UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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, 2011

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from                    to

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 _______________________________

Commission file number 033-79220-03

CalPetro Tankers (Bahamas III) Limited

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

The Bahamas

(Jurisdiction of incorporation or organization)

Mareva House, 4 George Street, PO Box N-3937, Nassau, The Bahamas

(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
None	Not applicable

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.

None

(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.

Unclassified common shares: 100 shares par value of $1 per share

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

Yes o Nox

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 Nox

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 x 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 o Accelerated filer  o Non-accelerated filer  x

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 Nox

INDEX TO REPORT ON FORM 20-F

Page

PART I
Item 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
Item 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
Item 3.	KEY INFORMATION	1
Item 4.	INFORMATION ON THE COMPANY	2
Item 4A.	UNRESOLVED STAFF COMMENTS	4
Item 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	4
Item 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	7
Item 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	8
Item 8.	FINANCIAL INFORMATION	9
Item 9.	THE OFFER AND LISTING	9
Item 10	ADDITIONAL INFORMATION	10
Item 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11
Item 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	11
PART II
Item 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	12
Item 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	12
Item 15.	CONTROLS AND PROCEDURES	12
Item 16.	RESERVED	13
Item 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	13
Item 16B.	CODE OF ETHICS	13
Item 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	13
Item 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	14
Item 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	14
Item 16F.	CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT	14
Item 16G.	CORPORATE GOVERNANCE	14
Item 16H	MINE SAFETY DISCLOSURES	14
PART III
Item 17.	FINANCIAL STATEMENTS	15
Item 18.	FINANCIAL STATEMENTS	15
Item 19.	EXHIBITS	15

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Matters discussed in this document may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements 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.

CalPetro Tankers (Bahamas III) Limited 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 document 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," "intends," "estimate," "forecast," "project," "plan," "potential," "should," "expect" and similar expressions identify forward-looking statements.

The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other 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.

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 market, changes in worldwide oil production and consumption and storage, changes in the company's operating expenses, 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 or political events, and other important factors described from time to time in the reports filed by CalPetro Tankers (Bahamas III) Limited with the Securities and Exchange Commission, or Commission.

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 CalPetro Tankers (Bahamas III) Limited. 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. Unless otherwise indicated, all references to "USD" and "$" in this report are to, and amounts are presented in, 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, 2011, 2010 and 2009, and the selected balance sheet data with respect to the fiscal years ended December 31, 2011 and 2010, have been derived from the Company's audited financial statements included herein and should be read in conjunction with such statements and the notes thereto. The selected statement of operations and retained earnings data with respect to the fiscal years ended December 31, 2008 and 2007, and the selected balance sheet data with respect to the fiscal years ended December 31, 2009, 2008 and 2007, have been derived from audited 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 audited financial statements and notes thereto included herein. The Company's accounts are maintained in U.S. dollars.

	Fiscal Years ended December 31,
	2011			2010			2009		2008		2007
(in thousands of $, except number of shares)
Statement of operations data:
Total operating revenues		-			2,588			2,863		2,894		3,093
Net (loss) income		(155	)		(832	)		1,580		1,985		2,385
Per share data:
Dividends per share		67			-			-		-		-
Balance sheet data:
Total assets		941			7,727			19,704		18,575		16,658
Current portion of long-term debt		-			-			730		444		-
Long-term debt		-			-			10,154		10,884		11,328
Equity		839			7,694			8,526		6,946		4,961
Number of shares		100			100			100		100		100

B.   Capitalization and Indebtedness

Not applicable.

C.   Reasons for the offer and use of proceeds

Not applicable.

1

D.   Risk Factors

We are not currently engaged in leasing a vessel. On January 5, 2010, Front Voyager Inc. gave notice of termination of the bareboat charter, which took effect on April 1, 2010. A Memorandum of Agreement, dated March 15, 2010, was signed regarding the sale of the Front Voyager, or the Vessel, for net sale proceeds of $8.3 million and delivery to the buyer occurred on April 8, 2010. Following the sale of our Vessel and the scheduled repayment of principal in the amount of $730,000 on April 1, 2010, the full amount outstanding on the Term Loan of $10.154 million was repaid in full on April 13, 2010, and a make whole premium of $2.1 million was also paid at that time for early redemption of the debt.

The following summarizes the risks that may materially affect our business, financial condition or results of operations.

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.

The buyer or another claimant may make a claim against us in respect of the Front Voyager, which may adversely affect our financial condition

Under the terms of the purchase agreement for the Front Voyager, we as the seller warrant that the Vessel at the time of physical and legal delivery is free from all encumbrances, mortgages, and maritime liens or any other debts, taxes and financial liabilities/obligations whatsoever. Should any claims, which have accrued prior to the time of delivery, be made against the Vessel, we have undertaken to unconditionally indemnify the buyers against all consequences of such claims. If the buyers or another claimant seek indemnification under this provision, prosecution or defense of this claim may adversely affect our financial position.

After the sale of the Front Voyager, we have no further income producing assets

The Front Voyager was the only income producing asset that we owned. After the sale of this Vessel, we have no further ongoing business and no assets that would create income in the future.

Item 4.    INFORMATION ON THE COMPANY

A.   History and Development of the Company

CalPetro Tankers (Bahamas III) Limited was incorporated in The Bahamas on May 13, 1994 together with two other companies: CalPetro Tankers (Bahamas I) Limited and CalPetro Tankers (Bahamas II). In addition CalPetro Tankers (IOM) Limited was incorporated in the Isle of Man. Together these companies are referred to as the Owners. Each of the Owners was organized as a special purpose company for the purpose of acquiring one of four oil tankers from Chevron, which were concurrently chartered on long-term charter agreements back to Chevron.

We along with CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, and CalPetro Tankers (IOM) Limited are wholly-owned by California Tankers Investments Limited, a company organized under the laws of The Bahamas, which is in turn a wholly-owned subsidiary of CalPetro Holdings Limited, an Isle of Man company. CalPetro Holdings Limited is a wholly-owned subsidiary of Independent Tankers Corporation, or ITC, a Cayman Islands company. ITC is itself wholly-owned by Independent Tankers Corporation Limited, or ITCL. ITCL was established in February 2008 and is 82.47% owned by Frontline Ltd., or Frontline, a Bermuda company whose shares are listed on the New York Stock Exchange, London Stock Exchange and Oslo Stock Exchange.

