaled $834.7 million as of December 31, 2010 (2009: $558.1 million). A one per cent change in interest rates would increase or decrease interest expense by $8.3 million per year as of December 31, 2010.

As of December 31, 2010, the fair market value of our fixed rate debt was $505.5 million (2009: $313.6 million). If interest rates were to increase or decrease by one per cent with all other variables remaining constant, we estimate that the market value of our fixed rate debt would have decreased or increased by approximately $13.7 million and $14.7 million respectively (2009: decrease by $15.7 million and increase by $17.0 million).

The majority of our transactions, assets and liabilities are denominated in U.S. dollars, our functional currency. Certain of our subsidiaries report in Sterling or Norwegian Kroner and risks of two kinds arise as a result: a transaction risk, that is, the risk that currency fluctuations will have an effect on the value of our cash flows; and a translation risk, which is the impact of currency fluctuations in the translation of foreign operations and foreign assets and liabilities into U.S. dollars in our consolidated financial statements.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15.   CONTROLS AND PROCEDURES

a)   Disclosure Controls and Procedures

Management assessed the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934, as of the end of the period covered by this annual report as of December 31, 2010. Based upon that evaluation, the principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures are effective as of the evaluation date.

b)   Management's annual report on internal controls over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) promulgated under the Securities Exchange Act of 1934.

Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

72

· Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and

· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

Management conducted the evaluation of the effectiveness of the internal controls over financial reporting using the control criteria framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) published in its report entitled Internal Control-Integrated Framework.

Our management with the participation of our principal executive officer and principal financial officer assessed the effectiveness of the design and operation of the Company's internal controls over financial reporting pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as of December 31, 2010. Based upon that evaluation, the principal executive officer and principal financial officer concluded that the Company's internal controls over financial reporting are effective as of December 31, 2010.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2010 has been audited by PricewaterhouseCoopers AS., an independent registered public accounting firm, as stated in their report which appears herein.

c)   Attestation Report of Independent Registered Public Accounting Firm

The independent registered public accounting firm that audited the consolidated financial statements, PricewaterhouseCoopers AS, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as of December 31, 2010, appearing under Item 18, and such report is incorporated herein by reference.

d)   Changes in internal control over financial reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report that have materially effected or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 16.     RESERVED

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Mrs. Kate Blankenship is an independent director and audit committee financial expert.

73

ITEM 16B.  CODE OF ETHICS

We have adopted a code of ethics that applies to all entities controlled by us and all employees, directors, officers and agents of the Company. We have posted a copy of our code of ethics on our website at www.frontline.bm. We will provide any person, free of charge, a copy of our code of ethics upon written request to our registered office.

ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountant for 2010 and 2009 was PricewaterhouseCoopers AS. The following table sets forth for the two most recent fiscal years the fees paid or accrued for audit and services provided by PricewaterhouseCoopers AS.

(in thousands of $)	2010		2009
Audit Fees (a)		1,020		1,457
Audit-Related Fees (b)		—		—
Tax Fees (c)		—		—
All Other Fees (d)		—		—
Total		1,020		1,457

(a)           Audit Fees

Audit fees represent professional services rendered for the audit of our annual financial statements and services provided by the principal accountant in connection with statutory and regulatory filings or engagements.

(b)           Audit–Related Fees

Audit-related fees consisted of assurance and related services rendered by the principal accountant related to the performance of the audit or review of our financial statements which have not been reported under Audit Fees above.

(c)           Tax Fees

Tax fees represent fees for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning.

(d)           All Other Fees

All other fees include services other than audit fees, audit-related fees and tax fees set forth above.

Our Board of Directors has adopted pre-approval policies and procedures in compliance with paragraph (c) (7)(i) of Rule 2-01 of Regulation S-X that require the Board to approve the appointment of the independent auditor of the Company before such auditor is engaged and approve each of the audit and non-audit related services to be provided by such auditor under such engagement by the Company. All services provided by the principal auditor in 2010 were approved by the Board pursuant to the pre-approval policy.

ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not applicable.

74

ITEM 16G. CORPORATE GOVERNANCE

Pursuant to an exception under the NYSE listing standards available to foreign private issuers, we are not required to comply with all of the corporate governance practices followed by U.S. companies under the NYSE listing standards. The significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies are set forth below:

· Executive Sessions.  The NYSErequires that non-management directors meet regularly in executive sessions without management. The NYSEalso requires that all independent directors meet in an executive session at least once a year. As permitted under Bermuda law and our bye-laws, our non-management directors do not regularly hold executive sessions without management and we do not expect them to do so in the future.

· Nominating/Corporate Governance Committee.  The NYSErequires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Bermuda law and our bye-laws, we do not currently have a nominating or corporate governance committee.

· Audit Committee.  The NYSErequires, among other things, that a listed U.S. company have an audit committee with a minimum of three members. As permitted by Rule 10A-3 under the Securities Exchange Act of 1934, our audit committee consists of one independent member of our Board.

· Corporate Governance Guidelines.  The NYSErequires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required to adopt such guidelines under Bermuda law and we have not adopted such guidelines.

75

PART III

ITEM 17.     FINANCIAL STATEMENTS

Not applicable.

ITEM 18.     FINANCIAL STATEMENTS

The following financial statements listed below and set forth on pages F-1 through F-31 are filed as part of this annual report:

Consolidated Financial Statements of Frontline Ltd.
Index to Consolidated Financial Statements of Frontline Ltd.	F-1
Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers AS	F-2
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008	F-3
Consolidated Balance Sheets as of December 31, 2010 and 2009	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008	F-5
Consolidated Statements of Changes in Equity for the years ended December 31, 2010, 2009 and 2008	F-6
Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008	F-7
Notes to Consolidated Financial Statements	F-8

76

ITEM 19.     EXHIBITS

Number	Description of Exhibit
1.1	Memorandum of Association of the Company, incorporated by reference to Exhibit 3.1 of the Company's Registration Statement on Form F-1, Registration No. 33-70158 filed on October 12, 1993 (the "Original Registration Statement").
1.2	Amended and Restated Bye-Laws of the Company as adopted by shareholders on September 28, 2007 incorporated by reference to Exhibit 1.2 of the Company's annual Report on form 20-F for the fiscal year ended December 31, 2007.
2.1	Form of Ordinary Share Certificate, incorporated by reference to Exhibit 4.1 of the Original Registration Statement.
2.2	Form of Deposit Agreement dated as of November 24, 1993, among Frontline Ltd. (F/K/A London & Overseas Freighters Limited), The Bank of New York as Depositary, and all Holders from time to time of American Depositary Receipts issued there under, including form of ADR, incorporated by reference to Exhibit 4.2 of the Original Registration Statement.
2.3	Form of Deposit Agreement dated as of November 24, 1993, as amended and restated as of May 29, 2001, among Frontline Ltd. (F/K/A London & Overseas Freighters Limited), The Bank of New York as Depositary, and all Holders from time to time of American Depositary Receipts issued there under, including form of ADR, incorporated by reference to Exhibit 2 of the Company's Annual Report on Form 20-F, filed on June 13, 2001 for the fiscal year ended December 31, 2000.
2.4	Amendment No. 1 to the Rights Agreement incorporated by reference to Exhibit 4.3 of the Amalgamation Registration Statement.
2.5	The Subregistrar Agreement related to the registration of certain securities issued by Frontline Ltd. in the Norwegian Registry of Securities between Frontline Ltd. and Christiania Bank og Kreditkasse ASA together with the Form of Warrant Certificate and Conditions attaching thereto, incorporated by reference to Exhibit 1.1 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 1998.
4.4	Master Agreement, dated September 22, 1999, among Frontline AB and Frontline Ltd (collectively "FL"), Acol Tankers Ltd. ("Tankers"), ICB Shipping AB ("ICB"), and Ola Lorentzon (the "Agent"), incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 1999.
4.6	Charter Ancillary Agreement between Frontline Ltd and Ship Finance International Limited dated January 1, 2004 incorporated by reference to Exhibit 10.2 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
4.7	Addendum to Charter Ancillary Agreement between Frontline Ltd and Ship Finance International Limited dated June 15, 2004 incorporated by reference to Exhibit 10.3 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
4.8	Form of Performance Guarantee issued by the Company incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
4.9	Form of Time Charter incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
4.10	Form of Vessel Management Agreements incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.

77

4.11	Administrative Services Agreement incorporated by reference to Exhibit 10.7 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
4.12	Contribution Agreement between Frontline Ltd and Golden Ocean Group Limited dated November 29, 2004 incorporated by reference to Exhibit 10.8 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2004.
4.13	Second Supplemental Purchase Agreement between Sealift Ltd., Southwest Tankers Inc., Front Target Inc., Front Traveller Inc., West Tankers Inc., Granite Shipping Ltd., Quadrant Marine Inc. and Frontline Ltd. dated April 27, 2007 incorporated by reference to Exhibit 4.13 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31,  2007.
4.14	Shareholder's Agreement Relating to Sealift Ltd dated April 27, 2007 incorporated by reference to Exhibit 4.14 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
4.15	Merger Agreement between Dockwise Limited and Sealift Ltd dated April 27, 2007 incorporated by reference to Exhibit 4.15 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
4.16	Frontline Ltd Share Option Scheme dated September 25, 2009.
4.17	Management Agreement between Ship Finance International Limited and its subsidiaries and Frontline Management (Bermuda) Ltd, dated November 29, 2007. (Replaces Administrative Services Agreement dated December 31, 2004) incorporated by reference to Exhibit 4.17 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
4.18	Addendum No. 3 to Charter Ancillary Agreement between Frontline Ltd, Ship Finance International Limited and Frontline Shipping Ltd, dated August 21, 2007 incorporated by reference to Exhibit 4.18 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.

4.19	Addendum No. 1 to Charter Ancillary Agreement between Frontline Ltd., Ship Finance International Limited and Frontline Shipping II Ltd., dated August 21, 2007 incorporated by reference to Exhibit 4.19 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2007.
4.20	Amended and Restated Gemini Suezmax Pool Agreement dated January 1, 2009 incorporated by reference to Exhibit 4.20 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2008.
4.21	Addendum No. 2 to Charter Ancillary Agreement between Frontline Ltd., Ship Finance International Limited and Frontline Shipping II Ltd., dated March 25, 2010.
8.1	Subsidiaries of the Company.
12.1	Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
12.2	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
13.1	Certification of the Principal Executive Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2	Certification of the Principal Financial Officer pursuant to 18 USC Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.	INS*	XBRL	Instance Dcoument
101.	SCH*	XBRL	Taxonomy Extension Schema
101.	CAL*	XBRL	Taxonomy Extension Schema Calculation Linkbase
101.	DEF*	XBRL	Taxonomy Extension Schema Definition Linkbase
101.	LAB*	XBRL	Taxonomy Extension Schema Label Linkbase
101.	PRE*	XBRL	Taxonomy Extension Schema Presentation Linkbase

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under such sections.

78

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Frontline Ltd.
	(Registrant)
Date: April 4, 2011	By:	/s/ Inger M. Klemp
	Name:	Inger M. Klemp
	Title:	Principal Financial Officer

79

Index to Consolidated Financial Statements of Frontline Ltd.

Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers AS	F-2
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008	F-3
Consolidated Balance Sheets as of December 31, 2010 and 2009	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008	F-5
Consolidated Statements of Changes in Equity for the years ended December 31, 2010, 2009 and 2008	F-6

Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008	F-7
Notes to Consolidated Financial Statements	F-8

 

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Frontline Ltd.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, consolidated statements of cash flows, consolidated statements of comprehensive income and consolidated statements of changes in equity present fairly, in all material respects, the financial position of Frontline Ltd. and its subsidiariesat December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three  years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under item 15(b) of Frontline Ltd.'s Annual Report on Form 20-F. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/PricewaterhouseCoopers AS

PricewaterhouseCoopers AS

Oslo, Norway

April 4, 2011

F-2

Frontline Ltd.

Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008

(in thousands of $, except per share data)

		2010			2009			2008
Operating revenues
Time charter revenues		365,159			486,361			602,980
Bareboat charter revenues		71,370			64,526			57,152
Voyage charter revenues		708,008			565,331			1,425,968
Other income		20,678			17,068			17,918
Total operating revenues		1,165,215			1,133,286			2,104,018
Gain on sale of assets and amortization of deferred gains		30,935			3,061			142,293
Operating expenses
Voyage expenses and commission		282,708			219,375			592,188
Ship operating expenses		195,679			206,381			213,766
Profit share expense		30,566			33,018			110,962
Charterhire expenses		134,551			169,503			220,170
Administrative expenses		31,883			30,647			35,226
Depreciation		212,851			237,313			223,519
Total operating expenses		888,238			896,237			1,395,831
Net operating income		307,912			240,110			850,480
Other income (expenses)
Interest income		13,432			22,969			41,204
Interest expense		(149,918	)		(160,988	)		(183,925	)
Equity losses of unconsolidated subsidiaries and associated companies		(515	)		(544	)		(901	)
Foreign currency exchange gain (loss)		622			(346	)		1,565
Mark to market of derivatives		(19	)		-			(17,399	)
Impairment of securities		(9,425	)		-			(25,134	)
Loss on sale of securities		-			-			(221	)
Dividends received, net		(278	)		3,087			1,552
Other non-operating items, net		2,411			1,545			34,043
Net other expenses		(143,690	)		(134,277	)		(149,216	)
Net income before income taxes and noncontrolling  interest		164,222			105,883			701,264
Income tax expense		(218	)		(361	)		(310	)
Net income		164,004			105,472			700,954
Net income attributable to noncontrolling interest		(2,597	)		(2,771	)		(2,184	)
Net income attributable to Frontline Ltd.		161,407			102,701			698,770
Earnings per share attributable to Frontline Ltd. stockholders:
Basic earnings per share	$	2.07		$	1.32		$	9.15
Diluted earnings per share	$	2.07		$	1.32		$	9.14
Weighted average shares outstanding, basic		77,859			77,859			76,353
Weighted average shares outstanding, diluted		78,034			77,867			76,442
Cash dividends per share declared	$	2.00		$	0.90		$	8.25

See accompanying Notes that are an integral part of these Consolidated Financial Statements

F-3

Frontline Ltd.

