-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 KnPADIs/XWKJ+czaXKsIlUx3Z1e5VfV3+vdldDOywUrgfdo7mwJa60TPy87r4/t1
 X2Y1Ph+X6tLp0o7onhycKg==

<SEC-DOCUMENT>0000911971-01-500032.txt : 20010815
<SEC-HEADER>0000911971-01-500032.hdr.sgml : 20010815
ACCESSION NUMBER:		0000911971-01-500032
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010630
FILED AS OF DATE:		20010814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEEKAY SHIPPING CORP
		CENTRAL INDEX KEY:			0000911971
		STANDARD INDUSTRIAL CLASSIFICATION:	DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412]
		STATE OF INCORPORATION:			C5
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12874
		FILM NUMBER:		1709760

	BUSINESS ADDRESS:	
		STREET 1:		TK HOUSE, BAYSIDE EXECUTIVE PARK
		STREET 2:		WEST BAY ST & BLAKE RD, PO BOX AP-59213
		CITY:			NASSAU BAHAMAS
		STATE:			C5
		ZIP:			00000
		BUSINESS PHONE:		8093228020

	MAIL ADDRESS:	
		STREET 1:		TK HOUSE, BAYSIDE EXECUTIVE PARK
		STREET 2:		WEST BAY ST & BLAKE RD, PO BOX AP-59213
		CITY:			NASSAU BAHAMAS
		STATE:			C5
		ZIP:			00000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VIKING STAR SHIPPING INC
		DATE OF NAME CHANGE:	19930914
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6k_063001.htm
<TEXT>
<HTML>
<HEAD>
<TITLE> Teekay Shipping Corporation </TITLE>
</HEAD>
<BODY>






<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5.5>UNITED STATES
<BR>SECURITIES AND EXCHANGE COMMISSION</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4.5>WASHINGTON,
D.C. 20549</FONT></H1>
<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5>FORM 6-K</FONT></H1>

<CENTER>                                                   Report of Foreign Private Issuer<BR><BR>

                                                 Pursuant to Rule 13a-16 or 15d-16 of<BR>
                                                  the Securities Exchange Act of 1934<BR><BR>




                                           For the quarterly period ended <U>June 30, 2001</U><BR><BR><BR>



<FONT FACE="Times New Roman, Times, Serif" SIZE=5>    <B>TEEKAY SHIPPING CORPORATION</B></FONT><BR>
                                        (Exact name of Registrant as specified in its charter)<BR><BR><BR>


                                                               TK House<BR>
                                                        Bayside Executive Park<BR>
                                                     West Bay Street &amp; Blake Road <BR>
                                                  P.O. Box AP-59213, Nassau, Bahamas<BR>
                                                (Address of principal executive office)<BR><BR><BR>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.] </FONT></P>

                                 Form 20-F&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>      &nbsp;&nbsp;&nbsp;&nbsp;Form 40- F&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR><BR><BR>




<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.] </FONT></P>

                                        Yes&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;                     No &nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR><BR><BR>




<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[If
&#147;Yes&#148; is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-_______ ] </FONT></P></CENTER>

<PAGE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY
SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                          REPORT ON FORM 6-K FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001</FONT></H1>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>INDEX</U></FONT></H1>

<PRE>
PART I:   FINANCIAL INFORMATION                                                                             <U>PAGE</U>

Item 1.  Financial Statements

                Independent Accountant's Report........................................................         3

                Consolidated Statements of Income
                       for the three and six months ended June 30, 2001 and 2000.......................         4

                Consolidated Balance Sheets
                       June 30, 2001 and December 31, 2000.............................................         5

                Consolidated Statements of Cash Flows
                       for the six months ended June 30, 2001 and 2000.................................         6

                Consolidated Statement of Changes in Stockholders' Equity
                       for the six months ended June 30, 2001..........................................         7

                Notes to Consolidated Financial Statements.............................................         8

                Schedule A to the Consolidated Financial Statements....................................        13


Item 2.  Management's Discussion and Analysis of Financial Condition
                and Results of Operations..............................................................        18

Item 3.  Market Rate Risks.............................................................................        24