California Petroleum Transport Corporation, or California Petroleum or CPTC, a Delaware corporation which we refer to as acting as agent on behalf of the Owners, issued as full recourse obligations $167,500,000 Serial First Preferred Mortgage Notes, or the Serial Notes, and $117,900,000 8.52% First Preferred Mortgage Notes due in 2015, which we refer to as the Term Notes and together with the Serial Notes as the Notes. The Serial Notes were fully repaid April 1, 2006. The proceeds from the sale of the Notes were applied by way of long-term loans, being Serial Loans in respect of the Serial First Preferred Mortgage Notes and Term Loans in respect of the First Preferred Mortgage Notes due in 2015, to the Owners to fund the acquisition of the oil tankers from Chevron. We were allocated $27,640,000 of the Serial Loans and $12,744,000 of the Term Loans and acquired the Vessel as described below. We will engage in no business other than the ownership and chartering of the Vessel, which has been sold, and activities resulting from or incidental to such ownership and chartering.

2

After its delivery to us, the Vessel was chartered to Chevron. On April 21, 2005, we received irrevocable notice from Chevron regarding the termination of its bareboat charter of the Vessel on April 1, 2006 pursuant to that charter's terms. On April 1, 2006, the Vessel was redelivered to us and immediately delivered to Front Voyager Inc., or the "Charterer", a wholly-owned subsidiary of Frontline, for an initial two year period (the "Initial Period") under the Charter which provided for the prepayment of the charterhire in the amount of $5.05 million for the two years ended April 1, 2008 and contained annual options to extend the charter after April 1, 2008 up to April 1, 2015. On March 25, 2009, the Charterer exercised its option to extend the charter for the second one year optional period beginning April 1, 2009. On January 5, 2010, the Charterer gave notice that it would terminate the charter and paid a termination fee of $4.9 million on April 1, 2010 in accordance with the bareboat charter. A Memorandum of Agreement, dated March 15, 2010, was signed regarding the sale of the Vessel for net sale proceeds of $8.3 million and delivery to the buyer occurred on April 8, 2010. Following the sale of the Front Voyager and the scheduled principal repayment of $730,000 on the Term Loan on April 1, 2010, the full amount outstanding on the Term Loan of $10.154 million was repaid in full on April 13, 2010. In addition, a make whole premium of $2.1 million was paid at that time for early redemption of the Term Loan.

Our principal executive offices are located at Mareva House, 4 George Street, PO Box N-3937, Nassau, The Bahamas.

B.   Business Overview

The Vessel, which was sold on March 23, 2010 and delivered to the buyer on April 8, 2010, was a 155,000 dwt Suezmax oil tanker, which was originally acquired from Chevron. Suezmax tankers are medium-sized vessels ranging from approximately 120,000 to 200,000 dwt, and of the maximum length, breadth and draft requirements to be capable of passing fully loaded through the Suez Canal. After the sale of the Vessel, we will continue our existence but will not actively engage in any business other than in connection with ongoing corporate affairs.

The Charterer was principally engaged in the marine transportation of oil products. The charterer's primary transportation routes were from the Middle East, Indonesia, Mexico, West Africa and the North Sea to ports in the United States, Europe, the United Kingdom and Asia.

Management

On March 31, 1999, Frontline became our manager and technical advisor pursuant to an assignment of our management agreement, or the Management Agreement. Under the Management Agreement, Frontline provides administrative, ship management and advisory services to the Company as manager, or Manager. Pursuant to the Management Agreement, the Manager receives an annual fee of $13,625 for each vessel, along with an additional annual fee of $3,000 covering all four vessels. The technical advisor's fee consists of an annual fee of $10,000 for each vessel, payable semi-annually in arrears. Both the management fee and the technical advisor's fee, which together we refer to as the Management Fee, is payable semi-annually in arrears for the period until the third anniversary of the closing of the issue of the Notes, then increasing by four percent on each subsequent anniversary of the closing of the issue of the Notes. Our Vessel has been sold and the Manager will not receive a management fee or technical advisor fee for our Vessel.

C.   Organizational Structure

As described above, and also in Item 7 "Major Shareholders and Related Party Transactions", we are a wholly-owned subsidiary of California Tankers Investments Limited, a company organized under the laws of The Bahamas, which is a wholly-owned subsidiary of CalPetro Holdings Limited. CalPetro Holdings Limited is a wholly-owned subsidiary of ITC. ITC is a wholly-owned subsidiary of ITCL and 82.47% of the common shares of ITCL are owned by Frontline.

3

D.   Property, Plants and Equipment

Other than our Vessel described above, we do not have any property. A Memorandum of Agreement, dated March 15, 2010, was signed regarding the sale of our Vessel and delivery to the buyer occurred on April 8, 2010.

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" and the Company's audited Financial Statements and Notes thereto included herein.

Operating results

Year ended December 31, 2011 compared with the year ended December 31, 2010

Operating Revenues

(in thousands of $)	2011		2010		% Change
Charter revenue		-		2,588		-

On April 1, 2010, Front Voyager Inc. terminated the charter and no revenue was generated after this date. The Vessel was sold in April 2010.

Operating expenses

(in thousands of $)	2011		2010		% Change
Administrative expenses		158		108		46	%
Depreciation		-		87		-

Administrative expenses have increased in the year ended December 31, 2011 primarily due to a charge of $13,500 in respect of the Designated Representatives Fee under accrued in previous years and an increase in legal fees.

Other income (expenses)

(in thousands of $)	2011		2010			% Change
Interest income		3		6			(50)	%
Interest expense		-		(261	)		-
Other financial items		-		(3,011	)		-
Amortization of deferred charges		-		(19)			-

Interest income has decreased in the year ended December 31, 2011 primarily due to a reduction in interest rates.

Interest expense has decreased in the year ended December 31, 2011 due to the fact the Term Loans were repaid in full on April 13, 2010.

4

Other financial items in the year ended December 31, 2010 comprise a make whole premium of $2.1 million paid on the early redemption of the Term Loans and fees of $0.9 million relating to the consent solicitation process relating to the sale of Front Voyager and its release from the collateral securing the Term Notes.

The Company amortizes the deferred charges over the life of the Term Loans using the straight line method. The decrease in amortization of deferred charges in the year ended December 31, 2011 is attributable to the write off of the remaining deferred charges on the repayment of the Term Loans in 2010.

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

Operating Revenues

(in thousands of $)	2010		2009		% Change
Charter revenue		2,588		2,863		(9.6)	%

Charter revenue is recognized over the expected length of the charter and accounted for as a four year operating lease. On April 1, 2010, Front Voyager Inc. terminated the charter and paid a termination fee of $4.9 million, which was $1.8 million in excess of the expected termination fee. This amount of $1.8 million was recorded in the year ended December 31, 2010 in addition to the rentals of $0.8 million for the period to April 1, 2010.