Consolidated Balance Sheets as of December 31, 2010 and 2009

(in thousands of $)

	2010			2009
ASSETS
Current Assets
Cash and cash equivalents		176,639			82,575
Restricted cash and investments		182,091			429,946
Marketable securities		51,481			62,920
Trade accounts receivable, net		56,316			44,598
Related party receivables		7,225			28,743
Other receivables		17,200			52,135
Inventories		60,115			35,093
Voyages in progress		27,087			32,358
Prepaid expenses and accrued income		8,073			14,675
Investment in finance lease		1,535			-
Other current assets		-			139
Total current assets		587,762			783,182
Long term assets
Restricted cash		62,000			70,075
Newbuildings		224,319			413,968
Vessels and equipment, net		1,430,124			678,694
Vessels and equipment under capital lease, net		1,427,526			1,740,666
Investment in unconsolidated subsidiaries and associated companies		3,408			3,923
Deferred charges		7,426			4,670
Long term investments		-			20,020
Investment in finance lease		55,355			-
Other long-term assets		-			20
Total assets		3,797,920			3,715,218
LIABILITIES AND  EQUITY
Current liabilities
Short-term debt and current portion of long-term debt		173,595			123,884
Current portion of obligations under capital leases		193,379			285,753
Related party payables		33,278			33,803
Trade accounts payable		13,423			36,574
Accrued expenses		72,200			65,579
Deferred charter revenue		6,860			15,442
Other current liabilities		10,842			44,327
Total current liabilities		503,577			605,362
Long-term liabilities
Long-term debt		1,190,763			760,698
Obligations under capital leases		1,336,908			1,579,708
Deferred gains on sales of vessels		6,440			12,649
Other long-term liabilities		1,195			6,053
Total liabilities		3,038,883			2,964,470
Commitments and contingencies
Stockholders' equity
Share capital (77,858,502 shares outstanding, par value $2.50)		194,646			194,646
Additional paid in capital		224,245			221,991
Contributed surplus		248,360			248,360
Accumulated other comprehensive loss		(3,836	)		(1,686	)
Retained earnings		83,718			78,029
Total stockholders' equity		747,133			741,340
Noncontrolling interest		11,904			9,408
Total equity		759,037			750,748
Total liabilities and  equity		3,797,920			3,715,218

See accompanying Notes that are an integral part of these Consolidated Financial Statements.

F-4

Frontline Ltd.

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008

(in thousands of $)

	2010			2009			2008
Net income		164,004			105,472			700,954
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		212,851			237,313			223,519
Amortization of deferred charges		1,436			1,282			550
Gain from sale of assets (including securities)		(30,935	)		(3,061	)		(160,031	)
Equity losses of unconsolidated subsidiaries and associated companies		515			544			901
Unrealized foreign exchange (gain) loss		(138	)		686			(2,172	)
Adjustment of derivatives and securities to market value		9,425			-			41,379
Other, net		(4,846	)		(2,612	)		2,223
Changes in operating assets and liabilities:
Trade accounts receivable		(7,777	)		15,689			(764	)
Other receivables		32,690			(33,441	)		11,746
Inventories		(25,021	)		7,131			13,212
Voyages in progress		5,271			25,673			2,447
Prepaid expenses and accrued income		6,543			(4,516	)		(1,683	)
Trade accounts payable		(23,149	)		9,541			10,990
Accrued expenses		6,786			(6,895	)		(12,852	)
Deferred charter revenue		(16,929	)		(3,382	)		3,432
Related party balances		(5,873	)		(30,658	)		(466	)
Other, net		(7,210	)		2,754			(6,582	)
Net cash provided by operating activities		317,643			321,520			826,803
Investing activities
Change in restricted cash		256,535			75,620			(2,579	)
Additions to newbuildings, vessels and equipment		(548,946	)		(170,049	)		(657,443	)
Proceeds from sale of vessels and equipment		11,061			2,390			128,264
Dividends received from associated companies		-			-			265
Receipts from finance leases and loans receivable		1,277			-			-
Purchases of other assets		-			-			(109,360	)
Proceeds from sale of other assets		19,839			-			3,286
Proceeds from issuance of shares in subsidiary		-			-			10,941
Proceeds from sale of shares in subsidiary		100			-			-
Net cash used in investing activities		(260,134	)		(92,039	)		(626,626	)
Financing activities
Proceeds from long-term debt		649,729			243,771			520,178
Repayments of long-term debt		(169,953	)		(267,336	)		(87,370	)
Payment of obligations under finance leases		(280,579	)		(241,198	)		(171,900	)
Debt fees paid		(4,192	)		(2,888	)		(4,928	)
Fees paid on early redemption of debt		(2,732	)		-			-
Net proceeds from share issuances		-			-			208,123
Cash dividends paid (including payments to noncontrolling interest)		(155,718	)		(70,074	)		(641,893	)
Net cash provided by (used in) financing activities		36,555			(337,725	)		(177,790	)
Net increase (decrease) in cash and cash equivalents		94,064			(108,244	)		22,387
Cash and cash equivalents at beginning of year		82,575			190,819			168,432
Cash and cash equivalents at end of year		176,639			82,575			190,819
Supplemental disclosure of cash flow information:
Interest paid, net of interest capitalized		165,951			186,873			202,840
Income taxes paid		563			383			372

See accompanying Notes that are an integral part of these Consolidated Financial Statements.

F-5

Frontline Ltd.

Consolidated Statements of Changes in Equity for the years ended December 31, 2010, 2009 and 2008

(in thousands of $, except number of shares)

	2010		2009		2008
NUMBER OF SHARES OUTSTANDING
Balance at beginning of year	77,858,502		77,858,502		74,825,169
Shares issued	-		-		3,033,333
Balance at the end of the year	77,858,502		77,858,502		77,858,502
SHARE CAPITAL
Balance at beginning of year	194,646		194,646		187,063
Shares issued	-		-		7,583
Balance at end of year	194,646		194,646		194,646
ADDITIONAL PAID IN CAPITAL
Balance at beginning of year	221,991		219,036		14,242
Shares issued	-		-		200,539
Stock option expense	2,053		2,955		4,255
Gain on sale of shares in subsidiary	201		-		-
Balance at end of year	224,245		221,991		219,036
CONTRIBUTED SURPLUS
Balance at beginning and end of year	248,360		248,360		248,360
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of year	(1,686	)	(5,227	)	(3,696	)
Other comprehensive (loss) income	(2,150	)	3,541		(1,531	)
Balance at end of year	(3,836	)	(1,686	)	(5,227	)
RETAINED EARNINGS
Balance at beginning of year	78,029		45,402		-
Net income	161,407		102,701		698,770
Cash dividends	(155,718	)	(70,074	)	(641,893	)
Stock dividends	-		-		(11,475	)
Balance at end of year	83,718		78,029		45,402
TOTAL  EQUITY ATTRIBUTABLE TO FRONTLINE LTD.	747,133		741,340		702,217
NONCONTROLLING INTEREST
Balance at beginning of year	9,408		6,637		-
Net income	2,597		2,771		2,184
Net liabilities assumed on purchase of noncontrolling interest	(101	)	-		-
Partial spin-off of ITCL	-		-		4,453
Balance at end of year	11,904		9,408		6,637
TOTAL  EQUITY	759,037		750,748		708,854

See accompanying Notes that are an integral part of these Consolidated Financial Statements

F-6

Frontline Ltd.

Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008

(in thousands of $)

	2010			2009		2008
COMPREHENSIVE INCOME, NET OF TAX
Net income		164,004			105,472		700,954
Unrealised (losses) gains from marketable securities		(2,013	)		2,782		(219	)
Foreign currency translation		(137	)		759		(1,312	)
Other comprehensive (loss) income, net of tax		(2,150	)		3,541		(1,531	)
Comprehensive Income		161,854			109,013		699,423
Comprehensive income attributable to stockholders of Frontline Ltd.		159,257			106,242		697,239
Comprehensive income attributable to noncontrolling interest		2,597			2,771		2,184
		161,854			109,013		699,423

See accompanying Notes that are an integral part of these Consolidated Financial Statements

F-7

Frontline Ltd.

Notes to the Consolidated Financial Statements

1. GENERAL

Frontline Ltd. (the "Company" or "Frontline") is a Bermuda-based shipping company incorporated in Bermuda as a Bermuda exempted company under the Bermuda Companies Law of 1981 on June 12, 1992. The Company is engaged primarily in the ownership and operation of oil tankers and oil/bulk/ore, or OBO, carriers, which are currently configured to carry dry cargo. The Company operates oil tankers of two sizes: VLCCs, which are between 200,000 and 320,000 dwt, and Suezmaxes, which are vessels between 120,000 and 170,000 dwt. The Company operates through subsidiaries and partnerships located in the Bahamas, Bermuda, the Cayman Islands, the Isle of Man, Liberia, Norway, the United Kingdom and Singapore. The Company is also involved in the charter, purchase and sale of vessels.

The Company's ordinary shares are listed on the New York Stock Exchange, the Oslo Stock Exchange and the London Stock Exchange.

In October 2003, the Company established Ship Finance International Limited ("Ship Finance") in Bermuda.  Through transactions executed in January 2004, the Company transferred to Ship Finance ownership of 46 vessel-owning entities each owning one vessel and its corresponding financing, and one entity owning an option to acquire a VLCC. The Company then leased these vessels back on long-term charters. Between May 2004 and March 2007, the Company distributed all of its shareholding in Ship Finance to its shareholders except for 73,383 shares, which represents 0.01% of Ship Finance's total shares.

In January 2007, the Company's wholly owned subsidiary Sealift Ltd ("Sealift") completed a private placement raising $180.0 million in equity. The Company participated by investing $60.0 million and as a result of the private placement, its shareholding was reduced to 33.3%. The Company consequently began accounting for its investment under the equity method. Sealift used the proceeds from the private placement along with the proceeds from a $110.0 million bond facility, $120.0 million of a $240.0 million term loan facility and short-term sellers credit of $80 million from the Company, to acquire from the Company four single hull vessels to be converted to heavy lift vessels and two Suezmax vessels. The private placement discussed above was conditional on the acquisition of the assets described above being effective and the sellers credit was payable to the Company upon the completion and delivery of each of the last two converted vessels with $40 million allocated to each vessel. In May 2007, Sealift acquired Dockwise Ltd ("Dockwise") and immediately completed another private placement for 39.8 million shares, of which the Company subscribed for five million shares. The Company's investment was reduced to 17.1% as a result of these transactions. In July 2007, Sealift changed its name to Dockwise. In October 2007, the Company sold its entire shareholding in Dockwise.

In February 2008, the Company spun off 17.53% of its holding in its subsidiary Independent Tankers Corporation Limited ("ITCL") to Frontline shareholders in conjunction with the listing of ITCL on the Norwegian over-the-counter ("OTC") market. Frontline recorded a gain of $18.0 million in the first quarter of 2008 as a result of this spin off. This was reported in other non-operating items.

In August 2010, the Company sold 25% of SeaTeam Singapore Pte Limited to Golden Ocean Group Limited for $0.1 million and recognized a gain on sale of $0.2 million in the statement of equity.

2. ACCOUNTING POLICIES

Basis of accounting

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the assets and liabilities of the Company and its subsidiaries and certain variable interest entities in which the Company is deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation.

A variable interest entity is defined in Accounting Standards Codification ("ASC") Topic 810 "Consolidation" ("ASC 810") as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either i) the power to direct the activities of the entity that most significantly impact on its economic success, ii) the obligation to absorb the expected losses of the entity, or iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

F-8

ASC 810 requires a variable interest entity to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity's economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity.

We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we fully consolidate the entity.

The Company accounts for all business combinations by the purchase method in accordance with Financial Accounting Standard No. 141(R), Business Combinations (codified in ASC 805). The Company assesses whether it has purchased a business or a group of assets, in accordance with Emerging Issues Task Force ("EITF") 98-3: Determining Whether a Transaction Is an Exchange of Similar Productive Assets or a Business Combination. The Company ascertains the cost of the asset (or net asset) group and allocates that cost to the individual assets (or individual assets and liabilities) that make up the group in accordance with this guidance.  A portion of the cost of the group of assets is then assigned to each individual asset (or assets) acquired on the basis of its fair value.

Investments in companies over which the Company exercises significant influence but does not control are accounted for using the equity method. The Company records its investments in equity-method investees in the consolidated balance sheets as "Investment in unconsolidated subsidiaries and associated companies" and its share of the investees' earnings or losses in the consolidated statements of operations as "Share in results of unconsolidated subsidiaries and associated companies". The excess, if any, of purchase price over book value of the Company's investments in equity method investees is included in the accompanying consolidated balance sheets in "Investment in unconsolidated subsidiaries and associated companies".

Investments in which the Company has a majority shareholding but which it does not control, due to the participating rights of minority shareholders, are accounted for using the equity method.

The preparation of financial statements in accordance with generally accepted accounting principles requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

For the purposes of the consolidated statements of cash flows, all demand and time deposits and highly liquid, low risk investments with original maturities of three months or less are considered equivalent to cash.

Restricted cash and investments

Restricted cash consists of bank deposits which may only be used to settle certain pre-arranged loan or lease payments, minimum deposits, and management fees which must be maintained in accordance with contractual arrangements.

Restricted investments consists of deposits in guaranteed investment contracts, which must be maintained in accordance with contractual arrangements and may only be used to pay principal and interest on the Company's debt and management fees. The guaranteed investment contracts are considered to be investments held to maturity and as such are stated at cost plus accrued interest. When a contract is terminated by the Company, a market value adjustment is added to the value of the investment at the termination date.

Restricted cash is classified as long-term when it is intended for the liquidation of long-term obligations.

Marketable securities

Marketable equity securities held by the Company are considered to be available-for-sale securities and as such are carried at fair value. Any resulting unrealized gains and losses, net of deferred taxes if any, are recorded as a separate component of other comprehensive income in equity unless the securities are considered to be other than temporarily impaired, in which case unrealized losses are recorded in the income statement.

F-9

Long-term investments

Long-term investments consist of unlisted securities for which fair values are not readily determinable and for which the investments are not equity method investees. Long-term investments are recorded at cost less impairment.