PART II: OTHER INFORMATION.............................................................................        26

SIGNATURES.............................................................................................        28


</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INDEPENDENT
ACCOUNTANT&#146;S REVIEW REPORT ON INTERIM<BR>

FINANCIAL STATEMENTS</FONT></H1>

<p ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the Shareholders and Board of Directors of<BR>
<B>Teekay Shipping Corporation</B></FONT></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have reviewed the
accompanying consolidated balance sheet of Teekay Shipping Corporation and
subsidiaries as of June 30, 2001, and the related consolidated statement of
income for the three- and six-month periods ended June 30, 2001 and 2000, and
the consolidated statements of cash flows for the six-month periods ended June
30, 2001 and 2000, and the consolidated statements of changes in
stockholders&#146; equity for the six-month period ended June 30, 2001. Our
review also included Schedule A listed in Index Item 1. These financial
statements and schedule are the responsibility of the Company&#146;s management. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We were furnished with the
report of other accountants on their review of the interim information of Ugland
Nordic Shipping ASA, whose total assets as of June 30, 2001 and whose net voyage
revenues for the period from acquisition constituted 21 percent and 7 percent,
respectively, of the consolidated totals. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conducted our reviews in
accordance with standards established by the American Institute of Certified
Public Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with auditing
standards generally accepted in the United States, which will be performed for
the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based on our reviews and
the report of other accountants, we are not aware of any material modifications
that should be made to the accompanying consolidated financial statements and
schedule referred to above for them to be in conformity with accounting
principles generally accepted in the United States. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have previously audited,
in accordance with auditing standards generally accepted in the United States,
the consolidated balance sheet of Teekay Shipping Corporation and subsidiaries
as of December 31, 2000, and the related consolidated statements of income,
changes in stockholders&#146; equity and cash flows for the year then ended, not
presented herein, and in our report dated February 16, 2001 (except for note 13
which is as of March 6, 2001), we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying consolidated balance sheet and related schedule as of December
31, 2000, is fairly stated, in all material respects, in relation to the
consolidated balance sheet and schedule from which they have been derived. </FONT></P>
<BR><BR><BR>
<PRE>
Vancouver, Canada,                                                     /s/ ERNST &amp; YOUNG LLP
July 19, 2001                                                          Chartered Accountants
(except for note 13 which is as of  August 1, 2001)

</PRE>

<PAGE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                          CONSOLIDATED STATEMENTS OF INCOME<BR>
                              (in thousands of U.S. dollars, except per share amounts)</font></h1><BR>

<BR>



<PRE>
                                                <B>Three Months Ended June 30,              Six Months Ended June 30,
                                                  2001                 2000               2001                2000
                                                   $                    $                  $                    $
                                           ------------------- ------------------- ------------------- ------------------
                                                        (unaudited)                             (unaudited)</B>
<B>NET VOYAGE REVENUES</B>
Voyage revenues                                  276,048             201,200             583,934             383,462
Voyage expenses                                   62,227              58,580             124,957             120,775
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

Net voyage revenues                              213,821             142,620             458,977             262,687
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

<B>OPERATING EXPENSES</B>
Vessel operating expenses                         39,274              34,723              73,153              69,492
Time-charter hire expense                         16,346              13,114              33,529              26,080
Depreciation and amortization                     36,100              24,624              63,621              49,666
General and administrative                        11,761               9,059              22,599              18,581
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------
                                                 103,481              81,520             192,902             163,819
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

<B>Income from vessel operations</B>                    110,340              61,100             266,075              98,868
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

<B>OTHER ITEMS</B>
Interest expense                                 (18,080)              (19,275)          (32,866)            (39,265)
Interest income                                    2,849               4,137               5,652               7,390
Other income (loss) (note 10)                      1,132                 785               2,068                (307)
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------
                                                 (14,099)            (14,353)            (25,146)            (32,182)
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

<B>Net income</B>                                        96,241              46,747             240,929              66,686
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

<B>Earnings per common share</B> (note 8)
     - Basic                                        2.42                1.22                6.10                1.75
     - Diluted                                      2.35                1.19                5.95                1.72
- ------------------------------------------ ------------------- ------------------- ------------------- ------------------

  <I>The accompanying notes are an integral part of the consolidated financial statements.</I>


</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                             CONSOLIDATED BALANCE SHEETS<BR>
                                           (in thousands of U.S. dollars)</font></h1><BR>


<PRE>
                                                                                 <B> As at                 As at
                                                                                 June 30,            December 31,
                                                                                   2001                  2000
                                                                                     $                    $
                                                                           ---------------------- -------------------
                                                                                (unaudited)</B>
      <B>ASSETS
      Current</B>
      Cash and cash equivalents                                                  304,222                 181,300
      Marketable securities (note 3)                                               7,180                   8,081
      Accounts receivable                                                         70,139                  80,158
      Prepaid expenses and other assets                                           29,657                  25,956
      -------------------------------------------------------------------- ---------------------- -------------------

      <B>Total current assets</B>                                                       411,198                 295,495
      -------------------------------------------------------------------- ---------------------- -------------------

      Marketable securities (note 3)                                              35,196                  33,742
      <B>Vessels and equipment</B>
           At cost, less accumulated depreciation of $741,431
           (December 31, 2000 - $680,756) (note 7)                             1,971,865               1,607,716
      Advances on newbuilding contracts (notes 7 and 9)                           56,704                       -
      -------------------------------------------------------------------- ---------------------- -------------------