Operating expenses

(in thousands of $)	2010		2009		% Change
Administrative expenses		108		136		(20.6)	%
Depreciation		87		241		(63.9)	%

Administrative expenses have decreased in the year ended December 31, 2010 primarily due to a reduction in management fees following the sale of the Vessel and a reduction in audit fees. Depreciation expense has decreased in the year ended December 31, 2010 due to the sale of the Vessel on April 8, 2010.

Other income (expenses)

(in thousands of $)	2010		2009		% Change
Interest income		6		35		(82.9)	%
Interest expense		(261)		(937)		(72.1)	%
Other financial items		(3,011)		-		-
Amortization of deferred charges		(19)		(4)		375.0	%

Interest income has decreased in the year ended December 31, 2010 primarily due to a reduction in interest rates

Interest expense has fallen in line with the amount outstanding under the Term Loans and due to the fact the Term Loans were repaid in full on April 13, 2010.

Other financial items in the year ended December 31, 2010 comprise a make whole premium of $2.1 million paid on the early redemption of the Term Loans and fees of $0.9 million relating to the consent solicitation process relating to the sale of Front Voyager and its release from the collateral securing the Term Notes.

The Company amortizes the deferred charges over the life of the Term Loans using the straight line method. The increase in amortization of deferred charges in the year ended December 31, 2010 is attributable to the write off of the remaining deferred charges on the repayment of the Term Loans.

Liquidity and Capital Resources

On January 5, 2010, the Charterer gave notice that it would terminate the charter and paid a termination fee of $4.9 million on April 1, 2010 in accordance with the bareboat charter. The Vessel was delivered to us on April 1, 2010.  A Memorandum of Agreement, dated March 15, 2010, was signed regarding the sale of our Vessel for net sale proceeds of $8.3 million. The full amount outstanding on the Term Loan of $10.154 million was repaid in full on April 13, 2010, and a make whole premium of $2.1 million was also paid at that time for early redemption of the debt.

5

The Company is jointly and severally liable with the other Owners for all the Owners obligations and liabilities in relation to the Term Loans but only to the extent of the proceeds received by California Petroleum Transport Corporation from California Petroleum Transport Corporation's right, title and interest in and to the collateral.

On October 3, 2011, pursuant to the Collateral Trust Agreement, excess funds held by the Trustee in the amount of $6.7 million allocable to the Company became available for release from the relevant trust account as a result of sufficient funds remaining on deposit at the Trustee for the payment in full of principal and interest on the Term Notes as they become due and were released to the Company on the same date.

The Company paid a dividend of $6.7 million on December 15, 2011.

Off-balance Sheet Arrangements

None.

Tabular disclosure of contractual obligations

As at December 31, 2011, we had no contractual obligations and commitments.

Critical Accounting Policies

Our principal accounting policies are described in Note 2 to the financial statements, which are included in Item 18. "Financial Statements" of this Annual Report. The most critical accounting policies include:

Revenue Recognition

Revenue is generated from bareboat charter hire and is recorded over the term of the charter as service is provided.

Recent accounting pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs". In general, ASU 2011-04 clarifies the FASB's intent about the application of existing fair value measurement and disclosure requirements, and for many of these requirements the amendments are not intended to result in any change in the application of Accounting Standards Codification ("ASC") Topic 820 ("Fair Value Measurement"). At the same time, there are some amendments that do change particular principles or requirements relating to fair value measurement and disclosure.  ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. Its adoption is not expected to have a material impact on the Company's disclosures or financial position, results of operations, and cash flows.

In June 2011, the FASB issued ASU 2011-05 "Presentation of Comprehensive Income" in order to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity, and requires entities to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 is effective for fiscal years beginning after December 15, 2011, although early adoption is permitted. Its adoption will affect the presentation of the Company's financial statements, but is not expected to have a material impact on the Company's disclosures or financial position, results of operations, and cash flows. ASU 2011-05 also included the requirement to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) in which the components of net income and the components of other comprehensive income are presented. Owing to concerns raised about difficulties in its implementation, this latter requirement has been deferred for further consideration, through the issue by the FASB in December 2011 of ASU 2011-12 "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05".  Its adoption is not expected to have a material impact on the Company's disclosures or financial position, results of operations, and cash flows.

6

In December 2011, the FASB issued ASU 2011-11 "Disclosures about Offsetting Assets and Liabilities" in order to standardize the disclosure requirements under US GAAP and IFRS relating to both instruments and transactions eligible for offset in financial statements. ASU 2011-11 is applicable for annual reporting periods beginning on or after January 1, 2013. Its adoption is not expected to have a material impact on the Company's disclosures.

Trend Information

Not applicable.

Research and development, patents and licenses, etc.

Not applicable

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

Name	Age	Position
Tor Olav Trøim	49	Director and President
Kate Blankenship	47	Director and Secretary

Tor Olav Trøim has been a director of the Company since October 31, 2001. Mr. Trøim graduated as M.Sc Naval Architect from the University of Trondheim, Norway in 1985. He was formerly an Equity Portfolio Manager with Storebrand ASA (1987-1990), and Chief Executive Officer for the Norwegian Oil Company DNO AS (1992-1995). Since 1995 Mr. Trøim has been a director of Seatankers Management in Cyprus. Mr. Trøim serves as a director and Chairman of ITCL, a director of Seadrill Limited, Golden Ocean Group Limited, Aktiv Kapital ASA, Archer Limited, Golar LNG Partners LP and as an alternate director of Frontline Ltd.

Kate Blankenship has been a director of the Company since October 31, 2001.  Mrs. Blankenship has been a director of the Manager since March 2000. Mrs. Blankenship served as the Chief Accounting Officer and Secretary of Frontline from 1994 until October 2005. Mrs. Blankenship served as Chief Financial Officer of Knightsbridge Tankers Limited from April 2000 to September 2007. Mrs. Blankenship has been a director of Ship Finance International Limited since October 2003.  Mrs. Blankenship has served as a director of ITCL since February 2008, Golar LNG Limited since July 2003, Golden Ocean Group Limited since November 2004, Seadrill Limited since May 2005, Archer Limited since August 2007 and Golar LNG Partners LP since 2007. She is a member of the Institute of Chartered Accountants in England and Wales.

B.     Compensation

During the year ended December 31, 2011, we paid no compensation to our directors and officers.

7

C.     Board Practices

The directors have no fixed date of expiry of their term of office. The details of their service are shown above. The directors have no entitlement to any benefits on termination of their office.

We have neither an audit nor a remuneration committee.

D.     Employees

We do not have any employees involved in the management of the Vessel.

Frontline is our Manager as described below in Item 7 "Major Shareholders and Related Party Transactions."