Inventories

Inventories comprise principally of fuel and lubricating oils and are stated at the lower of cost and market value. Cost is determined on a first-in, first-out basis.

Vessels and equipment

The cost of the vessels less estimated residual value is depreciated on a straight-line basis over the vessels' estimated remaining economic useful lives. The estimated economic useful life of the Company's double hull vessels is 25 years and for single hull vessels is either 25 years or the vessel's anniversary date in 2015, whichever comes first. Other equipment is depreciated over its estimated remaining useful life, which approximates five years.

Vessels and equipment under capital lease

The Company charters in certain vessels and equipment under leasing agreements. Leases of vessels and equipment, where the Company has substantially all the risks and rewards of ownership, are classified as capital leases. Capital leases are capitalized at the inception of the lease at the lower of the fair value of the leased assets and the present value of the minimum lease payments.

Each lease payment is allocated between liability and finance charges to achieve a constant rate on the capital balance outstanding. The interest element of the capital cost is charged to the income statement over the lease period.

Depreciation of vessels and equipment under capital lease is included within "depreciation and amortization expense" in the consolidated statement of operations. Vessels and equipment under capital lease are depreciated on a straight-line basis over the vessels' remaining economic useful lives or on a straight-line basis over the term of the lease. The method applied is determined by the criteria by which the lease has been assessed to be a capital lease.

Vessel residual values – owned vessels and vessels under capital leases

On July 1, 2009, the Company effected a change in estimate related to the estimated scrap rate for all of its owned vessels and for leased vessels where the Company has an interest in the residual value. The scrap rate was amended from an average of $222 per lightweight ton to $281 per lightweight ton for VLCC's and from an average of $378 per lightweight ton to $281 per lightweight ton for Suezmaxes. The resulting change in salvage values has been applied prospectively and reduced depreciation by approximately $0.1 million for the six months ended December 31, 2009. This change also resulted in an increase in net income of approximately $0.1 million with no impact in earnings per share for the year ended December 31, 2009.

Newbuildings

The carrying value of the vessels under construction ("Newbuildings") represents the accumulated costs to the balance sheet date which the Company has had to pay by way of purchase installments and other capital expenditures together with capitalized interest and associated finance costs. No charge for depreciation is made until the vessel is available for use.

Interest expense

Interest costs are expensed as incurred except for interest costs that are capitalized. Interest is capitalized on all qualifying assets that require a period of time to get them ready for their intended use. Qualifying assets consist of vessels constructed for the Company's own use.

Impairment of long-lived assets

The carrying value of long-lived assets that are held and used by the Company are reviewed whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. The Company assesses recoverability of the carrying value of the asset by estimating the future net cash flows expected to result from the asset, including eventual disposal. If the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value.

F-10

In addition, long-lived assets to be disposed of are reported at the lower of carrying amount and fair value less estimated costs to sell.

Deferred charges

Loan costs, including debt arrangement fees, are capitalized and amortized on a straight-line basis over the term of the relevant loan. The straight line basis of amortization approximates the effective interest method in the Company's consolidated statement of operations. Amortization of loan costs is included in interest expense.  If a loan is repaid early, any unamortized portion of the related deferred charges is charged against income in the period in which the loan is repaid.

Trade accounts receivable

Trade and other receivables are presented net of allowances for doubtful balances. If amounts become uncollectible, they are charged against income when that determination is made.

Revenue and expense recognition

Revenues and expenses are recognized on the accruals basis. Revenues are generated from freight billings, time charter and bareboat charter hires. Voyage revenues and expenses are recognized ratably over the estimated length of each voyage and, therefore, are allocated between reporting periods based on the relative transit time in each period. The impact of recognizing voyage expenses ratably over the length of each voyage is not materially different on a quarterly and annual basis from a method of recognizing such costs as incurred. Probable losses on voyages are provided for in full at the time such losses can be estimated. Time charter and bareboat charter revenues are recorded over the term of the charter as a service is provided. The Company uses a discharge-to-discharge basis in determining percentage of completion for all spot voyages and voyages servicing contracts of affreightment whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. However, the Company does not recognize revenue if a charter has not been contractually committed to by a customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage.

Amounts receivable or payable arising from profit sharing arrangements are accrued based on amounts earned as of the reporting date. Profit share income represents vessel earnings earned by the Company's customers in excess of market rates. Profit share expense represents amounts due to Ship Finance based on 20% of the excess of vessel revenues earned by the Company over the base hire paid to Ship Finance for chartering in the vessels.

Revenues and voyage expenses of the vessels operating in pool arrangements are pooled and the resulting net pool revenues, calculated on a time charter equivalent basis, are allocated to the pool participants according to an agreed formula.  Formulae used to allocate net pool revenues vary among different pools but generally allocate revenues to pool participants on the basis of the number of days a vessel operates in the pool with weighting adjustments made to reflect vessels' differing capacities and performance capabilities. The same revenue and expense principles stated above are applied in determining the pool's net pool revenues. Certain pools are responsible for paying voyage expenses and distribute net pool revenues to the participants. Certain pools require the participants to pay and account for voyage expenses, and distribute gross pool revenues to the participants such that the participants' resulting net pool revenues are equal to net pool revenues calculated according to the agreed formula.  Revenues allocated by these pools are included in voyage charter revenues in the consolidated statements of operations.

Gain on sale of assets and amortization of deferred gains

Gain on sale of assets and amortization of deferred gains includes gains from the sale of vessels, gains from the termination of leases, gains from the sale of heavy lift conversions and the amortization of deferred gains. Gains from the sale of assets are recognized when the vessel has been delivered and all risks have been transferred and are determined by comparing the proceeds received with the carrying value of the vessel. Gains from the termination of leases are recognized when the lease is effectively terminated and the vessel has been redelivered to the owner. Gains from the sale of heavy lift conversions are recognized as each converted vessel is delivered. The amount recognized is the gain allocated to each vessel that is not contingent upon future events. Deferred gains are recorded as Current or Long-term Liabilities as applicable.

Drydocking

Normal vessel repair and maintenance costs are expensed when incurred. The Company recognizes the cost of a drydocking at the time the drydocking takes place, that is, it applies the "expense as incurred" method.

F-11

Derivatives

The fair values of the forward freight contracts, which are entered into for speculative purposes are recognized as assets or liabilities with changes in fair values recognized in "mark to market of derivatives" in the consolidated statements of operations.

Financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. For the majority of financial instruments, including most derivatives and long-term debt, standard market conventions and techniques such as options pricing models are used to determine fair value. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.

Foreign currencies

The functional currency of the Company and the majority of its subsidiaries is the U.S. dollar as the majority of revenues and expenditures are denominated in U.S. dollars. The Company's reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, the Company uses the current method of translation whereby the statements of operations are translated using the average exchange rate and the assets and liabilities are translated using the year end exchange rate. Foreign currency translation gains or losses are recorded as a separate component of other comprehensive income in equity.

Transactions in foreign currencies during the year are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency monetary assets and liabilities are translated using rates of exchange at the balance sheet date. Foreign currency non-monetary assets and liabilities are translated using historical rates of exchange. Foreign currency transaction gains or losses are included in the consolidated statements of operations.

Share-based payments

The Company accounts for share based payments in accordance with SFAS 123(R) Share-Based Payments ("FAS 123(R)")(codified in ASC 718). Accordingly, the Company expenses the fair value of stock options issued to employees over the period in which the options vest.

Earnings per share

Basic earnings per share ("EPS") is computed based on the income available to common stockholders and the weighted average number of shares outstanding for basic EPS. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments.

Issuance of shares by a subsidiary/ associate

The Company recognizes a profit when its subsidiary or associate issues stock to third parties at a price per share in excess of its carrying amount if such profit is realizable.  If such profit is not realizable, it is recorded as an increase to contributed surplus.  Following the issuance of FAS 141(R), (codified in ASC 805), applied prospectively from January 1, 2009, the effect of changes in ownership interest arising on consolidated subsidiaries are treated as equity transactions. Only gains or losses arising on deconsolidation will be recognized in the consolidated statements of operations.

Investment in Capital Leases

For capital leases that are sales-type leases, the difference between the gross investment in the lease and the sum of the present values of the two components of the gross investment is recorded as unearned lease interest income. The discount rate used in determining the present values is the interest rate implicit in the lease. The present value of the minimum lease payments, computed using the interest rate implicit in the lease, is recorded as the sales price, from which the carrying value of the vessel at the commencement of the lease is deducted in order to determine the profit or loss on sale. The unearned lease interest income is amortized to income over the period of the lease so as to produce a constant periodic rate of return on the net investment in the lease.

Convertible debt

Convertible bond loans issued by the Company include both a loan component (host contract) and an option to convert the loan to shares (embedded derivative).

F-12

An embedded derivative, such as a conversion option, may be separated from its host contract and accounted for separately if certain criteria are met including if the contract that embodies both the embedded derivative and the host contract is not measured at fair value, the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract and if a separate instrument with the same terms as the embedded instrument would be a derivative.

If an embedded derivative instrument is separated from its host contract, the host contract shall be accounted for based on generally accepted accounting principles applicable to instruments of that type which do not contain embedded derivative instruments.

3. RECENT ACCOUNTING PRONOUNCEMENTS

In January 2010, the FASB issued authoritative guidance that changes the disclosure requirements for fair value measurements. Specifically, the changes require a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. The changes also clarify existing disclosure requirements related to how assets and liabilities should be grouped by class and valuation techniques used for recurring and nonrecurring fair value measurements. We adopted the guidance in the first quarter 2010, which did not have an impact on our consolidated financial statements.

In January 2010 the FASB issued authoritative guidance in order to eliminate diversity in the way different companies reflect new shares issued as part of a distribution in their calculation of earnings per share. The provisions of this new guidance are effective on a retrospective basis and their adoption had no impact on the Company's reported earnings per share.

In January 2010, the FASB issued authoritative guidance to amend the accounting and reporting requirements for decreases in ownership of a subsidiary. This guidance requires that a decrease in the ownership interest of a subsidiary that does not result in a change of control be treated as an equity transaction. The guidance also expands the disclosure requirements about the deconsolidation of a subsidiary. The Company adopted this guidance in the first quarter of 2010 and it did not have a material impact on its consolidated financial statements.

In February 2010, the FASB amended guidance on subsequent events to alleviate potential conflicts between FASB guidance and SEC requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted these new requirements in the first quarter 2010. The adoption of this guidance did not have an impact on our financial statements.

In July 2010, the FASB issued authoritative guidance which requires expanded disclosures about the credit quality of an entity's financing receivables and its allowance for credit losses on a disaggregated basis. The adoption of this guidance by the Company with effect from 1 January 2010 did not have any effect on its consolidated financial statements.

4. SEGMENT INFORMATION

The Company and the chief operating decision maker ("CODM") measure performance based on the Company's overall return to shareholders based on consolidated net income. The CODM does not review a measure of operating result at a lower level than the consolidated group. Consequently, the Company has only one reportable segment: tankers. The tankers segment includes crude oil tanker vessels and OBO or oil/bulk/ore vessels. Both types of vessel are managed as part of this one segment.

The Company's management does not evaluate performance by geographical region as this information is not meaningful.

The Company operates in two markets. We operate in the tanker and drybulk carrier markets as an international provider of seaborne transportation of crude oil and drybulk cargoes. An analysis of revenues from these services is as follows:

(in thousands of $)	2010	2009	2008
Total operating revenues – tanker market	1,023,733	989,773	1,955,427
Total operating revenues – drybulk carrier market	136,912	124,983	130,228

F-13

During the year ended December 31, 2010, the Company reported total revenue from one customer of $244.4 million, which represented approximately 21% of consolidated operating revenues (2009: one customer, which represented approximately 22% and 2008: one customer, which represented approximately 20%). This was the same customer in each year. No other customers represent more than 10% of consolidated operating revenues for the periods presented.

5. INCOME TAXES

Bermuda

Under current Bermuda law, the Company is not required to pay taxes in Bermuda on either income or capital gains. The Company has received written assurance from the Minister of Finance in Bermuda that, in the event of any such taxes being imposed, the Company will be exempted from taxation until the year 2016.

United States

The Company does not accrue U.S. income taxes as the Company is not engaged in a U.S. trade or business and is exempted from a gross basis tax under Section 883 of the U.S. Internal Revenue Code.

A reconciliation between the income tax expense resulting from applying the U.S. Federal statutory income tax rate and the reported income tax expense has not been presented herein as it would not provide additional useful information to users of the financial statements as the Company's net income is subject to neither Bermuda nor U.S. tax.

Other Jurisdictions

Certain of the Company's subsidiaries in Singapore, Norway, India and the United Kingdom are subject to income tax in their respective jurisdictions. The tax paid by subsidiaries of the Company that are subject to income tax is not material.

The Company does not have any unrecognized tax benefits, material accrued interest or penalties relating to income taxes.

6. EARNINGS PER SHARE

The computation of basic EPS is based on the weighted average number of shares outstanding during the year and net income attributable to Frontline Ltd. The computation of diluted EPS assumes the exercise of stock options using the treasury stock method. The components of the denominator for the calculation of basic EPS and diluted EPS are as follows:

(in thousands)	2010	2009	2008
Weighted average number of ordinary shares outstanding - basic	77,859	77,859	76,353
Stock options	175	8	89
Weighted average number of ordinary shares outstanding – diluted	78,034	77,867	76,442

The convertible bonds were anti-dilutive at the year end as the conversion price is higher than the share price.

7. LEASES

As of December 31, 2010, the Company leased in 41 vessels on long-term time charters and bareboat charters from third parties and related parties.  Four of these long-term time charters and bareboat charters are classified as operating and 37 as capital leases. In addition, a further eight vessels are leased on short-term fixed rate charters, which are classified as operating leases. With the exception of the Company's long-term leases with Ship Finance, the Company's long-term leases of vessels generally contain optional renewal periods and purchase and put options.

Rental expense

Charter hire payments to third parties for certain contracted-in vessels are accounted for as operating leases. The Company is also committed to make rental payments under operating leases for office premises. The future minimum rental payments under the Company's non-cancellable operating leases are as follows:

F-14

(in thousands of $)
Year ending December 31,
2011	69,301
2012	19,593
2013	1,807
2014	1,601
2015	1,428
Thereafter	-
Total minimum lease payments	93,730

Total rental expense for operating leases was $136.8 million, $171.5 million and $222.2 million for the years ended December 31, 2010, 2009 and 2008, respectively.