      <B>Total vessels and equipment</B>                                              2,028,569               1,607,716
      -------------------------------------------------------------------- ---------------------- -------------------
      Investment in joint ventures                                                46,516                  20,474
      Other assets                                                                22,361                  16,672
      Goodwill (note 4)                                                           89,361                       -
      -------------------------------------------------------------------- ---------------------- -------------------

                                                                               2,633,201               1,974,099
      -------------------------------------------------------------------- ---------------------- -------------------

      <B>LIABILITIES AND STOCKHOLDERS' EQUITY
      Current</B>
      Accounts payable                                                            22,430                  22,084
      Accrued liabilities                                                         40,082                  44,081
      Current portion of long-term debt (note 7)                                  93,118                  72,170
      -------------------------------------------------------------------- ---------------------- -------------------

      <B>Total current liabilities</B>                                                  155,630                 138,335
      -------------------------------------------------------------------- ---------------------- -------------------
      Long-term debt (note 7)                                                  1,084,863                 725,314
      Other long-term liabilities (note 6)                                        38,111                   7,368
      -------------------------------------------------------------------- ---------------------- -------------------

      <B>Total liabilities</B>                                                        1,278,604                 871,017
      -------------------------------------------------------------------- ---------------------- -------------------

<B>Minority interest</B>                                                           18,740                   4,570

<B>Stockholders' equity</B>
      Capital stock (note 8)                                                     473,135                 452,808
      Retained earnings                                                          865,378                 641,149
      Accumulated other comprehensive (loss) income                               (2,656)                  4,555
      -------------------------------------------------------------------- ---------------------- -------------------

      <B>Total stockholders' equity</B>                                               1,335,857               1,098,512
      -------------------------------------------------------------------- ---------------------- -------------------

                                                                               2,633,201               1,974,099
      -------------------------------------------------------------------- ---------------------- -------------------

         Commitments and contingencies (note 9)

         <I>The accompanying notes are an integral part of the consolidated financial statements.</I>
</PRE>

<PAGE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                        CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
                                           (in thousands of U.S. dollars)</font></h1><BR>


<PRE>
                                                                                     <B>Six Months Ended June 30,
                                                                                    2001                    2000
                                                                                     $                       $
                                                                           ----------------------- -----------------------
                                                                                            (unaudited)</B>
Cash and cash equivalents provided by (used for)

<B>OPERATING ACTIVITIES</B>
Net income                                                                         240,929                  66,686
Non-cash items:
     Depreciation and amortization                                                  63,621                  49,666
     Loss on disposition of vessels and equipment                                        -                   1,004
     Gain on disposition of available-for-sale securities                           (1,944)                      -
     Equity income (net of dividends received: June 30, 2001 - $5,000;                (394)                    962
        June 30, 2000 - $2,975)
     Future income taxes                                                             3,090                   1,000
     Other - net                                                                       258                    (122)
Change in non-cash working capital items related to
     operating activities                                                          (10,856)                 (7,226)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from operating activities</B>                                            294,704                 111,970
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                                                   529,733                  11,000
Scheduled repayments of long-term debt                                             (40,886)                (16,861)
Prepayments of long-term debt                                                     (378,735)               (145,726)
Proceeds from issuance of Common Stock                                              20,323                   3,722
Cash dividends paid                                                                (16,894)                (16,387)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from financing activities</B>                                            113,541                (164,252)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                                            (114,531)                (35,066)
Expenditures for drydocking                                                         (8,049)                 (3,561)
Proceeds from disposition of assets                                                      -                   9,710
Expenditure for purchase of Ugland Nordic Shipping ASA (net of cash
    acquired of $26,605)                                                          (176,453)                      -
Acquisition costs related to purchase of Ugland Nordic Shipping ASA                   (888)                      -
Acquisition costs related to purchase of Bona Shipholding Ltd.                         (20)                 (2,127)
Proceeds from disposition of available-for-sale securities                          14,618                       -
Purchases of available-for-sale securities                                               -                 (10,878)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from investing activities</B>                                           (285,323)                (41,922)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Increase (decrease) in cash and cash equivalents</B>                                   122,922                 (94,204)
Cash and cash equivalents, beginning of the period                                 181,300                 220,327
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Cash and cash equivalents, end of the period</B>                                       304,222                 126,123
- -------------------------------------------------------------------------- ----------------------- -----------------------

  <I>The accompanying notes are an integral part of the consolidated financial statements.</I>


</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY<BR>
                                          (in thousands of U.S. dollars)</font></h1><BR>