E.      Share Ownership

The directors of the Company have no share ownership in the Company, and do not have any arrangement that involves the issue or grant of securities of the Company.

Item 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.      Major Shareholders

As of March 15, 2012, except as set forth below, the Company is not aware of any beneficial owner of more than 5% of its Common Stock.

Class of Shares	Name and address of Beneficial Owners	Number of Shares	Percent of Class
Unclassified common shares	California Tankers Investment Limited (1)	100	100%

(1) The issued and outstanding shares of the Company are owned by California Tankers Investment Limited. All of the issued and outstanding shares of California Tankers Investment Limited are owned by CalPetro Holdings Limited. All of the issued and outstanding shares of CalPetro Holdings Limited are owned by Independent Tankers Corporation. All of the issued and outstanding shares of Independent Tankers Corporation are owned by Independent Tankers Corporation Limited, which is 82.47% owned by Frontline Ltd.

All the issued and outstanding shares of our capital stock have been pledged by us to California Petroleum Transport Corporation, or CPTC, pursuant to the stock pledge agreement between us and CPTC and are being held by the Bank of New York, as successor to the Chase Manhattan Trust Company of California and JP Morgan Chase, or the Collateral Trustee, as part of the collateral for the Notes.  ITC has full voting control over us subject to the rights of the Collateral Trustee.

The Company is not aware of any arrangements, the operation of which may at a subsequent date result in a change in control of the Company.

B.    Related Party Transactions

As discussed in Item 4 "Information on the Company", our Vessel was chartered to Front Voyager Inc., a wholly owned subsidiary of Frontline, until April 1, 2010. Frontline is our Manager and ultimate parent company. This charter terminated on April 1, 2010.

Under the management agreement, Frontline is entitled to a Management Fee and a Technical Advisor's Fee. The Management Fee consists of a fee of $13,625 initially per annum for the Vessel, together with an additional annual fee of $3,000 covering all four Vessels, payable semi-annually in arrears for the period until the third anniversary of the closing of the Notes issue then increasing by four percent on each subsequent anniversary of the closing of the issue of the Notes.

8

The Technical Advisor's Fee was initially $10,000 per annum for each Vessel, payable semi-annually in arrears, during the initial first three year period as described above. On each subsequent anniversary of the closing of the issue of the Notes, the fee will increase by 4%. In addition, the Technical Advisor is entitled to be reimbursed for the fees, costs and expenses of conducting periodic inspections of the Vessels. Our Vessel was sold and the Manager will not receive a management fee or technical advisor fee for our Vessel.

Pursuant to a Designated Representative Agreement, CalPetro Holdings Limited (the "Designated Representative") was appointed to represent California Petroleum as its Designated Representative to act on its behalf with respect to certain administrative matters such as the filing of periodic reports and financial statements with the Securities and Exchange Commission. The fee payable to the Designated Representative (the "Designated Representative Fee") during the initial three year period described above was $15,000 per annum. The annual Designated Representative Fee increased to $20,000, $25,000 and $30,000 on April 1, 1999, April 1, 2004 and April 1, 2009, respectively. The Designated Representative Fee in 2011 includes a charge of $13,500 in respect of amounts under accrued in previous years.

Management fee expenses and management fees payable for the years ended and as of December 31, 2011, 2010 and 2009 are as follows:

(in thousands of $)	2011		2010		2009
Management fee expenses		21		16		45
Management fee payable		19		2		11

C.    Interests of experts and counsel

Not applicable.

Item 8.    FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See Item 18 "Financial Statements" below.

Legal Proceedings

To the best of the Company's knowledge, there are no legal or arbitration proceedings existing or pending which have had or may have significant effects on the Company's financial position or profitability and no such proceedings are pending or know to be contemplated by governmental authorities.

Dividend Policy

On October 3, 2011, pursuant to the Collateral Trust Agreement, excess funds held by the Trustee in the amount of $6.7 million allocable to the Company became available for release from the relevant trust account as a result of sufficient funds remaining on deposit at the Trustee for the payment in full of principal and interest on the Term Notes as they become due and were released to the Company on the same date. The Company paid a dividend of $6.7 million on December 15, 2011.

B. Significant Changes

None

Item 9.    THE OFFER AND LISTING

Not applicable.

9

Item 10.    ADDITIONAL INFORMATION

A.    Share Capital

Not applicable.

B.    Memorandum and Articles of Association

The Company is No. 23063B in the Bahamian register.

All shares issued are unclassified; there is no authorization in force to issue other classes of shares. Consequently all shares have equal entitlement to voting rights, dividends, profit shares and other rights and duties. Should any dividend be declared and not claimed the directors may, after a period of three years, resolve that such dividends are forfeited for the benefit of the Company. There are no provisions for changes to the rights of stockholders contained in the articles, except that by resolution of the directors the authorized capital may be increased and that the Company may divide or combine shares within the same class.

Directors may be interested in Company transactions but such interest should be disclosed to the other directors prior to agreement by the board or Company meeting as appropriate. The director concerned may not vote on the transaction. The directors have discretionary powers to borrow on behalf of the Company subject to the limits as set out in the Memorandum of Association. There are no stated age limits for directors and directors need not be stockholders. They do not retire by rotation.

Company meetings may be convened by the directors or held on request of members holding 50% of the voting shares. Members, their properly appointed proxies and corporate members representatives are entitled to attend. There are no limits to ownership of Company securities or to the exercise of voting rights. Disclosure of ownership is governed by Bahamian law and any laws operative in the jurisdictions pertaining to the owners of the securities. The directors of the Company may, without giving a reason, decline to register a transfer of shares.

C.    Material Contracts

In connection with the sale of the Vessel and the subsequent redemption of its allocable portion of the Term Notes and the Term Loan, the Company entered into an amendment to the Management and Remarketing Agreement between the Company and the Manager and to the Collateral Trust Agreement and agreements to terminate (i) its assignment of charter dated as of March 31, 2006 between the Company and CPTC; (ii) the assignment of earnings and insurances as of April 1, 1995 between the Company and CPTC; (iii) the assignment from the Company to CPTC, dated as of April 1, 1995, of the vessel purchase agreement dated as of April 1, 1995 between the Company and Chevron Transport Corporation; (iv) the debenture dated as of April 1, 1995 between the Company and CPTC; (v) the Bahamian statutory mortgage on the Vessel, dated as of June 28, 2001; (vi) the deed of covenants dated as of June 28, 2001 between the Company and CPTC to accompany the statutory mortgage and (vii) the term loan agreement dated as of April 1, 1995 between the Company and CPTC.