The following table discloses information about the terms of the Company's long-term leases for vessels contracted in which are accounted for as operating leases at December 31, 2010:

Vessel Type	Expiry of Mandatory Lease Period	Extended Lease Periods at Lessor's Option	Extended Lease Periods at Company's Option	Company's Purchase Option Periods	Lessor's Put Option Exercise Date
Front Warrior (Suezmax)	2007	2008-2011	2010-2011	2007-2011	2011
Hampstead (VLCC)	2012	none	none	none	none
Kensington (VLCC)	2011	none	none	none	none
Desh Ujaala (VLCC)	2011	none	2012	none	none

The lease for Front Warrior was extended for an additional two years at the lessor's option on January 1, 2008. The lease for Front Warrior was extended for a further two year period (2010-11) at the Company's option on December 31, 2008. The minimum lease payments for this optional period have been included in the analysis above. On January 18, 2011 the lease for the Desh Ujaala terminated and the vessel was redelivered and the Company's option to extend the lease to 2012 was not exercised.

A liability for put options on vessels leased on operating leases is recorded at such time that market conditions make it likely that a put option will be exercised on the exercise date.  A liability is recognized based on the amount, if any, by which the put option price exceeds the fair market value of the related vessel. As of December 31, 2010, no such liability had arisen.

Nine of the vessels leased by the Company are leased from special purpose lessor entities which were established and are owned by independent third parties who provide financing through debt and equity participation. Each entity owns one vessel, which is leased to the Company, and has no other activities.  Prior to the adoption of FIN 46(R) (codified in ASC 810), these special purpose entities were not consolidated by the Company. Four of these leases are accounted for as operating leases and five of these leases are accounted for as capital leases.  The Company has determined that due to the existence of certain put and call options over the leased vessels, these entities are variable interest entities.  The determination of the primary beneficiary of a variable interest entity requires knowledge of the participations in the equity of that entity by individual and related equity holders.  Our lease agreements with the leasing entities do not give us any right to obtain this information and the Company has been unable to obtain this information by other means.  Accordingly the Company is unable to determine the primary beneficiary of these leasing entities. As of December 31, 2010, the original cost to the lessor of the assets under such arrangements was $383.0 million (2009: $383.0 million). As of December 31, 2010 and 2009, the Company's residual value guarantees associated with these leases, which represent the maximum exposure to loss, are $55.0 million.

The following table discloses information about the Company's activity with these non-consolidated lessor entities in the three year period ended December 31, 2010:

(in thousands of $)	2010	2009		2008
Repayments of principal obligations under capital leases	20,579		35,215		32,599
Interest expense for capital leases	14,862		27,202		29,807
Charterhire expense for operating leases	37,471		5,963		6,064

F-15

Rental income

The minimum future revenues to be received on time and bareboat charters which are accounted for as operating leases and other contractually committed income as of December 31, 2010 are as follows:

(in thousands of $)
2011	254,057
2012	148,338
2013	73,725
2014	18,881
2015	11,487
Thereafter	-
Total minimum lease revenues	506,488

The cost and accumulated depreciation of the vessels leased to third parties as of December 31, 2010 were approximately $1,814.3 million and $526.9 million, respectively, and as of December 31, 2009 were approximately $2,066.1 million and $704.3 million, respectively. None of the vessels currently leased to third parties are leased in on operating leases by the Company.

As of December 31, 2010, the Company leased out 34 of its vessels to third parties on time and bareboat charters with initial periods ranging between four months and eleven years. 33 of those leases are classified as operating leases and one is classified as an investment in finance lease.

Investment in sales type lease

As of December 31, 2010, one of the Company's vessels was accounted for as a sales-type lease (2009: nil). The following lists the components of the investments in sales-type lease as at December 31, 2010.

(in thousands of $)	2010			2009
Net minimum lease payments receivable		112,404			-
Estimated residual values of leased property (unguaranteed)		20,320			-
Less: unearned income		(75,834	)		-
Total investment in sales-type lease		56,890			-
Current portion		1,535			-
Long-term portion		55,355			-
		56,890			-

The minimum future gross revenues to be received under the Company's non-cancellable sales-type lease as of December 31, 2010 are as follows:

(in thousands of $)
2011	11,307
2012	11,338
2013	11,307
2014	11,307
2015	11,307
Thereafter	55,838
Total minimum lease revenues	112,404

The counterparty to the lease is a state-owned oil company which the Company has deemed to have a low credit risk.

F-16

8. MARKETABLE SECURITIES

Marketable securities held by the Company are equity securities considered to be available-for-sale securities.

(in thousands of $)	2010			2009
Cost		85,815			85,815
Accumulated other-than-temporary impairment		(34,560	)		(25,134	)
Accumulated net unrealized gain		226			2,239
Fair value		51,481			62,920

An other-than-temporary impairment was recorded against securities held in Overseas Shipholding Group Inc. ("OSG") and the shares were written down to fair value of $49.9 million as of December 31, 2010 resulting in an impairment loss of $9.4 million. This other-than-temporary impairment was recorded in "Impairment of securities". Losses of $2.6 million have been reclassified out of accumulated other comprehensive income into earnings in the period in relation to these securities. Net unrealized gain on marketable securities included in comprehensive income is $0.2 million (2009: $2.2 million).

(in thousands of $)	2010		2009		2008
Proceeds from sale of available-for-sale securities		-		-		3,286
Realized loss		-		-		(221	)

The cost of sale of available-for-sale marketable securities is calculated on an average cost basis. Realized gains and losses are recorded as gain on sale of securities in the consolidated statement of operations.

 9. TRADE ACCOUNTS RECEIVABLE, NET

Trade accounts receivable are presented net of allowances for doubtful accounts relating to freight and demurrage claims amounting to $1.1 million and $2.1 million as of December 31, 2010 and 2009, respectively.

10. OTHER RECEIVABLES

(in thousands of $)	2010		2009
Agent receivables		1,585		3,074
Claims receivables		6,248		6,740
Deposit for newbuilding installment		-		27,986
Other receivables		9,367		14,335
		17,200		52,135

Other receivables are presented net of allowances for doubtful accounts amounting to $nil and $nil as of December 31, 2010 and 2009 respectively.

11. LONG-TERM INVESTMENTS

Long term investments at December 31, 2009, comprised preference and ordinary shares in Navig8 Limited ("Navig8") at cost. The Company disposed of this investment, which represented 15.8% voting interest in Navig8, during 2010. The Company recognized a loss on disposal of $0.18 million in 'Other operating items, net' in the statement of operations.

12. NEWBUILDINGS

The carrying value of newbuildings represents the accumulated costs which the Company has paid by way of purchase installments and other capital expenditures together with capitalized loan interest.  Interest capitalized in the cost of newbuildings amounted to $14.7 million in 2010 (2009: $22.7 million, 2008: $18.0 million).

As of December 31, 2010, there were seven newbuilding contracts representing costs of $224.3 million. During 2010 six contracts were completed. Four Suezmax vessels were delivered during 2010 – the Northia on January 5 at a cost of $67.8 million,  the Naticina on March 9 at a  cost of $67.3 million, the Front Odin on May 5 at a cost of $68.0 million and the Front Njord on August 12 at a cost of $67.3 million. Two VLCCs were delivered during 2010 - the Front Cecilie on June 10 at a cost of $114.2 million and the Front Signe on August 9 at a cost of $114.6 million. As of December 31, 2009 there were ten newbuilding contracts representing costs of $414.0 million.

F-17

13. VESSELS AND EQUIPMENT, NET

(in thousands of $)	2010			2009
Cost		1,608,840			799,023
Accumulated depreciation		(178,716	)		(120,329	)
Net book value at end of year		1,430,124			678,694

Included in the above amounts as of December 31, 2010 and 2009 is equipment with a net book value of $2.2 million and $2.4 million, respectively.

During 2010, the Company took delivery of two VLCC double hull and four Suezmax double hull newbuildings at a cost of $228.8 million and $270.4 million, respectively, and purchased two secondhand VLCC double hull vessels at a cost of $207.3 million. A further two VLCC double hull vessels were purchased, which were previously accounted for as vessels under capital lease.

During 2009, the Company took delivery of two VLCC double hull newbuildings at a cost of $220.6 million and purchased a secondhand VLCC double hull vessel, which was previously accounted for as a vessel under capital lease.

Depreciation expense for vessels and equipment was $60.1 million, $38.8 million and $17.1 million for the years ended December 31, 2010, 2009 and 2008, respectively.

14. VESSELS UNDER CAPITAL LEASE, NET

(in thousands of $)	2010			2009
Cost		2,314,915			2,763,382
Accumulated depreciation		(887,389	)		(1,022,716	)
Net book value at end of year		1,427,526			1,740,666

Depreciation expense for vessels under capital lease was $152.8 million, $198.5 million and $206.4 million for the years ended December 31, 2010, 2009 and 2008, respectively.

The outstanding obligations under capital leases are payable as follows:

(in thousands of $)
Year ending December 31,
2011	291,292
2012	210,794
2013	208,062
2014	206,105
2015	237,049
Thereafter	947,994
Minimum lease payments	2,101,296
Less: imputed interest	(571,009	)
Present value of obligations under capital leases	1,530,287

As of December 31, 2010, the Company held 37 vessels under capital leases (2009 – 46 vessels), of which 31 (2009: 38 vessels) are leased from Ship Finance. These leases are for initial terms that range from 8 to 22 years. The remaining periods on these leases at December 31, 2010 range from 0.5 to 16 years.

The Company has purchase options over five of these vessels at certain specified dates and the lessor has options to put these vessels to the Company at the end of the lease term. Gains arising from the sale and leaseback transactions have been deferred and are being amortized over the lease terms.

F-18

On January 15, 2010, the lease agreement between Caernarfon Shipping Plc, a subsidiary of ITCL, and Dresdner Kleinwort Leasing was terminated and the outstanding lease obligation of $71.6 million was settled in full using restricted cash. The vessel was sold to another subsidiary of ITCL and was, therefore, transferred from leased to owned vessels at net book value.

On July 15, 2010, the lease agreement between Sandringham Shipping Plc, a subsidiary of ITCL, and Dresdner Kleinwort Leasing was terminated and the outstanding lease obligation of $67.0 million was settled in full using restricted cash. The vessel was sold to another subsidiary of ITCL and was, therefore, transferred from leased to owned vessels at net book value.

The following table discloses information about the terms of the Company's capital leases for vessels as of December 31, 2010 excluding those leased from Ship Finance:

Vessel Type	Expiry of Mandatory Lease Period	Extended Lease Periods at Lessor's Option	Company's Purchase Option Periods	Lessor's Put Option Exercise Date
Front Eagle (VLCC)	2013	2014-2015	2010 to 2015	2015
Front Melody (Suezmax)	2013	2014-2015	2011 to 2015	2015
Front Symphony (Suezmax)	2013	2014-2015	2011 to 2015	2015
Front Tina (VLCC)	2013	2014-2015	2011 to 2015	2015
Front Commodore (VLCC)	2013	2014-2015	2011 to 2015	2015
British Pride (VLCC)	2011	none	note (1)(2)	none

Put options on vessels leased under leases classified as capital leases are recorded as part of the lease's minimum lease payments.  Lease liabilities are amortized so that the remaining balance at the date the put option becomes exercisable is equal to the put option amount.  An additional liability is recognized based on the amount, if any, by which the put option price exceeds the fair market value of the related vessel. As of December 31, 2010 no such additional liability had arisen.

(1) The Company does not have an option to purchase the vessel but it has first refusal if the vessel's owner offers the vessel for sale.

(2) The lessor has the right to terminate the lease for the British Pride at the end of the fixed period being July 30, 2011.

The Company's capital leases for vessels leased from Ship Finance are long-term, fixed rate leases, which extend for various periods depending on the age of the vessels. The following table discloses information about the terms of these leases:

Vessel Type	Expiry of Mandatory Lease Period	Company's Optional Termination Date	Company's Purchase Option Periods	Lessor's Put Option Exercise Date
OBO (8 vessels)	2015	none	none	none
Double hull Suezmax (6 vessels)	2017-2021	none	none	none
Double hull VLCC (17 vessels)	2021-2027	none	none	none

In conjunction to the leases with Ship Finance, the Company has also entered into charter ancillary agreements whereby the Company agrees to pay Ship Finance a profit sharing payment equal to 20% of the charter revenues earned by the Company in excess of the daily base charterhire paid to Ship Finance. Subsequent to 2010, non-double hull vessels will be excluded from this profit sharing calculation. In the year ended December 31, 2010, total profit share due to Ship Finance was $30.6 million (2009: $33.0 million). In March 2010, the Company made certain amendments to the charter agreements with Ship Finance relating to 31 double hull crude oil tankers and OBOs, which resulted in our restricted cash deposits being reduced in exchange for a guarantee from us for the payment of charterhire. Withdrawals from these restricted cash deposits will be prohibited. As of December 31, 2010, the total charter service reserve is $62.0 million (2009: $184.3 million) and the balance is recorded as long term restricted cash in the Company's consolidated balance sheet.

F-19

15. EQUITY METHOD INVESTMENTS

As of December 31, the Company had the following participation in investments that are recorded using the equity method:

	2010			2009
Front Tobago Shipping Corporation		40	%		40	%
CalPetro Tankers (Bahamas I) Limited		100	%		100	%
CalPetro Tankers (Bahamas II) Limited		100	%		100	%
CalPetro Tankers (IOM) Limited		100	%		100	%

Summarized balance sheet information of investees which the Company accounts for under the equity method as of December 31, is as follows:

(in thousands of $)	2010		2009
Current assets		17,792		18,137
Non current assets		34,975		44,904
Current liabilities		10,611		10,843
Non current liabilities		38,103		47,629

Summarized statement of operations information of investees which the Company accounts for under the equity method for the three years ended December 31, is as follows:

(in thousands of $)	2010			2009			2008
Net operating revenues		4,115			5,047			5,836
Net operating income		3,811			4,694			5,493
Net loss		(515	)		(544	)		(483	)

Dividends totaling $nil were received from equity method investees in the year ended December 31, 2010 (2009: $nil).