<PRE>
                                                                                      <B>Accumulated
                                                                                         Other
                                                                                        Compre-
                                                   Thousands                            hensive       Compre-           Total
                                                   of Common    Common    Retained       Income       hensive        Stockholders'
                                                    Shares       Stock    Earnings       (Loss)       Income           Equity
                                                       #           $          $             $            $                $</B>
- ------------------------------------------------- ------------ ---------- ---------- -------------- ------------ ---------------

<B>Balance as at December 31, 2000</B>                      39,145    452,808     641,149        4,555                     1,098,512
- ------------------------------------------------- ------------ ---------- ---------- -------------- ------------ ---------------

Net income                                                                 240,929                     240,929        240,929
Other comprehensive income:
  Unrealized loss on available-for-sale securities
    (note 3)                                                                             (3,565)        (3,565)        (3,565)
  Reclassification adjustment for gain on
    available-for-sale securities included in net income
    (note 3)                                                                             (4,427)        (4,427)        (4,427)
  Cumulative effect of accounting change (note 11)                                        4,155          4,155          4,155
  Unrealized loss on derivative instruments
    (note 11)                                                                            (2,717)        (2,717)        (2,717)
  Reclassification adjustment for gain on
    derivative instruments (note 11)                                                       (657)          (657)          (657)
                                                                                                    ------------
Comprehensive income                                                                                   233,718
                                                                                                    ------------
Adjustment for equity income on step
    acquisition (note 2)                                                       198                                        198
Dividends declared                                                         (16,898)                                   (16,898)
Reinvested dividends                                      1           4                                                     4
Exercise of stock options                               904      20,323                                                20,323
- ------------------------------------------------- ------------ ---------- ---------- -------------- ------------ ---------------

<B>Balance as at June 30, 2001 (unaudited)</B>              40,050     473,135    865,378       (2,656)                    1,335,857
- ------------------------------------------------- ------------ ---------- ---------- -------------- ------------ ---------------

  <I>The accompanying notes are an integral part of the consolidated financial statements.</I>

</PRE>




<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY
SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
                    (all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
(Information as at June 30, 2001 and for the Three- and Six-Month Periods <BR>
Ended June 30, 2001 and 2000 is unaudited)</FONT></h1>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. Basis of
Presentation</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying unaudited
interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States and the rules and regulations of the Securities and Exchange
Commission. They include the accounts of Teekay Shipping Corporation
(&#147;Teekay&#148;), which is incorporated under the laws of the Republic of
the Marshall Islands, and its wholly owned or controlled subsidiaries (the
&#147;Company&#148;). Certain information and footnote disclosures required by
generally accepted accounting principles for complete annual financial
statements have been omitted and, therefore, it is suggested that these interim
financial statements be read in conjunction with the Company&#146;s audited
financial statements for the year ended December 31, 2000. In the opinion of
management, these statements reflect all adjustments (consisting only of normal
recurring accruals), necessary to present fairly, in all material respects, the
Company&#146;s consolidated financial position, results of operations, cash
flows, and changes in stockholders&#146; equity for the interim periods
presented. The results of operations for the three- and six-month periods ended
June 30, 2001 are not necessarily indicative of those for a full fiscal year.</FONT></p>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. Acquisition
of Ugland Nordic Shipping ASA</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of June 30, 2001, Teekay
had purchased 100% of the issued and outstanding shares
of Ugland Nordic Shipping ASA (&#147;UNS&#148;) (nine percent of which was
purchased in fiscal 2000 and 56% of which was purchased in the three-month
period ended March 31, 2001), for $222.8 million cash, including estimated
transaction expenses of approximately $7 million, or at an average price of
Norwegian Kroner 136 per share. UNS controls a modern fleet of 18 shuttle
tankers (including three newbuildings) that engage in the transportation of oil
from offshore production platforms to onshore storage and refinery facilities.</FONT></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The acquisition of UNS has
been accounted for using the purchase method of
accounting, based upon preliminary estimates of fair value. UNS&#146; operating
results are reflected in these financial statements commencing March 6, 2001,
the date Teekay acquired control. Equity income related to the Company&#146;s
nine percent interest in UNS up to December 31, 2000 has been credited as an
adjustment to retained earnings. Teekay&#146;s interest in UNS for the period
from January 1, 2001 to March 5, 2001 has been included in equity income for the
corresponding period.</FONT></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table shows
comparative summarized consolidated pro forma financial
information for the six-month periods ended June 30, 2001 and 2000 and gives
effect to the acquisition of 100% of the outstanding shares in UNS as if it had
taken place January 1, 2000:</FONT></p>