D.    Exchange Controls

The Company was registered under the International Business Companies Act, 1989 of the Commonwealth of The Bahamas, or the IBC Act, in May 1994.As a result of such registration the Company is exempt from the provisions of the Exchange Control Regulations Act of the Bahamas. Interests in the Registered Securities may be freely transferred among non-residents of The Bahamas under Bahamian Law.

There are no restrictions upon the payment of foreign (non-Bahamian) currency dividends, interest or other payments in respect of the Registered Securities.

The Company is not permitted to deal in the currency of the Bahamas except in an external Bahamian dollar account which can be funded only with foreign currency funds or funds the Company has permission to convert.

10

None of the Company's Articles of Association, Memorandum of Association or any other document, nor any Bahamian law nor, to the knowledge of the Company, any foreign law, imposes limitations on the right of non-residents or foreign owners to hold the Company's shares of common stock.

E.    Taxation

No Bahamian income or withholding taxes are imposed on the payment by the Company of any principal or interest to any holder of Notes who is either an individual citizen or resident of the United States or an entity formed under the laws of the United States. There is no income tax treaty currently in effect between the United States and The Bahamas but an exchange of information treaty on tax issues is in effect.

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 Commission. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, NE., Room 1580, Washington, D.C. 20549.You may obtain information on the operation of the public reference room by calling 1(800) SEC-0330.The Commission maintains a website (http://www.sec.gov.) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. In addition, documents referred to in this annual report may be inspected at registered office at Mareva House, 4 George Street, PO Box N-3937, Nassau, The Bahamas or at the offices of our Manager at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda HM 08.

I.      Subsidiary Information

Not applicable.

Item 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

(a) Quantitative information about market risk

As at December 31, 2011, we had no contractual obligations and commitments.

(b) Qualitative information about market risk

There is a concentration of credit risk with respect to Restricted Cash to the extent that all of the amounts are invested with The Bank of New York Mellon.

Item 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

11

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 December 31, 2011, the end of the period covered by this annual report. 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 December 31, 2011.

(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:

· 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, or 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, 2011.

12

(c)  Attestation report of the registered public accounting firm

Not applicable.

(d) Changes in internal controls 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 equity is neither listed nor publicly traded. The equity is held by one beneficial holder. Our obligations toward our bondholders are set out in detail in covenants contained in the Indenture for their Notes. Accordingly our board of directors has determined that the role played by an audit committee would have no applicability to us and we do not have any audit committee. The functions of the audit committee are performed by the full board of directors.

Item 16B.    CODE OF ETHICS

Our equity is neither listed nor publicly traded. The equity is held by one beneficial holder. Our obligations toward our bondholders are set out in detail in covenants contained in the Indenture for their Notes. Accordingly our board of directors has determined that the role played by a code of ethics would have no applicability to us and we have not adopted a code of ethics.

Item 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountant for 2011 and 2010 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 $)	2011		2010
Audit fees (a)		21		20
Audit related fees (b)		-		-
Tax fees (c)		-		-
All other fees (d)		-		-
Total		21		20

a)                      Audit Fees

Audit fees represent professional services rendered for the audit of the Company's 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 consist of assurance and related services rendered by the principal accountant related to the performance of the audit or review of the Company's 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

13

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

The Company's board of directors has assigned responsibility for the engagement of the auditors to the Company's manager.

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

Please refer to Item 16A above.

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

None.

Item 16F.    CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not applicable.

Item 16G.    CORPORATE GOVERNANCE

Not applicable.

Item 16H.  MINE SAFETY DISCLOSURES

Not applicable.

14

PART III

Item 17.    FINANCIAL STATEMENTS

Not applicable.

Item 18.    FINANCIAL STATEMENTS

The following financial statements and notes, together with the report of PricewaterhouseCoopers AS, are filed as part of this annual report.

	Page
Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers AS	F-1
Statements of Operations and Retained Earnings for the Years Ended	F-2
December 31, 2011, 2010 and 2009
Balance Sheets as of December 31, 2011 and 2010	F-3
Statements of Cash Flows for the Years Ended December 31, 2011, 2010 and 2009	F-4
Notes to the Financial Statements	F-5

Item 19.    EXHIBITS

1.1*	Certificate of Incorporation and Memorandum of Association of CalPetro Tankers (Bahamas III) Limited, incorporated by reference to Exhibit 3.3 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
1.2*	Articles of Association of CalPetro Tankers (Bahamas III) Limited, incorporated by reference to Exhibit 3.4 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.1*	Form of Term Indenture between California Petroleum Transport Corporation and Chemical Trust Company of California, as Indenture Trustee, incorporated by reference to Exhibit 4.1 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.2*	Form of Term Mortgage Notes, incorporated by reference to Exhibit 4.2 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.3*	Form of Bahamian Statutory Ship Mortgage and Deed of Covenants by [CalPetro Tankers (Bahamas I) Limited], [CalPetro Tankers (Bahamas II) Limited] to California Petroleum Transport Corporation (including the form of assignment of such Mortgage to Chemical Trust Company of California, as Collateral Trustee, by California Petroleum Transport Corporation), incorporated by reference to Exhibit 4.4 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.4*	Form of Assignment of Initial Charter Guarantee by [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] to California Petroleum Transport Corporation (including the form of Collateral Assignment of such Initial Charter Guarantee to Chemical Trust Company of California, as Collateral Trustee, by California Petroleum Transport Corporation), incorporated by reference to Exhibit 4.7 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.

15

2.5*	Form of Assignment of Earnings and Insurances from [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] to California Petroleum Transport Corporation, incorporated by reference to Exhibit 4.8 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.6*	Form of Assignment of Initial Charter from [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited[ [CalPetro Tankers (Bahamas III) Limited] to California Petroleum Transport Corporation (including the form of Collateral Assignment of such Initial Charter to Chemical Trust Company of California, as Collateral Trustee, by California Petroleum Transport Corporation), incorporated by reference to Exhibit 4.9 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.7*	Form of Management Agreement between P.D. Gram & Co., A.S., and [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited], incorporated by reference to Exhibit 4.10 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.8*	Form of Assignment of Management Agreement from [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited], incorporated by reference to Exhibit 4.11 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.10*	Form of Term Loan Agreement between California Petroleum Transport Corporation and [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited], incorporated by reference to Exhibit 4.13 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.11*	Form of Collateral Agreement between California Petroleum Transport Corporation [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited], the Indenture Trustee under the Serial Indenture, the Indenture Trustee under the Term Indenture and Chemical Trust Company of California, as Collateral Trustee, incorporated by reference to Exhibit 4.14 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
2.12*	Form of Issue of One Debenture from [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] to California Petroleum Transport Corporation, incorporated by reference to Exhibit 4.15 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
4.1*	Form of Initial Charter Guarantee by Chevron Corporation, incorporated by reference to Exhibit 10.1 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.