The Company has determined that under FIN 46(R) (codified in ASC 810), it is not the primary beneficiary of the VIEs CalPetro Tankers (Bahamas I) Limited ("CalPetro BI"), CalPetro Tankers (Bahamas II) Limited ("CalPetro BII") and CalPetro Tankers (IOM) Limited ("CalPetro IOM") and as such, these entities are being accounted for under the equity method. These companies were incorporated in 1994 for the purpose of acquiring three oil tankers from Chevron Transport Corporation ("Chevron") and concurrently charter these vessels back to Chevron on long-term charter agreements. The companies were acquired by Independent Tankers Corporation ("ITC"), a wholly owned subsidiary of ITCL, which in turn is a 82.47% owned subsidiary of the Company. In April 2006, Chevron cancelled its bareboat contract with CalPetro Tankers (Bahamas III) Limited ("CalPetro BIII"). Under FIN 46(R) (codified in ASC 810) this was considered to be a reconsideration event and the Company began consolidating the VIE into its accounts from that date. Prior to this date, CalPetro BIII, was also equity accounted. The Company does not guarantee the debt of these entities and the net assets of the three entities that are not consolidated total $2.8 million (2009: $3.3 million). The Company's exposure is limited to its share of the net assets of these three entities while the Chevron charters are still in place.

16. DEFERRED CHARGES

(in thousands of $)	2010			2009
Debt arrangement fees		10,560			6,837
Accumulated amortization		(3,134	)		(2,167	)
		7,426			4,670

17.      ACCRUED EXPENSES

(in thousands of $)	2010		2009
Voyage expenses		33,569		14,392
Ship operating expenses		11,423		20,966
Administrative expenses		4,799		4,068
Interest expense		18,554		22,456
Taxes		81		376
Other		3,774		3,321
		72,200		65,579

F-20

18.  OTHER CURRENT LIABILITIES

(in thousands of $)	2010		2009
Accrued charterhire		51		724
Deferred gain on termination of finance leases		-		24,917
Newbuilding installment payable		-		10,460
Other		10,791		8,226
		10,842		44,327

The Company terminated three capital leases in December 2009, entering into new operating leases in the same month for the same vessels. The gain on the termination of the capital leases was deferred at December 31, 2009 and was recognized over the new minimum lease period which ended on December 1, 2010.

19.  DEBT

(in thousands of $)	2010			2009
US Dollar denominated floating rate debt due through 2020		834,659			558,121
US Dollar denominated fixed rate debt:
6.68% First Preferred Mortgage Serial Notes due 2010		-			1,200
4.25% Convertible bond due 2015		225,000			-
8.52% First Preferred Mortgage Term  Notes due 2015		-			10,884
7.84% to 8.04% First Preferred Mortgage Term Notes due 2019 and 2021		303,289			313,711
Total US Dollar floating rate and fixed rate debt		1,362,948			883,916
Credit facilities		1,410			666
Total debt		1,364,358			884,582
Less current portion of long-term debt		(173,595	)		(123,884	)
		1,190,763			760,698

The outstanding debt as of December 31, 2010 is repayable as follows:

(in thousands of $)
Year ending December 31,
2011	173,595
2012	82,497
2013	122,737
2014	65,612
2015	385,587
Thereafter	534,330
	1,364,358

The weighted average interest rate for floating rate debt denominated in U.S. dollars was 3.20% as of December 31, 2010 (2009: 2.67%).

In July and August 2008, ITCL purchased three tranches of the Windsor Petroleum Transport Corporation 7.84% term notes on the open market. The bonds that were repurchased have not been cancelled. The term notes above have been presented net of the bonds owned by ITCL.

U.S. DOLLAR DENOMINATED FLOATING RATE DEBT

$65.0 million term loan facility

In June 2006, the Company entered into a $80.0 million secured term loan facility. The facility bore interest at LIBOR plus a margin. The facility was partially refinanced for $65.0 million in June 2009 and matures in June 2013. This facility was repaid in June 2010.

F-21

$129.6 million term loan facility

In June 2008, the Company entered into a $129.6 million pre-delivery secured term loan facility. This loan was refinanced in June 2009 and was repaid in June 2010. The loan bore interest at LIBOR plus a margin.

$420.0 million term loan facility

In June 2008, the Company entered into a $420.0 million pre- and post-delivery secured term loan facility falling due in 2017. At December 31, 2010 the balance outstanding on the loan was $363.0 million. This facility bears interest at LIBOR plus a margin.

$180.0 million term loan facility

In September 2008, the Company entered into a $180.0 million secured term loan facility falling due in September 2013. At December 31, 2010 the balance outstanding on the loan was $99.0 million. The loan bears interest at LIBOR plus a margin.

$146.4 million term loan facility

In May 2009, the Company entered into a $146.4 million pre- and post-delivery secured term loan facility falling due in 2020. At December 31, 2010 the balance outstanding on the loan was $142.8 million. This facility bears interest at LIBOR plus a margin.

$33.0 million loan facility

In June 2009, ITCL entered into a $33.0 million secured loan facility with the full amount drawn down at the year end. The loan was extended for one year in June 2010 and bears interest at LIBOR plus a margin and falls due in June 2011. The facility has been guaranteed by the Company and the Company has pledged its shares in ITCL as security for the guarantee.

$200.0 million term loan facility

In June 2010, the Company entered into a $200.0 million secured term loan facility falling due in 2015. At December 31, 2010, the balance outstanding on the loan was $196.9 million. This facility bears interest at LIBOR plus a margin.

$20.0 million term loan facility

In December 2010, the Company entered into a $20.0 million secured term loan facility falling due in 2013. At December 31, 2010, no drawdown had taken place.  This facility bears interest at LIBOR plus a margin.

$147.0 million term loan facility

In December 2010, the Company entered into a $147.0 million pre- and post-delivery secured term loan facility falling due in 2017. At December 31, 2010 no drawdown had taken place on this facility. This facility bears interest at LIBOR plus a margin.

Certain of the Company's loan agreements contain loan-to-value clauses, which could require the Company to post additional collateral or prepay a portion of the outstanding borrowings should the value of the vessels securing borrowings under each of such agreements decrease below required levels. In addition, the loan agreements include certain financial covenants. The Company was in compliance with all of the financial covenants contained in the Company's loan agreements as of December 31, 2010.

U.S. DOLLAR DENOMINATED FIXED RATE DEBT

4.5% Convertible Bonds due 2015

On March 26, 2010, the Company announced the private placement of $225 million of convertible bonds and the offering of the bonds closed on April 14, 2010. The senior, unsecured convertible bonds have an annual coupon of 4.50%, which is paid quarterly in arrears and had a conversion price of $39.00. The bonds may be converted to Frontline Ltd. common shares by the holders at anytime up to 10 banking days prior to April 14, 2015. The reference price has been set at $29.7784 (NOK 180.0045). The applicable USD/NOK exchange rate has been set at 6.0448. The Company declared a dividend of $0.75 per share on May 21, 2010. The conversion price was adjusted from $39.00 to $38.0895 effective June 2, 2010, which was the date the shares traded ex-dividend. The Company declared a dividend of $0.75 per share on August 27, 2010. The conversion price was adjusted from $38.0895 to $37.0483 per share effective September 8, 2010, which was the ex-dividend date. There was no adjustment to the conversion price for the dividend of $0.25 per share, which was paid on December 21, 2010. On February 22, 2011 the Company announced a dividend of $0.10 per share. The conversion price was adjusted from $37.0483 to $36.5567 per share effective March 7, 2011, which was the ex-dividend date. The bonds will be issued and redeemed at 100% of their principal amount and will, unless previously redeemed, converted or purchased and cancelled, mature on April 14, 2015.

F-22

The Company has a right to redeem the bonds at par plus accrued interest at any time during the term of the loan, provided that 90% or more of the bonds issued shall have been redeemed or converted to shares. 6,154,822 new shares would be issued, if the bonds were converted at the current price of $36.5567.

First Preferred Mortgage Term Notes

ITCL is the holding company for three separate structures involved in financing and leasing transactions. One of these structures has Serial Notes which matured in 2010 and all of these structures have First Preferred Mortgage Term Notes maturing between 2015 and 2021. The Notes are collateralized by first preferred mortgages on the vessels owned by the ITCL subsidiaries. As of December 31, 2010, the effective interest rate for the Term and Serial Notes was 7.91% (2009 - 7.93%).

7.84% and 8.04% First Preferred Mortgage Term Notes

The 7.84% First Preferred Mortgage Term Notes due 2021 and the 8.04% First Preferred Mortgage Term Notes due 2019 are each subject to redemption through the operation of mandatory sinking funds according to the schedule of sinking fund redemption payments set forth below.  The sinking fund redemption price is 100% of the principal amount of Term Notes being redeemed, together with accrued and unpaid interest to the date fixed for redemption.

(in thousands of $)
Year ending December 31,
2011	15,152
2012	19,145
2013	20,700
2014	22,376
2015	24,174
Thereafter	201,742
	303,289

The Notes include certain covenants that, among other things, prohibit the separate structures from (i) incurring any indebtedness other than the existing Notes and obligations to the respective charterers, and in the case of one of the structures obligations to the lessor and related support bank, (ii) making any investments (other than the prescribed restricted investments), loans or advances outside the current structure or (iii) creating any liens other than to secure its obligations under the Notes and other relevant documents related to the Notes and leasing transactions.

8.52% First Preferred Mortgage Term Notes

Principal is repayable on the 8.52% First Preferred Mortgage Term Notes due 2015 in accordance with a remaining five year sinking fund schedule. Of the four entities reporting these term loans, only one entity, CalPetro BIII is consolidated as the remaining three entities are accounted for under the equity method under FIN 46(R) (codified in ASC 810). These Term Notes were repaid in full in 2010 following the sale of the Front Voyager at par value plus a make whole premium of $2.1 million.

Assets pledged

(in thousands of $)	2010		2009
Vessels and newbuildings		1,652,205		1,090,310
Marketable securities		-		61,920
Restricted cash and investments (excluding amounts held in charter service reserve)		182,091		315,721

In addition, the Company has pledged its shares in ITCL and $37.1 million of repurchased bonds in its ITCL subsidiary against its $33.0 million loan facility.

F-23

20.      SHARE CAPITAL

Authorized share capital:

(in thousands of $, except share data)	2010		2009
125,000,000 ordinary shares of $2.50 each		312,500		312,500

Issued and fully paid share capital:

(in thousands of $, except per share data)	2010		2009
77,858,502 ordinary shares of $2.50 each (2009: 77,858,502)		194,646		194,646

The Company's ordinary shares are listed on the New York Stock Exchange, the Oslo Stock Exchange and the London Stock Exchange.

In September 2008, the Company's shareholders at the Annual General Meeting approved a stock split which would result in authorized share capital of 625,000,000 ordinary shares of $0.50 per share. No record date was set for the stock split and the stock split had not taken place at December 31, 2010.

21.  ACCUMULATED OTHER COMPREHENSIVE LOSS

The activity in Accumulated Other Comprehensive Loss is summarized as follows:

(in thousands of $)	Unrealized investment gains (losses)			Translation adjustments			Total
Balance at December 31, 2007		(324	)		(3,372	)		(3,696	)
Translation adjustment for the year		-			(1,312	)		(1,312	)
Net unrealized losses for the year		(25,574	)		-			(25,574	)
Other-than-temporary impairment		25,134			-			25,134
Realized losses reclassified to net income		221			-			221
Balance at December 31, 2008		(543	)		(4,684	)		(5,227	)
Translation adjustment for year		-			759			759
Net unrealized gains for the year		2,782			-			2,782
Balance at December 31, 2009		2,239			(3,925	)		(1,686	)
Translation adjustment for year		-			(137	)		(137	)
Net unrealized losses for the year		(11,438	)		-			(11,438	)
Other-than-temporary impairment		9,425			-			9,425
Balance at December 31, 2010		226			(4,062	)		(3,836	)

 22.  SHARE OPTION PLANS

In November 2006, the Company's board of directors approved a share option plan, which was cancelled in 2009 and replaced with the Frontline Ltd. Share Option Scheme (the "Frontline Scheme"). The Frontline Scheme permits the board of directors, at its discretion, to grant options to acquire shares in the Company to employees and directors of the Company or its subsidiaries.  The subscription price for all options granted under the scheme will be reduced by the amount of all dividends declared by the Company in the period from the date of grant until the date the option is exercised, provided the subscription price is never reduced below the par value of the share.  Options granted under the scheme will vest at a date determined by the board at the date of the grant.  The options granted under the plan to date vest over a period of one to three years and have a five year term.  There is no maximum number of shares authorized for awards of equity share options and authorized, unissued or treasury shares of the Company may be used to satisfy exercised options.

The Company had previously granted 760,000 options of which 142,000 had been forfeited prior to vesting. During 2009, the remaining 618,000 options were cancelled and concurrently replaced with new options. As prescribed by ASC 718, this has been accounted for as a modification of previous award of equity instruments. In addition, a further grant of options for 45,000 shares was awarded in 2009. The fair value of the option modification and the new options granted is estimated on the date of the modification or new grant using a Black-Scholes option valuation model, with the following assumptions:

F-24

	2009
Risk free interest rate	1.35%
Expected life	3.5 years
Expected volatility	61%
Expected dividend yield	0%

The risk-free interest rate was estimated using the interest rate on 3 year US treasury zero coupon issues.  The volatility was estimated using historical share price data.  The dividend yield has been estimated at 0% as the exercise price is reduced by all dividends declared by the Company from the date of grant to the exercise date.   It is assumed that 95% of all options granted in 2009 will vest.