<PRE>
                                                                                              <B>Pro Forma
                                                                                              Six Months
                                                                                            Ended June 30,
                                                                                         2001            2000
                                                                                          $               $</B>
          ------------------------------------------------------------------------- --------------- ---------------
          Net voyage revenues                                                           475,237         294,713
          Net income                                                                    240,925          60,836
          Net income per common share
          - basic                                                                          6.10            1.60
          - diluted                                                                        5.95            1.57
          ------------------------------------------------------------------------- --------------- ---------------


</PRE>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. Marketable
Securities</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s investments in marketable securities are classified as
available-for-sale securities and are carried at fair value. Net unrealized
gains or losses on available-for-sale securities, if material, are reported as a
separate component of stockholders&#146; equity.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. Goodwill</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Goodwill
acquired as a result of the acquisition of UNS (see Note 2) is amortized over 20
years using the straight-line method. Management periodically reviews goodwill
for permanent diminution in value. As at June 30, 2001, goodwill is net of
accumulated amortization of $1.2 million.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. Cash Flows</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Cash
interest paid during the six-month periods ended June 30, 2001 and 2000 totalled
approximately $35.2 million and $39.7 million, respectively.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6. Income Taxes</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
legal jurisdictions of the countries in which Teekay and the majority of its
subsidiaries are incorporated do not impose income taxes upon shipping-related
activities. Teekay&#146;s Australian ship-owning subsidiaries and Norwegian
subsidiary UNS are subject to income taxes (see Note 10). Included in other
long-term liabilities are deferred income taxes of $34.4 million at June 30,
2001 and $4.2 million at December 31, 2000. The Company accounts for such taxes
using the liability method pursuant to Statement of Financial Accounting
Standards No. 109, &#148; Accounting for Income Taxes&#148;.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7. Long-Term
Debt</FONT></H2>

<PRE>
                                                                                  <B>June 30,          December 31,
                                                                                    2001                2000
                                                                                      $                   $</B>
                                                                             -------------------- ------------------