16

4.2*	Form of Bareboat Initial Charter between [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] and Chevron Transport Corporation, incorporated by reference to Exhibit 10.2 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
4.3*	Form of Vessel Purchase Agreement between [CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] and Chevron Transport Corporation (including the form of Assignment of such Vessel Purchase Agreement to California Petroleum Transport), incorporated by reference to Exhibit 10.3 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220.
4.4*	Bareboat Charter between Calpetro Tankers (Bahamas III) Limited and Front Voyager Inc. dated March 31, 2006.
4.5*	Assignment of Charter between Calpetro Tankers (Bahamas III) Limited and Front Voyager Inc. dated March 31, 2006.
4.6*	Amendment No. 2 to Management and Remarketing Agreement between CalPetro Tankers (Bahamas III) Limited and Frontline dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.7*	Amendment No. 2 to the Collateral Trust Agreement among CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, CalPetro Tankers (IOM) Limited, The Bank of New York Mellon Trust Company, N.A., as indenture trustee, The Bank of New York Trust Company, N.A., as collateral trustee and California Petroleum Transport Corporation, dated as of April 1, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.8*	Termination of Assignment of Charter between CalPetro Tankers (Bahamas III) Limited and California Petroleum Transport Corporation dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.9*	Termination of Statutory Mortgage between CalPetro Tankers (Bahamas III) Limited and The Bank of New York Mellon Trust Company, N.A., dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.10*	Termination of Deed of Covenants between CalPetro Tankers (Bahamas III) Limited and California Petroleum Transport Corporation dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.11*	Termination of Term Loan Agreement between CalPetro Tankers (Bahamas III) Limited and California Petroleum Transport Corporation dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.12*	Termination of Debenture between CalPetro Tankers (Bahamas III) Limited and California Petroleum Transport Corporation dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.13*	Termination of Assignment of Earnings and Insurances between CalPetro Tankers (Bahamas III) Limited and California Petroleum Transport Corporation dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
4.14*	Termination of Assignment of Purchase Agreement between CalPetro Tankers (Bahamas III) Limited and California Petroleum Transport Corporation dated as of April 8, 2010 filed April 29, 2010 on Form 20-F, Registration No. 33-79220.
10.1*	Powers of Attorney for directors and certain officers of CalPetro Tankers (Bahamas II) Limited, incorporated by reference to Exhibit 24.1 in the Registration Statement of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited, and CalPetro Tankers (IOM) Limited filed November 9, 1994 on Forms S-3, S-1 and F-1, Registration No. 33-79220

17

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	The following materials from CalPetro Tankers (Bahamas III) Limited's Annual Report on Form 20-F for the fiscal year ended December 31, 2011, formatted in eXtensible Business Reporting Language (XBRL): (i) Statements of Operations and Retained Earnings for the years ended December 31, 2011, 2010 and 2009; (ii) Balance Sheets as of December 31, 2011 and 2010; (iii) Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009; and (iv) Notes to Financial Statements.

* Incorporated by reference to the filing indicated.

18

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.

	CalPetro Tankers (Bahamas III) Limited.
	(Registrant)
Date: March 15, 2012	By:	/s/ Kate Blankenship
	Name:	Kate Blankenship
	Title:	Principal Financial Officer

19

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder

CalPetro Tankers (Bahamas III) Limited

We have audited the accompanying balance sheetsof CalPetro Tankers (Bahamas III) Limited (the "Company") as of December 31, 2011 and December 31, 2010 and the related statements of operations and retained earnings and of cash flows for each of the three years in the period ended December 31, 2011. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CalPetro Tankers (Bahamas III) Limited as of December 31, 2011 and December 31, 2010, the results of its operations and cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers AS

PricewaterhouseCoopers AS

Oslo, Norway

March 15, 2012

F-1

Calpetro Tankers (Bahamas III) Limited

Statements of Operations and Retained Earnings for the years ended December 31, 2011, 2010, and 2009

(in thousands of $)

	2011	2010		2009
Operating revenues
Charter revenue	-		2,588		2,863
Total operating revenues	-		2,588		2,863
Gain on sale of  asset	-		60		-
Administrative expenses	(158)		(108)		(136)
Depreciation	-		(87)		(241)
Total operating expenses	(158)		(195)		(377)
Net operating (loss) income	(158)		2,453		2,486
Other income (expenses)
Interest income	3		6		35
Interest expense	-		(261)		(937)
Other financial items	-		(3,011)		-
Amortization of deferred charges	-		(19)		(4)
Total other income (expenses)	3		(3,285)		(906)
Net (loss) income	(155)		(832)		1,580
Retained earnings at the start of the year	7,694		8,526		6,946
Dividend	(6,700)		-		-
Retained earnings at the end of the year	839		7,694		8,526

The accompanying notes are an integral part of these financial statements.

F-2

CalPetro Tankers (Bahamas III) Limited

Balance Sheets as of December 31, 2011 and 2010

(in thousands of $)

	2011		2010
ASSETS
Current Assets:
Restricted cash and investments		941		7,727
Total assets		941		7,727
LIABILITIES AND EQUITY
Current liabilities:
Other current liabilities		102		33
Total liabilities		102		33
Equity:
Unclassified stock: 100 shares of $1 par value		-		-
Retained earnings		839		7,694
Total equity		839		7,694
Total liabilities and equity		941		7,727

The accompanying notes are an integral part of these financial statements.

F-3

Calpetro Tankers (Bahamas III) Limited

Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009

(in thousands of $)

	2011			2010			2009
Net (loss) income		(155	)		(832	)		1,580
Adjustments to reconcile net (loss) income with net cash (used in) provided by operating activities:
Depreciation		-			87			241
Amortization of deferred charges		-			19			4
Gain on sale of asset		-			(60	)		-
Other, net		-			(538	)		-
Changes in operating assets and liabilities:
Interest receivable		-			-			15
Other current assets		-			2,325			(1,041	)
Accrued interest		-			(232	)		(10	)
Other current liabilities		69			(29	)		3
Net cash (used in) provided by operating activities		(86	)		740			792
Investing activities
Proceeds from sale of asset		-			8,560			-
Change in restricted cash and investments		6,786			1,584			(348	)
Net cash provided by (used in) investing activities		6,786			10,144			(348	)
Financing activities
Repayment of debt		-			(10,884	)		(444	)
Dividend paid		(6,700	)		-			-
Net cash used in financing activities		(6,700	)		(10,884	)		(444	)
Net change in cash and cash equivalents		-			-			-
Cash and cash equivalents at beginning of year		-			-			-
Cash and cash equivalents at end of year		-			-			-
Supplemental disclosure of cash flow information:
Interest paid		-			464			946

The accompanying notes are an integral part of these financial statements.