The following summarizes share option transactions related to the Frontline Scheme:

(in thousands except per share data)	Number of Options	Weighted Average Exercise Price
Options outstanding as of December 31, 2007	100.0	NOK 162.36
Granted	760.0	NOK 243.00
Exercised	(33.3)	NOK 135.90
Forfeited	(201.7)	NOK 198.49
Options outstanding as of December 31, 2008	625.0	NOK 208.78
Granted	663.0	NOK 145.00
Exercised	-	-
Forfeited	(7.0)	NOK 205.42
Cancelled	(618.0)	NOK 203.94
Options outstanding as of December 31, 2009	663.0	NOK 144.16
Granted	-	-
Exercised	(2.0)	NOK 131.65
Forfeited	(10.0)	NOK 133.71
Options outstanding as of December 31, 2010	651.0	NOK 131.65
Exercisable options as at:
December 31, 2010	219.0	NOK 131.65
December 31, 2009	Nil	Nil
December 31, 2008	Nil	Nil

The weighted average exercise price is adjusted for dividends in accordance with the terms of the plan. The remaining contractual term for the options outstanding and exercisable at December 31, 2010, 2009 and 2008, is 3.8 years, 4.8 years and 4.2 years, respectively.

The total fair value of share options vested in the years ended December 31, 2010, 2009 and 2008 was $2.0 million, $nil and $nil, respectively.

The weighted average grant-date fair value of options granted during 2010 is $nil (2009: $9.92 per share, 2008: $15.37). The weighted average modification-date fair value of options modified in 2010 is $nil (2009: $3.10, 2008: $nil).

The intrinsic value of share options exercised in the years ended December 31, 2010, 2009 and 2008 was $nil, $nil and $1.1 million, respectively.

As at December 31, 2010, the intrinsic value of both outstanding and exercisable share options was $2.1 million (2009: $1.9 million).

As of December 31, 2010, there was $1.3 million (2009: $3.2 million) in unrecognized compensation cost related to non-vested options granted under the Frontline Scheme.  The unrecognized compensation expense is recognized over a period of 1.8 years in accordance with vesting conditions. Compensation expense recognized in the years ended December 31, 2010, 2009 and 2008 was $2.1 million, $3.0 million and $4.3 million, respectively.

F-25

23.  FINANCIAL INSTRUMENTS

Foreign currency risk

The majority of the Company's transactions, assets and liabilities are denominated in U.S. dollars, the functional currency of the Company. Certain of the Company's subsidiaries report in Sterling, Singapore dollars or Norwegian kroner and risks of two kinds arise as a result:

· a transaction risk, that is, the risk that currency fluctuations will have a negative effect on the value of the Company's cash flows;

· a translation risk, that is, the impact of adverse currency fluctuations in the translation of foreign operations and foreign assets and liabilities into U.S. dollars for the Company's consolidated financial statements.

Accordingly, such risk may have an adverse effect on the Company's financial condition and results of operations. The Company has not entered into derivative contracts for either transaction or translation risk.

Forward freight contracts

During 2010, the Company entered into forward freight contracts for speculative purposes. As of December 31, 2010, the Company had 26 contracts outstanding (2009: nil). The Company incurred a loss on forward freight contracts of $0.02 million in 2010 (2009: nil), which is included in "mark to market of derivatives".

Fair Values

The carrying value and estimated fair value of the Company's financial instruments as of December 31, 2010 and 2009 are as follows:

	2010				2009
(in thousands of $)	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-Derivatives:
Cash and cash equivalents		176,639		176,639		82,575		82,575
Restricted cash and investments		244,091		252,891		500,021		500,021
Marketable securities		51,481		51,481		62,920		62,920
Long-term investments		-		-		20,020		20,020
Floating rate debt and credit facilities		836,069		836,069		558,787		558,787
6.68% First Preferred Mortgage Serial Notes		-		-		1,200		1,200
8.52% First Preferred Mortgage Term Notes		-		-		10,884		11,036
7.84% to 8.04% First Preferred Mortgage Term Notes		303,289		291,368		313,711		301,403
4.5% Convertible bond		225,000		214,103		-		-

The above financial assets and liabilities are measured at fair value on a recurring basis as follows:

(in thousands of $)	2010 Fair Value		Level 1		Level 2		Level 3
Non-Derivatives:
Cash and cash equivalents		176,639		176,639		-		-
Restricted cash and investments		252,891		252,891		-		-
Marketable securities		51,481		51,481		-		-
Floating rate debt and credit facilities		836,069		836,069		-		-
7.84% to 8.04% First Preferred Mortgage Term Notes		291,368		108,819		182,549		-
4.5% Convertible bond		214,103		-		214,103		-

The following methods and assumptions were used to estimate the fair value of each class of financial instrument;

Cash and cash equivalents - the carrying values in the balance sheet approximate their fair value.

F-26

Restricted cash and investments - the fair value at December 31, 2010 includes the market value adjustment received by the Company in March 2011.  This market value adjustment has not been recorgnized in 2010 and is, therefore, not included in the carrying value of restricted cash and investments.

Marketable securities – the fair values are based on quoted market prices.

Long term investments – the carrying value in the balance sheet approximates fair value.

U.S. dollar denominated floating rate debt - the carrying values in the balance sheet approximate their fair value

since it bears variable interest rates, which are reset on a quarterly basis.

First preferred mortgage term notes - the estimated fair value of the 7.84% First Preferred Mortgage Term Notes is based on the market price achieved in the last significant trading of the notes, adjusted for movements in the fixed income markets up to the year end (level two per ASC Topic 820 "Fair Value Measurements and Disclosures"). The estimated fair value of the 8.04% First Preferred Mortgage Term Notes is based on quoted market prices (level one per ASC Topic 820).

Convertible bond - quoted market prices are not available, however the bonds are traded "over the counter" and the fair value of the bonds is based on the market price on offer at the year end.

Concentrations of risk

There is a concentration of credit risk with respect to cash and cash equivalents to the extent that substantially all of the amounts are carried with Skandinaviska Enskilda Banken ("SEB"), The Bank of New York, DnB Nor Bank ASA and Nordea Bank Norge ("Nordea"). There is a concentration of credit risk with respect to restricted cash to the extent that substantially all of the amounts are carried with SEB, Nordea, Pacific Life, The Bank of New York and HSBC. However, the Company believes this risk is remote.

The majority of the vessels' gross earnings are receivable in U.S. dollars. During the year ended December 31, 2010, one customer accounted for more than 10% of our consolidated operating revenues (2009 and 2008: one customer).

24.  RELATED PARTY TRANSACTIONS

The majority of the Company's leased vessels are leased from Ship Finance and under a Charter Ancillary Agreement; Ship Finance is entitled to a share of 20% of the Company's earnings on these leased vessels. A summary of leasing transactions with Ship Finance during the years ended December 31, 2010, 2009 and 2008 is as follows:

(in thousands of $)	2010		2009		2008
Charterhire paid (principal and interest)		289,578		331,534		345,551
Payments received for termination of leases		2,435		2,386		43,510
Profit share expense		30,566		33,018		110,962
Remaining lease obligation		1,289,897		1,462,753		1,609,987

A summary of net amounts earned (incurred) from related parties excluding the Ship Finance lease related balances above for the years ended December 31, 2010, 2009 and 2008 are as follows:

(in thousands of $)	2010			2009			2008
Seatankers Management Co. Ltd		1,092			1,126			1,175
Golar LNG Limited		1,310			156			17
Golar LNG Energy Limited		88			-			-
Ship Finance International Limited		2,490			2,347			3,430
Golden Ocean Group Limited		6,138			4,253			6,714
Geveran Trading Co Ltd		-			(405	)		(366	)
Bryggegata AS		(1,368	)		(1,300	)		(1,395	)
Arcadia Petroleum Limited		34,211			42,264			64,784
Seadrill Limited		426			322			25
Seawell Limited		166			126			-
Deep Sea Supply Plc		132			32			-
Aktiv Kapital ASA		83			63			-
CalPetro Tankers (Bahamas I) Limited		47			45			43
Calpetro Tanker (Bahamas II) Limited		47			45			43
Calpetro Tankers (IOM) Limited		47			45			43

F-27

Net amounts earned from related parties comprise charterhire, office rental income and management, technical and commercial advisory, newbuilding supervision, corporate and administrative service income and interest income. Net expenses paid to related parties comprise primarily of rental for office space.

A summary of balances with related parties as at December 31, 2010 and 2009 is as follows:

(in thousands of $)	2010		2009
Receivables
Ship Finance International Limited		1,947		26,944
Seatankers  Management Co. Ltd		-		214
Seawell Ltd		51		-
Golar LNG Limited		404		247
Golar LNG Energy Limited		11		-
Northern Offshore Ltd		13		13
Golden Ocean Group Limited		1,075		1,119
Seadrill Limited		109		160
CalPetro Tankers (Bahamas I) Limited		20		11
CalPetro Tankers (Bahamas II) Limited		20		11
CalPetro Tankers (IOM) Limited		20		11
Deep Sea Supply Plc		2		2
Arcadia Petroleum Limited		3,553		11
		7,225		28,743

(in thousands of $)	2010			2009
Payables
Ship Finance International Limited		(31,448	)		(33,158	)
Seatankers Management Co. Ltd		(676	)		(96	)
Golar LNG Limited		(97	)		(519	)
Golden Ocean Group Limited		(1,057	)		(30	)
		(33,278	)		(33,803	)

Receivables and payables with related parties comprise unpaid management, technical advisory, newbuilding supervision, administrative service and rental charges and charterhire payments.  In addition, certain payables and receivables arise when the Company pays an invoice on behalf of a related party and vice versa.  The payable with Ship Finance also includes unpaid profit share due to Ship Finance. Receivables and payables with related parties are generally settled quarterly in arrears with the exception of profit share due to Ship Finance which is settled annually.

Ship Finance International Limited, Golar LNG Limited, Golar LNG Energy Limited, Northern Offshore Ltd, Seadrill Limited, Bryggegata AS, Golden Ocean Group Limited, Arcadia Petroleum Limited ("Arcadia"), Geveran Trading Co Ltd ("Geveran"), Deep Sea Supply Plc ("Deep Sea"), Aktiv Kapital ASA, Seawell Limited ("Seawell"), and Seatankers Management Co. Ltd are each subject to the significant influence or indirect control of John Fredriksen. CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited and CalPetro Tankers (IOM) Limited are equity accounted.

During 2008, the Company engaged in the trading of forward freight agreement trading through Arcadia, a related party, for which Arcadia was paid commission on each trade. The total amount of commissions paid to Arcadia in 2008 was $12,500. The Company did not engage in forward freight agreement trading in 2009 and 2010. In addition, the Company earned freights on chartering vessels to Arcadia in the amount of $33.9 million (2009: $42.5 million).

F-28

Effective February 5, 2010, Vista International Finance Inc, a wholly owned subsidiary of the Company purchased the VLCC, Front Vista, from Ship Finance for $58.5 million. The Front Vista had been chartered in by the Company. Due to the termination of the charter, a compensation fee of $0.4 million was paid to Ship Finance.

In March 2010, the Company made certain amendments to the charter agreements with Ship Finance relating to 31 double hull crude oil tankers and OBOs, which resulted in our restricted cash deposits being reduced in exchange for a guarantee from us for the payment of charterhire. Withdrawals from these restricted cash deposits will be prohibited. Restricted cash deposits held in respect of the Ship Finance charter reserves decreased by $111.7 million resulting from amendments to the charter agreements and $10.6 million due to reserves no longer required for two vessels. We also made an advance payment of charterhire less operating expenses of $72.8 million covering part of the payments due to Ship Finance over the six months from March 2010.

In March 2010, Ship Finance sold the single hull vessel Golden River to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $2.9 million.

In August 2010, Frontline sold 25% of SeaTeam Singapore Pte Limited to Golden Ocean Group Limited for $0.1 million and recognized a gain on sale of $0.2 million in the statement of equity. In addition SeaTeam Singapore Pte Limited received a loan of $0.5 million from Golden Ocean Group Limited, which is repayable over a term of five years and bears interest at 2.5% per annum.

In March 2009, a wholly owned subsidiary of the Company and Ship Finance amended their charter ancillary agreement whereby the charter service reserve totaling $26.5 million relating to vessels on charter from Ship Finance may be in the form of a loan to Ship Finance. In March 2009, a loan in the amount of $26.5 million was drawn down by Ship Finance. The loan bore interest at LIBOR plus a margin and was repaid in 2010.

Geveran acted as a guarantor for two loan facilities taken out by ITCL that expired in July and August 2009. Geveran received an annual fee of 2% of the drawndown facility for acting as guarantor. Both of these facilities were refinanced by ITCL during 2010, with the Company acting as guarantor.

25.      DISPOSAL OF ASSETS

In January 2008, Ship Finance sold the single hull vessel Front Maple to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $16.7 million and recorded a net gain of $17.1 million as a gain on sale of assets.

On March 6, 2008 the Company completed the partial non pro-rata spin off of its subsidiary ITCL and distributed 17.53% of ITCL to the Company's shareholders.  The spin-off resulted in a gain on disposal of $18.0 million which has been recorded within "other non-operating items, net".

In May 2008, Ship Finance sold the single hull vessel Front Sabang to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $26.8 million and recorded a net gain of $24.8 million as a gain on sale of assets.

In September 2009, Ship Finance sold the single hull vessel Front Duchess to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $2.4 million and recorded a net gain of $3.1 million as a gain on sale of assets.

In February 2010, a wholly owned subsidiary of the Company purchased the VLCC, Front Vista, from Ship Finance for $58.5 million. The Front Vista had been chartered in by the Company. Due to the termination of the charter, a compensation fee of $0.4 million was paid to Ship Finance. In March 2010, the Company sold the Front Vista. The sale price of $60.0 million will be settled in the payment of instalments over a 10 year period and the transaction has been recorded as an investment in a sales type lease.

In March 2010, Ship Finance sold the single hull vessel Golden River to a third party and as a result, terminated the Company's long-term lease for the vessel. The Company received a termination payment of $2.9 million.

In April 2010, Calpetro BIII, a subsidiary of the Company sold the Front Voyager for $8.3 million and recognized a net gain of $0.1 million.

F-29

26.      NONCONTROLLING INTEREST AND DIVIDEND DISTRIBUTION TO SHAREHOLDERS

In August 2010, the Company sold 25% of SeaTeam Singapore Pte Limited to Golden Ocean Group Limited for $0.1 million and recognized a gain on sale of $0.2 million in the statement of equity.

The Company accounts for pro-rata distributions to owners in a spin-off at the book value of shares distributed and accounts for non pro-rata distributions to owners in a spin-off at the fair value of shares distributed.