         Revolving Credit Facilities........................................       310,098              415,800
         First Preferred Ship Mortgage Notes (8.32%)
           due through 2008.................................................       167,229              189,274
         Term Loans due through 2009 .......................................       450,654              192,410
         Senior Notes (8.875%) due July 15, 2011 ...........................       250,000                    -
                                                                             -------------------- ------------------
                                                                                 1,177,981              797,484
         Less current portion...............................................        93,118               72,170
                                                                             -------------------- ------------------
                                                                                 1,084,863              725,314
                                                                             ==================== ==================
</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Company has two long-term Revolving Credit Facilities (the
&#147;Revolvers&#148;) available which, as at June 30, 2001, provided for
borrowings of up to $537.0 million. Interest payments are based on LIBOR (June
30, 2001: 3.84%; December 31, 2000: 6.40%) plus a margin depending on the
financial leverage of the Company; at June 30, 2001 and December 31, 2000, the
margins ranged between 0.50% and 0.85%. The amount available under the Revolvers
reduces semi-annually with final balloon reductions in 2006 and 2008. The
Revolvers are collaterized by first priority mortgages granted on 33 of the
Company&#146;s vessels, together with certain other related collateral, and a
guarantee from Teekay for all amounts outstanding under the Revolvers.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The 8.32% First Preferred Ship Mortgage Notes due February 1, 2008 (the &#147;8.32%
Notes&#148;) are collaterized by first preferred mortgages on seven of the
Company&#146;s Aframax tankers, together with certain other related collateral,
and are guaranteed by seven subsidiaries of Teekay that own the mortgaged
vessels (the &#147;8.32% Notes Guarantor Subsidiaries&#148;) to a maximum of 95%
of the fair value of their net assets. As at June 30, 2001, the fair value of
these net assets approximated $233.9 million. The 8.32% Notes are also subject
to a sinking fund, which will retire $45.0 million principal amount of the 8.32%
Notes on each February 1, commencing 2004.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Condensed financial information regarding Teekay, the 8.32% Notes Guarantor Subsidiaries,
and non-guarantor subsidiaries of Teekay is set out in Schedule A of these
consolidated financial statements.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has several term loans outstanding, which, as at June 30, 2001, totalled
$450.7 million. Interest payments are based on LIBOR plus a margin. As at June
30, 2001, the margins ranged between 0.50% and 1.5%. The term loans reduce in
quarterly or semi-annual payments with varying maturities through 2009. All term
loans of the Company are collateralized by first preferred mortgages on the
vessels to which the loans relate, together with certain other collateral, and
guarantees from Teekay. Term loans of UNS are not guaranteed by Teekay.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
8.875% Senior Notes due July 15, 2011, (the &#147;8.875% Notes&#148;) rank
equally in right of payment with all of the Company&#146;s existing and future
senior unsecured debt and senior to the Company&#146;s existing and future
subordinated debt. The 8.875% Notes are not guaranteed by any of Teekay&#146;s
subsidiaries and effectively rank behind all existing and future debt and other
liabilities of its subsidiaries.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8. Capital
Stock</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
authorized capital stock of Teekay at June 30, 2001 is 25,000,000 shares of
Preferred Stock, with a par value of $1 per share, and 725,000,000 shares of
Common Stock, with a par value of $0.001 per share. As at June 30, 2001, Teekay
had 40,049,727 shares of Common Stock and no shares of Preferred Stock issued
and outstanding.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As at June 30, 2001, Teekay had reserved 4,007,219 shares of Common Stock for
issuance upon exercise of options granted pursuant to its 1995 Stock Option
Plan. As at June 30, 2001, options to purchase a total of 2,779,635 shares of
Teekay&#146;s Common Stock were outstanding, of which 1,101,904 options were
then exercisable at prices ranging from $16.875 to $33.50 per share and a
weighted average exercise price of $23.50 per share. The remaining outstanding
options have exercise prices ranging from $16.875 to $41.19 per share and a
weighted average exercise price of $27.86 per share. All outstanding options
expire between July 19, 2005 and March 15, 2011, ten years after the date of
each respective grant.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Company&#146;s basic earnings per share is based upon the following weighted
average number of common shares outstanding: 39,807,935 shares and 39,520,392
shares for the three- and six-month periods ended June 30, 2001; and 38,205,775
shares and 38,137,694 shares for the three- and six-month periods ended June 30,
2000. Diluted earnings per share is based upon the following weighted average
number of common shares outstanding adjusted for the effect of dilution:
40,941,121 shares and 40,512,712 shares for the three- and six-month periods
ended June 30, 2001; and 39,254,441 shares and 38,744,309 shares for the three-
and six-month periods ended June 30, 2000.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9. Commitments
and Contingencies</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As at June 30, 2001, UNS was committed to the construction of three newbuilding
shuttle tankers, having an aggregate cost of $160.8 million. The newbuilding
vessels are scheduled for delivery between December 2002 and September 2003. As
of June 30, 2001, there have been payments made towards these commitments of
$54.8 million and long-term financing arrangements exist for $71.1 million of
the unpaid cost of these vessels. It is the Company&#146;s intention to finance
the remaining unpaid amount of $34.9 million through either debt borrowings or
surplus cash balances, or a combination thereof. The remaining payments required
to be made under these newbuilding contracts are as follows: $9.6 million in
2001, $43.3 million in 2002 and $53.1 million in 2003.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Certain subsidiaries of Teekay have guaranteed its share of the outstanding mortgage
debt in the joint venture companies Soponata-Teekay Limited, P/R Stena Ugland
Shuttletankers I DA, P/R Stena Ugland Shuttletankers II DA, and P/R Stena Ugland
Shuttletankers III DA, which are 50%-owned by these subsidiaries. As of June 30,
2001, these subsidiaries have guaranteed $115.3 million of such debt, or 50% of
the total $230.6 million in outstanding mortgage debt of the joint venture
companies. These joint venture companies own six vessels (one Aframax, two
Suezmax, and three shuttle tankers).</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On April 25, 2001, Soponata-Teekay Limited, a joint venture in which the Company
owns a 50% interest entered into an agreement to sell its three vessels. The
vessels are scheduled for delivery between July 26, 2001 and August 10, 2001.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10. Other
Income (Loss)</FONT></H2>