F-4

CalPetro Tankers (Bahamas III) Limited

Notes to the Financial Statements

1.   DESCRIPTION OF BUSINESS

CalPetro Tankers (Bahamas III) Limited (the "Company") was incorporated in The Bahamas on May 13, 1994 with two other entities: CalPetro Tankers (Bahamas I) Limited and CalPetro Tankers (Bahamas II) Limited. In addition CalPetro Tankers (IOM) Limited, was incorporated in the Isle of Man. These entities (the "Owners") were organized as special purpose companies for the purpose of acquiring one of four oil tankers (each a "Vessel", together the "Vessels") from Chevron Transport Corporation ("Chevron") which were concurrently chartered on long-term charter agreements back to Chevron. On April 21, 2005, pursuant to the bareboat charter dated April 5, 1995 between the Company and Chevron, the Company received irrevocable notice from Chevron regarding the termination of the bareboat charter of its Vessel Front Voyager, on April 1, 2006. Under the terms of the bareboat charter between Chevron and the Company, Chevron paid a termination fee of $5,050,000. As manager to the Company, Frontline Ltd ("Frontline") was obligated to find an acceptable replacement charter as defined by the indenture governing the issue of the Notes that were issued on behalf of the Company and three affiliated companies. Pursuant to a bareboat charter agreement between the Company and Front Voyager Inc, a wholly owned subsidiary of Frontline, Front Voyager Inc (the "Charterer") agreed to charter the Front Voyager as of April 1, 2006 for an initial two-year period (the "Initial Period") with a further seven annual optional periods. The charterhire payable for the Initial Period was $5,050,000. This was prepaid in full on March 31, 2006. On March 25, 2009, the Charterer exercised its option to extend the charter for the second one year optional period beginning April 1, 2009 at a cost of $1.8 million.  On January 5, 2010, the Charterer gave notice that it would terminate the charter and paid a termination fee of $4.9 million on April 1, 2010, of which $2.6 million was recognized in the income statement in 2010 in accordance with the bareboat charter. A Memorandum of Agreement, dated March 15, 2010, was signed regarding the sale of our vessel for net sale proceeds of $8.3 million and delivery to the buyer occurred on April 8, 2010.

The Company along with CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, and CalPetro Tankers (IOM) Limited are wholly-owned by California Tankers Investments Limited, a company organized under the laws of The Bahamas, which is in turn a wholly-owned subsidiary of CalPetro Holdings Limited, an Isle of Man company. CalPetro Holdings Limited is a wholly-owned subsidiary of Independent Tankers Corporation ("ITC"), a Cayman Islands company. ITC is wholly-owned by Independent Tankers Corporation Limited ("ITCL"). ITCL was established in February 2008 and it is 82.47% owned by Frontline, a Bermuda company whose shares are listed on the New York Stock Exchange, London Stock Exchange and Oslo Stock Exchange.

California Petroleum Transport Corporation ("California Petroleum" or "CPTC"), a Delaware corporation, acting as agent on behalf of the Owners, issued as full recourse obligations $167,500,000 Serial First Preferred Mortgage Notes (the "Serial Notes") and $117,900,000 8.52% First Preferred Mortgage Notes due 2015 (the "Term Notes") (together the "Notes"). The proceeds from the sale of the Notes were applied by way of long-term loans, being Serial Loans in respect of the Serial First Preferred Mortgage Notes and Term Loans in respect of the First Preferred Mortgage Notes due 2015, to the Owners to fund the acquisition of their Vessels from Chevron. The Company was allocated $27,640,000 of the Serial Loans and $12,744,000 of the Term Loans and acquired its Vessel, the Front Voyager. The Serial Notes and the Term Notes were fully repaid April 1, 2006 and April 13, 2010, respectively. The Company engaged in no business other than the ownership and chartering of our Vessel and activities resulting from or incidental to such ownership and chartering.

2.   ACCOUNTING POLICIES

Basis of Presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). 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.

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Vessel

The cost of the vessel less estimated residual value is depreciated on a straight-line basis over the vessel's estimated remaining economic useful life, which is 2015.

Gain on sale of asset

A gain on the sale of asset was recognized when the Vessel was delivered and all risks were transferred and is determined by comparing the net sale proceeds received with the carrying value of the Vessel.

Vessel residual values

On July 1, 2009, the Company effected a change in estimate related to the estimated scrap rate for its vessel. The scrap rate was amended from $378 per lightweight ton to $281per lightweight ton. The resulting change in salvage values has been applied prospectively and increased depreciation by $0.2 million for the year ended December 31, 2009. This change also resulted in a decrease in net income of approximately $0.2 million in 2009.

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 differences between the asset's carrying value and fair value less estimated costs to sell.

Interest payable recognition

Interest payable on the Term Loans is accrued on a daily basis.

Deferred charges

Deferred charges comprise expenses incurred in connection with the structuring of the financing transactions and issuance of debt. Such expenses are being amortized over the life of the debt on a straight line basis, which is not materially different to the effective interest rate method.

Taxation

No Bahamian income or withholding taxes are imposed on the payment by the Company of any principal or interest to any holder of Notes who is either an individual citizen or resident of the United States or an entity formed under the laws of the United States. There is no income tax treaty currently in effect between the United States and Bahamas.

Reporting and functional currency

The reporting currency is United States dollars. The functional currency is United States dollars.

Revenue and expense recognition

Revenues and expenses are recognized on the accrual basis. Revenue was substantially generated from bareboat charter hires and was recorded over the term of the charter as service was provided. Interest payable on the Term Notes is accrued on a daily basis.

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 long-term debt, standard market conventions and techniques 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.

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3.   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs". In general, ASU 2011-04 clarifies the FASB's intent about the application of existing fair value measurement and disclosure requirements, and for many of these requirements the amendments are not intended to result in any change in the application of Accounting Standards Codification ("ASC") Topic 820 ("Fair Value Measurement"). At the same time, there are some amendments that do change particular principles or requirements relating to fair value measurement and disclosure.  ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. Its adoption is not expected to have a material impact on the Company's disclosures or financial position, results of operations, and cash flows.

In June 2011, the FASB issued ASU 2011-05 "Presentation of Comprehensive Income" in order to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity, and requires entities to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 is effective for fiscal years beginning after December 15, 2011, although early adoption is permitted. Its adoption will affect the presentation of the Company's financial statements, but is not expected to have a material impact on the Company's disclosures or financial position, results of operations, and cash flows. ASU 2011-05 also included the requirement to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) in which the components of net income and the components of other comprehensive income are presented. Owing to concerns raised about difficulties in its implementation, this latter requirement has been deferred for further consideration, through the issue by the FASB in December 2011 of ASU 2011-12 "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05".  Its adoption is not expected to have a material impact on the Company's disclosures or financial position, results of operations, and cash flows.