In February 2008, as part of the Company's planned spin-off of its investment in its Bermuda subsidiary ITCL to the Company's shareholders, the Company's Board of Directors declared a special dividend-in-kind of 17.53% of the Company's investment in ITCL with the distribution date being March 6, 2008. Qualifying shareholders received one share in ITCL for every five shares held in the Company. Non qualifying shareholders received a cash equivalent of $0.34 per Frontline share held totaling a cash dividend of $14.0 million representing 8.5% of the fair value of ITCL on the date of distribution.  The value of the non-cash dividend was established as $11.4 million, representing 9.0% of the fair value of ITCL on the date of distribution. Fair value was established by using the average price of ITCL shares over the first five trading days after the shares were listed on the Norwegian OTC market. As of December 31, 2010 and 2009 the Company owned 82.47% of ITCL.

27.      COMMITMENTS AND CONTINGENCIES

The Company insures the legal liability risks for its shipping activities with Assuranceforeningen SKULD, Assuranceforeningen Gard Gjensidig and Britannia Steam Ship Insurance Association Limited, all mutual protection and indemnity associations. As a member of these mutual associations, the Company is subject to calls payable to the associations based on the Company's claims record in addition to the claims records of all other members of the associations. A contingent liability exists to the extent that the claims records of the members of the associations in the aggregate show significant deterioration, which result in additional calls on the members.

As of December 31, 2010, the Company had nine vessels that were sold by the Company at various times during the period from November 1998 to December 31, 2003, and leased back on charters that have initial periods ranging from eight to twelve and a half years including options on the lessor's side to extend the charters for periods that range up to five years. Five of these charters are accounted for as capital leases and four are accounted for as operating leases. The Company has purchase options at certain specified dates and the lessor has options to put the vessels on the Company at the end of the lease terms for six of these vessels. The total amount that the Company would be required to pay under these put options with respect to the operating lease is $9.5 million.

As of December 31, 2010, Chevron charters three vessels on long-term bareboat charters and holds options to purchase each vessel for $1 on April 1, 2015.

As of December 31, 2010, the Company had contracts for the construction of five VLCC newbuildings scheduled for delivery in 2012 and 2013 and two Suezmax newbuildings scheduled for delivery in 2013. As of December 31, 2010, the Company was committed to make further installments of $451.4 million as follows:

(in thousands of $)
Year ending December 31,
2011	106,868
2012	168,859
2013	175,689
	451,416

In January 2008, Golden President Shipping Corporation, a 100% subsidiary of Golden Ocean Group Limited ("Golden Ocean"),  had a full and final win in the court case against Bocimar N.V. on the Channel Alliance Time Charter Party and was awarded $14.7 million plus interest thereon. This amount was originally guaranteed by Frontline to Golden Ocean in connection with the spin-off in December 2004, and was later paid to Golden Ocean as it became due according to the charter party.  The settlement paid during the year from Bocimar N.V. was therefore due and paid to Frontline. Proceeds received of $16.6 million were recognized in 2008 in "other non-operating items, net".

F-30

The Company is a party, as plaintiff or defendant, to several lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the operation of its vessels, in the ordinary course of business or in connection with its acquisition activities.  The Company believes that the resolution of such claims will not have a material adverse effect on the Company's operations or financial condition.

28.      SUPPLEMENTAL INFORMATION

Non-cash investing and financing activities include the following:

(in thousands of $)	2010		2009		2008
Dividends in kind:
Spin-off of ITCL		-		-		11,475

29.      POOL REVENUES

Voyage charter revenues include pool revenues. Certain pools are responsible for paying voyage expenses and distribute net pool revenues to the participants while other pools require the participants to pay and account for voyage expenses, and distribute gross pool revenues to the participants such that the participants' resulting net pool revenues are equal to net pool revenues calculated according to the agreed formula. An analysis of the Company's pool revenues included within voyage revenues is as follows:

(in thousands of $)	2010		2009		2008
Pool earnings allocated on a gross basis		-		-		373
Pool earnings allocated on a net basis		125,561		120,904		-
		125,561		120,904		373

30.      SUBSEQUENT EVENTS

In January 2011, the Company sold its 2006-built VLCC Front Shanghai. The net sale proceeds were $91.2 million and after repayment of debt the sale generated $31.5 million in cash. The Company has, in connection with the sale, agreed to charter back the vessel from the new owner. The duration of the time charter is approximately two years at a rate of $35,000 per day. Delivery to the new owners took place on January 26, 2011.

In January 2011, the Company received $3.6 million being the market value adjustment to a guaranteed investment contract for which termination notice was given by the Company in December 2010. This amount was recorded in 2010 in accordance with the terms of the contract.

In January and February 2011, the Company sold all its shares in OSG for $46.5 million. The Company expects to record a loss of $3.3 million in the first quarter of 2011.

In February 2011, the Company agreed with Ship Finance to terminate the long term charter parties between the companies for the two single hull VLCCs Ticen Sun and Front Ace and Ship Finance simultaneously sold the vessels. The termination of the charter parties took place in February 2011 and March 2011, respectively, and Ship Finance made a compensation payment to the Company of approximately $5.8 million for the early termination of the charter parties.

In February 2011, the Company's Board of Directors declared a dividend of $0.10 per share, which was paid on March 23, 2011.

In March 2011, the Company received $8.8 million being the market value adjustment to a guaranteed investment contract for which termination notice was given by the Company in February 2011. This amount will be recorded in the first quarter of 2011 in accordance with the terms of the contract.

In March 2011, the Company exercised its option to acquire the 2002-built VLCC Front Eagle and sold the vessel to an unrelated third party for $67.0 million. The Company has, in connection with the sale, agreed to charter back the vessel from the new owner. The duration of the time charter is approximately two years at a rate of $32,500 per day. Delivery to the new owners and commencement of the time charter is expected to take place concurrently in the second quarter of 2011.

In April 2011, the Company agreed with Ship Finance to terminate the long term charter party between the companies for the OBO vessel Front Leader and Ship Finance simultaneously sold the vessel. The termination of the charter party is expected to take place in the second quarter of 2011 and the Company expects to make a compensation payment to Ship Finance of approximately $7.7 million for the early termination of the charter party.

F-31

EX-4.16

Exhibit 4.16

Appendix A

THE RULES

OF

FRONTLINE LTD'S

SHARE OPTION SCHEME

(Approved by Frontline Ltd's shareholders on September [ ], 2009)

Rules Of Frontline Ltd Employe Share Option Scheme Adopted

FRONTLINE LTD

RULES OF THE

SHARE OPTION SCHEME

1.         DEFINITIONS

1.1In this Scheme the following words and expressions shall, where the context so permits, have the following meanings:

"Adoption Date" means the date on which the Scheme is approved by the Shareholders of Frontline Ltd;

"Auditors" means the auditors of the Company (acting as experts and not as arbitrators) from time to time;

"Board" means the board of directors of the Company or the directors present at a duly convened meeting of the board of directors or of a duly constituted committee of the board of directors at which a quorum is present;

"Change of Control" means an event whereby another entity gains control over the Company (i) by imposing a merger or consolidation in which the Company is not the surviving company or (ii) by acquiring the majority of the shares in the Company or (iii) by the vote of its own shares or by acting in concert with other shareholders appoints a new majority of the Board;

"Company" means Frontline Ltd, registered in Bermuda;

"Date of Grant" means the date on which an Option is granted by the Board pursuant to Clause 2 hereof;

"Eligible Person" means an employee who is, or who becomes, contracted to work at least 20 hours per week in the service of one or more Participating Companies or a director or officer of a Participating Company;

"Group" means the Company and the Subsidiaries;

"Independent Expert" means either a firm of independent public accountants of recognised standing who may be the regular auditors of the Company or an internationally recognised investment bank to be selected by the Board;

"Market Value" means, on any day, the average of the middle market quotations of the price of the Shares as derived from the Oslo Stock Exchange (or any other stock exchange on which the Shares are traded, chosen by the Board) for the three immediately preceding dealing days on that stock exchange; or, if the Shares are not traded on any stock exchange, means the value of the Shares as determined by the Board.

"Option" means a right (but not an obligation) to subscribe for Shares granted to an Eligible Person pursuant to the Scheme;

"Option Certificate" means a certificate issued by the Company to the Option Holder evidencing the title of the Option Holder to the Option;

"Option Holder" means an Eligible Person or a former Eligible Person who is the holder of an Option which has neither been fully exercised nor ceased to be exercisable nor lapsed and, where the context so permits, a person entitled to rights under any such Option in consequence of the death of the original Option Holder;

"Option Shares" means Shares in respect of which an Option has been granted;

"Participating Company" means the Company, any Subsidiary and such companies as may be engaged to perform management functions for the Company and the Subsidiaries from time to time;

"Rules" means these rules as varied from time to time in accordance with Clause 8 hereof;

"Scheme" means this share option scheme;

"Shares" means fully paid ordinary shares of par value US$ 2.50 each in the capital of the Company;

"Share Capital" means the fully paid issued share capital of the Company;

"Subscription Cost" means, in relation to the exercise of an Option, the product of the number of Option Shares in respect of which the Option is exercised and the Subscription Price of such Option Shares;

"Subscription Price" means such price as the Board shall from time to time at its discretion resolve shall apply to an Option when such Option is granted provided that such price is not lower than the nominal value of a Share and that it shall be adjusted in accordance with Clause 6 below;

"Subsidiary" means a company, which for the time being, is a subsidiary of the Company within the definition contained in Section 86 of the Companies Act 1981 of Bermuda;

"Subsisting Option" means an Option which has neither lapsed nor been exercised.

"Vesting Date" means the date on which an Option becomes exercisable and is the date the Board, in its discretion, may prescribe from time to time when an Option is granted, provided that such date cannot be earlier than one day after the Date of Grant.

1.2       In this Scheme except in so far as the context otherwise requires:

a. words denoting the singular number shall include the plural number and words denoting the masculine gender shall include the feminine gender;

b. any reference herein to any enactment or statutory provision shall be construed as a reference to that Bermudian enactment or provision as from time to time amended extended or re-enacted; and

c.     references to the exercise of an Option shall include the exercise of an Option in part.

2.        GRANT OF OPTION

2.1  At any time after the Adoption Date, and not later than the tenth anniversary thereof, the Board may, in its absolute discretion, resolve to grant an Option or Options to an Eligible Person or to Eligible Persons on the terms and conditions set out in the Rules and in its resolution.

2.2 Immediately following the Date of Grant the Board shall notify the relevant Eligible Persons that they have been granted Options.

2.3  The notice given by the Board pursuant to Clause 2.2 shall be in such form, not inconsistent with these Rules, as the Board may determine and shall specify the number of Shares comprised in the Option, any terms applicable thereto other than as set out herein, the Date of Grant and the Subscription Price.

2.4  Not later than twelve weeks following the Date of Grant, the Option Holder may, by a notice given in writing, renounce his rights to any Option granted pursuant to Clause 2.1 in which event such Option shall be deemed for all purposes never to have been granted.

2.5  As soon as possible after the expiry of the twelve week notice period referred to in Clause 2.4, the Board shall issue an Option Certificate in respect of each Option in such form, not inconsistent with these Rules, as the Board may determine.

3.        LIMITATIONS

3.1      No Option shall be granted after the tenth anniversary of the Adoption Date.

3.2      No Option shall be granted to any person unless he is, at the Date of Grant, an Eligible Person.

4.       MAIN TERMS

4.1      No consideration shall be payable to the Company for the grant of an Option.

4.2  The Option shall entitle the Option Holder to subscribe for Shares at a price per Share equal to the Subscription Price at the date the Option is exercised.

4.3  Any Option which has not lapsed may be exercised in whole or in part at any time provided the earliest of the following events has occurred:

 a.        the Vesting Date;

 b.        the death of the Option Holder;

 c.        a Change of Control.

4.4      An Option which has vested, shall lapse on the earliest of the following events:

a. such date as the Board in its discretion may prescribe at the date the Option is granted, provided that such date cannot be later than the tenth anniversary of the Date of Grant;

b. the first anniversary of the Option Holder's death;

c. the first anniversary of the Option Holder's retirement;

d. three months following the Option Holder's ceasing to be an Eligible Person, other than by reason of his death or retirement;

e. six months after the Option has become exercisable in accordance with Clause 7.1;

4.5      An Option which has not vested, shall lapse on the earliest of the following events:

a. the date of an Option Holder's retirement; and

b. the date an Option Holder ceasing to be an Eligible Person other than by reason of his death or retirement.

5.         EXERCISE OF OPTIONS

5.1       Exercise of an Option shall be effected by the Option Holder giving notice in writing to the Company specifying the number of Option Shares (not being less than 500 Shares, and being a multiple of 100 Shares, except in the case of final exercise of all outstanding rights under the Option) in respect of which the Option is being exercised on that occasion and accompanied by the relevant Option Certificate and otherwise in such form and manner as the Board in its discretion may prescribe from time to time, provided that such notice shall be deemed to have been exercised and to take effect on the date on which payment of the Subscription Cost is received by the Company.

5.2  Subject to any necessary consents under regulations or enactments for the time being in force, compliance by the Option Holder with the Rules and receipt by the Company of the Subscription Cost, the Company shall, not later than thirty days after receipt of the notice referred to in Clause 5.1 above, allot and issue to the Option Holder the number of Shares specified in the notice. If the number of Shares over which the Option is exercised is less than that specified in the relevant Option Certificate then the Company will issue a balance Option Certificate in respect of the remainder of such Shares over which the Option is still capable of exercise.

5.3      Shares allotted under the Scheme in pursuance of the exercise of an Option shall rank pari passu in all respects with the Shares for the time being in issue save as regards any rights attaching by reference to a record date prior to the date on which the Option is exercised.

6.         ADJUSTMENTS TO OPTION RIGHTS

6.1      In the event of any capitalisation or rights issue, any sub-division, consolidation or a reduction of the capital of the Company, the Board shall make appropriate adjustments with regard to:

a. the aggregate number of Shares subject to any Option;

b. the Subscription Price subject to any Option; or

c the terms of any Option.

PROVIDED THAT:

d. any such adjustment has been confirmed in writing by an Independent Expert to be in their opinion fair and reasonable; and

e. the aggregate Subscription Cost payable by an Option Holder on the exercise of all his Options is not increased; and

f. the amount payable to subscribe for any Share subject to any Option shall not be reduced below its nominal value.