<PRE>
                                                                        <B>Three Months Ended         Six Months Ended
                                                                       June 30,     June 30,     June 30,    June 30,
                                                                         2001         2000         2001        2000
                                                                          $             $           $           $</B>
                                                                     ------------- ------------ ----------- -----------
         Loss on disposition of vessels and equipment...............          -             -           -      (1,004)
         Gain (loss) on disposition of available-for-sale securities       (229)            -       1,944           -
         Equity income from joint venture...........................      2,601         1,193       5,394       2,012
         Future income taxes........................................     (2,419)         (500)     (3,090)     (1,000)
         Miscellaneous..............................................      1,179            92      (2,180)       (315)
                                                                          -----    -----------     -------    --------
                                                                          1,132           785       2,068        (307)
                                                                          =====     =========       =====     ========
</PRE>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.
Derivatives Instruments and Hedging Activities</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In June 1998, the Financial Accounting Standards Board (&#147;FASB&#148;) issued
Statement of Financial Accounting Standards No. 133 (&#147;SFAS 133&#148;),
&#147;Accounting for Derivative Instruments and Hedging Activities&#148;, which
establishes new standards for recording derivatives in interim and annual
financial statements. This statement requires the recording of all derivative
instruments as assets or liabilities, measured at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If the derivative
is a hedge, depending upon the nature of the hedge, changes in the fair value of
the derivatives are either offset against the fair value of assets, liabilities
or firm commitments through income, or recognized in other comprehensive income
until the hedged item is recognized into income. The ineffective portion of a
derivative&#146;s change in fair value will be immediately recognized into
income. SFAS 133, as amended by Statements of Financial Accounting Standards No.
137 and No. 138, is effective for fiscal years beginning after June 15, 2000.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Company adopted SFAS 133 on January 1, 2001. The Company recognized the fair
value of its derivatives as assets of $2.2 million and liabilities of $1.3
million on its consolidated balance sheet as of January 1, 2001. These amounts
were recorded as a cumulative effect of an accounting change as an adjustment to
stockholders&#146; equity through other comprehensive income. There was no
impact on net income. In addition, a deferred gain of $3.2 million on unwound
interest rate swap agreements presented as other long-term liabilities at
December 31, 2000, was reclassified to accumulated other comprehensive income
and will be recognized into earnings over the hedged term of the debt.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> The Company only used
derivatives for hedging purposes. The following summarizes the
Company&#146;s risk strategies with respect to market risk from foreign currency
fluctuations and changes in interest rates and the effect of these strategies on
the Company&#146;s financial statements. The Company has a foreign currency cash
flow hedging program to protect against the increase in cost of certain
forecasted foreign currency cash flows resulting from voyage, vessel operating,
drydocking and general and administrative expenditures that have been forecasted
to occur over the next three years. The Company hedges portions of its
forecasted expenditures denominated in foreign currencies with forward
contracts. As at June 30, 2001, the Company was committed to foreign exchange
contracts for the forward purchase of approximately Japanese Yen 100.0 million,
Singapore Dollars 8.8 million, Norwegian Kroner 122.3 million, Canadian Dollars
39.6 million and Euros 4.9 million for U.S. Dollars, at an average rate of
Japanese Yen 122.91 per U.S. Dollar, Singapore Dollar 1.74 per U.S. Dollar,
Norwegian Kroner 9.51 per U.S. Dollar, Canadian Dollar 1.54 per U.S. Dollar and
Euros 1.09 per U.S. Dollar, respectively.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As at June 30, 2001, the Company was committed to a series of interest rate swap
agreements whereby $145.0 million of the Company&#146;s floating rate debt was
swapped with fixed rate obligations having a weighted average remaining term of
1.1 years, expiring between December 2001 and May 2004. These agreements
effectively change the Company&#146;s interest rate exposure on $145.0 million
of debt from a floating LIBOR rate to a weighted average fixed rate of 6.46%.
The Company is exposed to credit loss in the event of non-performance by the
counter parties to the interest rate swap agreements; however, the Company does
not anticipate non-performance by any of the counter parties.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During the six-month period ended June 30, 2001, the Company recognized a net loss of
$0.1 million relating to the ineffective portion of its interest rate swap
agreements. The ineffective portion of the interest rate swap agreements is
presented as interest expense.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As at June 30, 2001, the Company estimates, based on current foreign exchange and
interest rates, that it will reclassify approximately $0.5 million of income on
derivative instruments from accumulated other comprehensive income to earnings
during the next twelve months due to actual voyage, vessel operating, drydocking
and general and administrative expenditures and the payment of interest expense
associated with the floating-rate debt.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12. Recent
Accounting Pronouncements</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In July 2001, the FASB issued Statement of Financial Accounting Standards No. 142
(&#147;SFAS 142&#148;), &#147;Goodwill and Other Intangible Assets&#148;, which
establishes new standards for accounting for goodwill and other intangible
assets. SFAS 142 requires that goodwill and indefinite lived intangible assets
no longer be amortized but reviewed annually for impairment, or more frequently
if impairment indicators arise. This statement is effective for existing
goodwill beginning with fiscal years starting after December 15, 2001. Based
upon the Company&#146;s goodwill at June 30, 2001, the Company estimates that
adoption of SFAS 142 will result in an annual increase in net income of
approximately $4.5 million.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13. Subsequent
Events</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On August 1, 2001, the Company entered into an agreement under which it will assume
the contracts for the construction of three Suezmax and two Aframax
tankers scheduled for delivery in 2003, at a total cost of approximately $250
million. Approximately $48 million of this cost will be paid in August 2001 as
reimbursement for installments already made under the shipbuilding contracts.
The remaining balance of the installments and delivery payments on the vessels
are due in 2003 and it is the Company&#146;s intention to finance the remaining
unpaid amounts through either debt borrowings or surplus cash balances, or a
combination thereof. Upon delivery, the vessels will be time-chartered back to
the seller for a minimum of 12 years each, with options to extend these
time-charters for up to an additional six years.</FONT></P>