In December 2011, the FASB issued ASU 2011-11 "Disclosures about Offsetting Assets and Liabilities" in order to standardize the disclosure requirements under US GAAP and IFRS relating to both instruments and transactions eligible for offset in financial statements. ASU 2011-11 is applicable for annual reporting periods beginning on or after January 1, 2013. Its adoption is not expected to have a material impact on the Company's disclosures.

4.   SEGMENT INFORMATION

The Company has only one reportable segment.

5.   RESTRICTED CASH AND INVESTMENTS

The restricted cash and investment accounts were established and are maintained by The Bank of New York Mellon (formerly the Chase Manhattan Trust Company of California and JPMorgan Chase) as the collateral trustee who maintains the accounts as collateral agent for the equal and ratable benefit of the holders of the Term Notes. Charterhire payments are deposited into a revenue account and these funds can only be used to fund the principal and interest due on the Term Notes and any operating costs in relation to operating the Owners.

6.   VESSEL

(in thousands of $)	2011		2010
Reinstatement of vessel		-		8,452
Accumulated depreciation		-		(490	)
Disposal		-		(7,962)
Net book value at end of year		-		-

F-7

Depreciation expense was nil, $0.08 million and $0.2 million for the years ended December 31, 2011, 2010 and 2009, respectively. On March 15, 2010, Front Voyager was sold for net proceeds of $8.3 million and delivery took place in April 2010.

7.   DEBT

On April 1, 2010 the Company paid the annual debt installment of $0.7 million. On April 13, 2010 the Company redeemed the remaining principal amount of the CPTC 8.52% First Preferred Mortgage Term Notes in connection with the sale of Front Voyager.

In addition, a make whole premium of $2.1 million for the early redemption of debt was also paid in April 2010. Fees of $0.9 million relating to the consent solicitation process relating to the sale of Front Voyager and its release from the collateral securing the Notes, and the redemption and cancellation of the portion of the outstanding principal amount of the Notes allocated to the Front Voyager were incurred in April 2010. These fees were recorded in Other financial items.

8.   SHARE CAPITAL

Authorized share capital:

	2011		2010
1,000 shares of $1 par value		1,000		1,000

Issued and outstanding share capital:

	2011		2010
100 common shares of $1 par value		100		100

9.   FINANCIAL INSTRUMENTS

Fair values

The carrying value and estimated fair value of the Company's financial instruments at December 31, 2011 and 2010 are as follows:

(in thousands of $)	2011 Fair  value		2011 Carrying value		2010 Fair value		2010 Carrying value
Financial assets:
Restricted cash and investments		941		941		7,727		7,727

The estimated fair values of financial assets are as follows:

(in thousands of $)	2011 Fair value		Level 1		Level 2		Level 3
Financial assets:
Restricted cash and investments		941		941		-		-

F-8

The following methods and assumptions were used to estimate the fair value of each class of financial instrument;

Restricted cash and investments - the carrying value is a reasonable estimate of fair value.

Concentrations of risk

There is a concentration of credit risk with respect to Restricted Cash to the extent that all of the amounts are invested with The Bank of New York Mellon.

10.   RELATED PARTY TRANSACTIONS

Charterhire revenue

The Company entered into a two year bareboat charter agreement with Front Voyager Inc. on April 1, 2006. On January 5, 2010 Front Voyager Inc. gave irrevocable notice of termination of the bareboat charter for the single hull vessel Front Voyager, which took effect on April 1, 2010. Front Voyager Inc paid a termination fee of $4.9 million in accordance with the charter. The following table outlines the revenue and payments related to the charter agreement during the year:

(in thousands of $)	2011		2010		2009
Accrued income – January 1		-		2,324		1,283
Charter hire paid during the year		-		(4,912)		(1,822)
Charter hire revenue recognized in year		-		2,588		2,863
Accrued income – December 31		-		-		2,324

Management Fee

Pursuant to a management agreement, Frontline is the Company's Manager and Technical Advisor. Under the management agreement, Frontline is entitled to a Management Fee and a Technical Advisor's Fee.

Under the terms of the management agreement, the Management Fee consists of a fee of $13,625 initially per annum for the Vessel, together with an additional annual fee of $3,000 covering all four Vessels, payable semi-annually in arrears for the period until the third anniversary of the closing of the Notes issue then increasing by four percent on each subsequent anniversary of the closing of the issue of the Notes.

The Technical Advisor's Fee was initially $10,000 per annum for each Vessel, payable semi-annually in arrears, during the initial first three year period as described above. On each subsequent anniversary of the closing of the issue of the Notes, the fee will increase by 4%. In addition, the Technical Advisor is entitled to be reimbursed for the fees, costs and expenses of conducting periodic inspections of the Vessels. Our Vessel was sold and the Manager will not receive a management fee or technical advisor fee for our Vessel.

Pursuant to a Designated Representative Agreement, CalPetro Holdings Limited (the "Designated Representative") was appointed to represent California Petroleum as its Designated Representative to act on its behalf with respect to certain administrative matters such as the filing of periodic reports and financial statements with the Securities and Exchange Commission. The fee payable to the Designated Representative (the "Designated Representative Fee") during the initial three year period described above was $15,000 per annum. The annual Designated Representative Fee increased to $20,000, $25,000 and $30,000 on April 1, 1999, April 1, 2004 and April 1, 2009, respectively. The Designated Representative Fee in 2011 includes a charge of $13,500 in respect of amounts under accrued in previous years.

Management fee expenses and management fee payable for the years ended and as of December 31, 2011, 2010, and 2009 are as follows:

(in thousands of $)	2011		2010		2009
Management fee expenses		21		16		45
Management fee payable		19		2		11

11.   COLLATERAL ARRANGEMENT

The Company is jointly and severally liable with the other Owners for all the Owners obligations and liabilities in relation to the Term Loans but only to the extent of the proceeds received by California Petroleum Transport Corporation from California Petroleum Transport Corporation's right, title and interest in and to the collateral.

On October 3, 2011, pursuant to the Collateral Trust Agreement, excess funds held by the Trustee in the amount of $6.7 million allocable to the Company became available for release from the relevant trust account as a result of sufficient funds remaining on deposit at the Trustee for the payment in full of principal and interest on the Term Notes as they become due and were released to the Company on the same date.

12.   DIVIDEND

The Company paid a dividend of $6.7 million on December 15, 2011.

F-9