Further, the Subscription Price shall be reduced by the amount of all dividends declared by the Company per Share in the period from the Date of Grant until the date the Option(s) is exercised, always provided that the Subscription Price never shall be reduced below the par value of the Share.

6.2  The Board shall give notice in writing to each Option Holder affected by any adjustment made pursuant to Clause 6.1 and may, at its discretion, deliver to him a revised Option Certificate in respect of his Option.

Adjustments to the Subscription Price due to dividend payments shall be calculated as and when the Option(s) is exercised.

7.        WINDING-UP

7.1  If notice is given by the Board to the shareholders in the Company of a members' resolution for the voluntary winding-up of the Company, notice of the same shall forthwith be given by the Board to the Option Holders.

Each of the Option Holders shall be entitled, within three months following such notice, to give notice in writing to the Company (such notice being accompanied by payment of the Subscription Cost) that such Option Holder wishes to be treated as if all or any of his Options had been exercised immediately before the commencement of the winding-up. In such event the Option Holder will be entitled to participate in the assets available in the winding-up pari passu with the shareholders in the Company as if he were a shareholder in relation to such number of Shares as he would have been entitled to had his Options been so exercised. Subject thereto all Options shall lapse on the commencement of the winding-up.

7.2  Option rights shall lapse immediately in the event of the Company being wound-up otherwise than in the event of a voluntary winding-up.

8.        VARIATION OF THE SCHEME

8.1  Subject to Clause 9.2 the Board may at any time alter or add to the Rules in any respect, provided that:

a. the Board may not cancel an Option except where (i) the Option Holder has breached the provisions of Clause 9.5 or (ii) the Option Holder has previously agreed; and

b. (subject as herein provided) the Board may not modify the terms of an Option already granted otherwise than with the consent of the Option Holder.

8.2      The Board shall give notice in writing to each Option Holder of any alteration or addition made pursuant to this Clause 8 and may, at its discretion, deliver to each Option Holder a revised Option Certificate in respect of his Option.

9.         GENERAL PROVISIONS

9.1      The Company shall at all times keep available sufficient authorised but unissued Shares to satisfy the exercise in full of all Options for the time being capable of being exercised.

9.2  The Board may from time to time make and vary such regulations and establish such procedures for the administration and implementation of the Scheme as it thinks fit. In the event of any dispute or disagreement as to the interpretation of the Rules or as to the question of rights arising from or related to the Scheme, the decision of the Board shall (except as regards any matter required to be determined by the Auditors hereunder) be final and binding upon all persons.

9.3  The cost of the administration and implementation of the Scheme shall be borne by the Company.

 9.4  The rights and obligations of an Eligible Person under the terms on which the Eligible Person holds his office or employment with a Participating Company shall not be affected by his participation in the Scheme or by any right he may have to participate therein, and the Scheme shall afford an Eligible Person no rights to compensation or damages in connection with the termination of such office or employment for any reason whatsoever.

 9.5  The rights and obligations of an Option Holder shall be personal to the Option Holder and no Option nor the benefit thereof may be transferred, assigned, charged or otherwise alienated save that nothing in this sub-clause shall prohibit the transmission of an Option or the benefit thereof by operation of law.

 9.6  For so long as the Shares are listed on the Oslo Stock Exchange or any other stock exchange, the Company shall apply to the appropriate authorities of such stock exchange(s) for all Shares subscribed for under the Scheme to be admitted for trading thereon on par with the other Shares.

 9.7  Any notice or other document to be served by the Company under the Scheme on an Eligible Person or Option Holder may be served personally or by e-mail or by sending it through the post in a prepaid letter addressed to him at his address as last known to the Company.

Any notice or other document to be served on the Company under the Scheme may be served by an Eligible Person or Option Holder by leaving it at the registered office for the time being of the Company or by e-mail or by sending it through the post in a prepaid letter addressed to such registered office.

Where any notice or other document is served or sent by first class post it shall be deemed to have been received at the expiration of seven days (excluding Saturdays, Sundays or public holidays in Bermuda or Norway) after the time when cover containing the same was put in the post properly addressed and stamped. Any notice or document sent by e-mail shall be deemed to have been received at the time of transmission to the party to which it is addressed.

9.8  The Insider Trading Regulations of the Company are applicable to the Shares received as a consequence of the exercise of Options.

10.     TERMINATION OF THE SCHEME

10.1   The Scheme shall terminate on the earlier of the following dates:

a. the date (if any) determined by the Board to be the date of termination of the Scheme; and

b. the tenth anniversary of the Adoption Date.

10.2  Following termination of the Scheme pursuant to Clause 10.1 above, no further Options shall be granted but the subsisting rights and obligations of existing Option Holders will continue in force as if the Scheme had not terminated.

EX-4.21

Exhibit 4.21

ADDENDUM NO. 2

TO A CHARTER ANCILLARY AGREEMENT DATED 20” JUNE, 2005

This addendum no. 2 (the “Addendum No. 2”) to the charter ancillary agreement between the parties hereto dated 20 June 2005 as amended by the addendum no. 1 thereto dated 21 August 2007 is entered into on this 25th day of March 2010 by and between:

(1) SHIP FINANCE INTERNATIONAL LIMITED (the “Company”);

(2) THE VESSEL OWNING SUBSIDIARIES LISTED IN SCHEDULE A HERETO (the “Owners”);

(3) FRONTLINE LTD. (“Frontline”); and

(4) FRONTLINE SHIPPING II LIMITED (the “Charterer”); (each a “Party” and together the “Parties”.)

WHEREAS:

(A) The Parties are parties to a charter ancillary agreement dated 20th June, 2005 as amended by an addendum no. 1 thereto dated 21 August 2007 (together, the “Agreement”), setting forth, inter alia, the terms of certain arrangements supporting and securing the Charterer’s ability to pay charter hire under separate charterparties between the Charterer and each of the Owners.

(B) Under the terms of the Agreement, the Charterer has established a Charter Service Reserve.

(C) The Parties have subsequently agreed to make certain changes to the Agreement and the Performance Guarantee notably by reducing the Minimum Reserve (and thus allowing the Charterer to return funds to Frontline), expanding Frontline’s obligations under the Performance Guarantee to include a guarantee for the Charterer’s obligations to pay Charter Hire and reducing Frontline’s obligations under the Performance Guarantee by removing Frontline Management’s obligations under the Management Agreements and the Administrative Service Agreement from the guaranteed obligations.

(D) This Addendum No. 2 is entered into in order to document the changes to the Agreement.

1.            DEFINITIONS

Terms and expressions defined in the Agreement shall have the same meaning in this Addendum No. 2, unless otherwise explicitly stated herein.

2.            AMENDMENTS

The Parties agree that the definitions of “Minimum Reserve” and “Performance Guarantee” in the Agreement shall be deleted and replaced with the following:

“Minimum Reserve” means US$10,000,000 (provided, however, that the Minimum Reserve shall be reduced by an amount equal to US$2,000,000 upon the termination of any Charter after 25 March 2010 other than by reason of default by the Charterer under the Agreement or the Charters).

“Performance Guarantee” means the performance guarantee issued by Frontline in favor of the Company and the Owners on 16th June 2005 as subsequently amended by an addendum no. 1 thereto dated 25 March, 2010.

The Parties furthermore agree that paragraph (d) of the definition of “Event of Default” in the Agreement shall be deleted and replaced with the following:

“(d) the failure of the Charterer at any time to hold Cash or Cash Equivalents at least equal to the applicable Minimum Reserve.”

The Parties furthermore agree to delete the words “(other than the payment of charter hire)” and “and the obligations of Frontline Management under the Management Agreements and the Administrative Services Agreement” under the sixth Recital to the Agreement, so that this provision shall read:

“WHEREAS, pursuant to the Performance Guarantee, Frontline has agreed to guarantee the performance of the obligations of the Charterer under the Charters and this Agreement;”,

3. MISCELLEANEOUS

The Parties hereto agree that the provisions of the Agreement as amended by this Addendum No. 2 shall be identical to those in existence prior to the execution of this Addendum No. 2 save insofar as the same have been amended hereby, and that all references in the Agreement to the term “this Agreement” shall be deemed to be references to the Agreement as confirmed and amended hereby and references to “the Agreement”, “hereof”, “hereunder”, “herein” and kindred expressions shall be construed accordingly.

The Parties agree that this Addendum No. 2 shall be governed by the laws of England and Wales and that any disputes arising hereunder shall be subject to the same dispute resolution mechanism as provided for under Section 7.3 of the Agreement.

This Addendum No. 2 shall become effective on the date of the Parties’ signature hereof.

IN WITNESS WHEREOF the duly authorized representatives of the Parties hereto have caused this Addendum No. 2 to be executed on the day and year first above written.

For and on behalf of	For and on behalf of
SHIP FINANCE INTERNATIONAL LIMITED	FRONTLINE LTD.
/s/ Harald Gurvin	/s/ Margnus Vaaler
Signature	Signature
HARALD GURVIN ATTORNEY-IN-FACT	Magnus Vaaler Attorney-in-fact
Name with block letters	Name with block letters

For and on behalf of	for and on behalf of
ULTIMATE SHIPPING LIMITED MILLCROFT MARITIME SA GOLDEN NARROW CORPORATION HUDSON BAY MARINE COMPANY LIMITED NEWBOND SHIPPING COMPANY LIMITED	FRONTLINE SHIPPING II LIMITED
/s/ Harald Gurvin	/s/ Margnus Vaaler
Signature	Signature
HARALD GURVIN ATTORNEY-IN-FACT	Magnus Vaaler Attorney-in-fact
Name with block letters	Name with block letters

Schedule A

ULTIMATE SHIPPING LIMITED

MILLCROFT MARITIME SA

GOLDEN NARROW CORPORATION

HUDSON BAY MARINE COMPANY LIMITED

NEWBOND SHIPPING COMPANY LIMITED

EX-8.1

Exhibit 8.1

Significant Subsidiaries at April 4, 2011

Name	Country of Incorporation	Ownership and Voting Percentage
Frontline Shipping Limited	Bermuda	100%
Frontline Shipping II Limited	Bermuda	100%
Frontline Shipping III Limited	Bermuda	100%
Key Chartering Inc	Liberia	100%
Frontline Chartering Services Inc	Liberia	100%
Frontline Management (Bermuda) Ltd	Bermuda	100%
ICB Shipping (Bermuda) Limited	Bermuda	100%
Frontline Tankers Limited	Bermuda	100%
Frontline Corporate Services Ltd	United Kingdom	100%
Independent Tankers Corporation Limited	Bermuda	82.47%
Independent Tankers Corporation	Cayman Islands	100%
Buckingham Shipping Plc	Isle of Man	100%
Buckingham Petro Limited	Isle of Man	100%
Caernarfon Shipping Plc	Isle of Man	100%
Caernarfon Petro Limited	Isle of Man	100%
CalPetro Tankers (IOM) Ltd	Isle of Man	100%
CalPetro Tankers (Bahamas I) Ltd	Bahamas	100%
CalPetro Tankers (Bahamas II) Ltd	Bahamas	100%
CalPetro Tankers (Bahamas III) Ltd	Bahamas	100%
Golden State Petro (IOM I-A) PLC	Isle of Man	100%
Golden State Petro (IOM I-B) PLC	Isle of Man	100%
Holyrood Shipping Plc	Isle of Man	100%
Sandringham Shipping Plc	Isle of Man	100%
Sandringham Petro Limited	Isle of Man	100%
Front Sovereign Inc.	Liberia	100%
Front Monarch Inc.	Liberia	100%
Front Destiny Inc	Liberia	100%
Front Dragon Inc	Liberia	100%
Front Dynamic Inc	Liberia	100%
Front Dynasty Inc	Liberia	100%
Front Dream Inc	Liberia	100%
Front King Inc	Liberia	100%
Front Loki Inc	Liberia	100%
Front Njord Inc	Liberia	100%
Front Odin Inc	Liberia	100%
Front Queen Inc	Liberia	100%
Front Thor Inc	Liberia	100%
Front Hermod Inc	Liberia	100%
Front Ran Inc	Liberia	100%
Front Alfa Inc	Liberia	100%
Front Beta Inc	Liberia	100%
Front Delta Inc	Liberia	100%
Front Fighter Inc	Liberia	100%
Front Hunter Inc	Liberia	100%
Front Eminence Inc.	Liberia	100%
Front Endurance Inc.	Liberia	100%
Front Eagle Corporation	Liberia	100%
Golden Channel Corporation	Liberia	100%
Kea Navigation Ltd	Liberia	100%
Otina Inc.	Liberia	100%
Optimal Shipping SA	Liberia	100%
Pablo Navigation SA	Liberia	100%
Ryan Shipping Corporation	Liberia	100%
Saffron Rose Shipping Limited	Liberia	100%
Tidebrook Maritime Corporation	Liberia	100%
Bandama Investment Ltd	Liberia	100%
Sea Team Management Pte. Ltd	Singapore	75%
Sea Team Management (India) Pvt. Ltd	India	99%
Vista International Finance, Inc.	Liberia	100%
Chatham Ship Management, Inc.	Liberia	100%
Frontline Management AS	Norway	100%

EX-12.1

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

 I, John Fredriksen, certify that:

1. I have reviewed this annual report on Form 20-F of Frontline Ltd.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 4, 2011

/s/ John Fredriksen

John Fredriksen

Principal Executive Officer

EX-12.2

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a), AS AMENDED

I, Inger M. Klemp, certify that:

1. I have reviewed this annual report on Form 20-F of Frontline Ltd.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f))  for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: April 4, 2011

/s/ Inger M. Kemp

Inger M. Klemp

Principal Financial Officer

EX-13.1

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Frontline Ltd. (the "Company") on Form 20-F for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, John Fredriksen, the Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: April 4, 2011

/s/ John Fredriksen

John Fredriksen

Principal Executive Officer

EX-13.2

Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Frontline Ltd. (the "Company") on Form 20-F for the year ended December 31, 2010, as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Inger M. Klemp, the Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: April 4, 2011

/s/ Inger M. Kemp

Inger M. Kemp

Principal Financial Officer