<PAGE>


<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE A</FONT></H1><BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                 CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS<BR>
                                           (in thousands of U.S. dollars)<BR>
                                                     (unaudited)</FONT></H1><BR><BR>

<PRE>
                                                                  <B>Three Months Ended June 30, 2001
                                           -------------------------------------------------------------------------------
                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                   -         8,879          243,770       (38,828)         213,821
Operating expenses                                2,695         8,313          131,301       (38,828)         103,481
                                           -------------------------------------------------------------------------------
   (Loss) income from vessel operations          (2,695)          566          112,469              -         110,340

Net interest expense                             (3,217)            -          (12,014)             -         (15,231)
Equity in net income of subsidiaries            103,130             -                -      (103,130)               -
Other (loss) income                                (977)        1,663              446              -           1,132
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                       96,241         2,229          100,901      (103,130)          96,241
Retained earnings (deficit), beginning of
   the period                                   777,618       (18,928)         818,886      (799,958)         777,618
Dividends declared                               (8,481)            -                -              -          (8,481)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
   period</B>                                       865,378       (16,699)         919,787      (903,088)         865,378
                                           ===============================================================================

                                                                  <B>Three Months Ended June 30, 2000
                                           -------------------------------------------------------------------------------
                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                 -           8,623        183,916        (49,919)          142,620
Operating expenses                                125           7,797        117,086        (43,488)           81,520
                                           -------------------------------------------------------------------------------
   Income (loss) from vessel operations          (125)            826         66,830         (6,431)           61,100

Net interest income (expense)                  (4,937)              -        (10,200)            (1)          (15,138)
Equity in net income of subsidiaries           51,123               -              -        (51,123)                -
Other income                                      686               -             98              1               785
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                     46,747             826         56,728        (57,554)           46,747
Retained earnings (deficit), beginning of
   the period                                 415,886         (27,599)       399,423       (371,824)          415,886
Dividends declared                             (8,217)              -              -              -            (8,217)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
   period</B>                                     454,416         (26,773)       456,151       (429,378)          454,416
                                           ===============================================================================

  (See Note 7)


</PRE>

<PAGE>


<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE A</FONT></H1><BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                 CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS<BR>
                                           (in thousands of U.S. dollars)<BR>
                                                     (unaudited)</FONT></H1><BR><BR>


<PRE>
                                                                   <B>Six Months Ended June 30, 2001
                                           -------------------------------------------------------------------------------
                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                 -          17,660        520,304          (78,987)        458,977
Operating expenses                              5,488          17,053        249,348          (78,987)        192,902
                                           -------------------------------------------------------------------------------
   Loss income from vessel operations          (5,488)            607        270,956                -         266,075

Net interest expense                           (5,963)              -        (21,251)               -         (27,214)
Equity in net income of subsidiaries          250,988               -              -         (250,988)              -
Other income (loss)                             1,392           1,663           (987)               -           2,068
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                    240,929           2,270        248,718         (250,988)        240,929
Retained earnings (deficit), beginning of
   the period                                 641,149         (18,969)       671,069         (652,100)        641,149
Adjustment for equity income on step
   acquisition                                    198               -              -                -             198
Dividends declared                            (16,898)              -              -                -         (16,898)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
   period</B>                                     865,378         (16,699)       919,787         (903,088)        865,378
                                           ===============================================================================

                                                                   <B>Six Months Ended June 30, 2000
                                           -------------------------------------------------------------------------------
                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                 -          17,880        331,804        (86,997)          262,687
Operating expenses                                267          15,749        221,808        (74,005)          163,819
                                           -------------------------------------------------------------------------------
   Income (loss) from vessel operations          (267)          2,131        109,996        (12,992)           98,868

Net interest income (expense)                  (9,699)             46        (22,222)             -           (31,875)
Equity in net income of subsidiaries           75,966               -              -        (75,966)                -
Other income (loss)                               686               -           (993)             -              (307)
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                     66,686           2,177         86,781        (88,958)           66,686
Retained earnings (deficit), beginning of
   the period                                 404,130         (28,950)       369,370       (340,420)          404,130
Dividends declared                            (16,400)              -              -              -           (16,400)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
   period</B>                                     454,416         (26,773)       456,151       (429,378)          454,416
                                           ===============================================================================

  (See Note 7)


</PRE>

<PAGE>


<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE A</FONT></H1><BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                     CONDENSED STATEMENTS OF COMPREHENSIVE INCOME<BR>
                                            (in thousands of U.S. dollars)<BR>
                                                     (unaudited)</FONT></H1><BR><BR>


<PRE>
                                                                   <B>Six Months Ended June 30, 2001
                                          ----------------- -------------- ---------------- --------------- ----------------
                                                             8.32% Notes                                        Teekay
                                               Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                           Shipping Corp.   Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                                 $                $               $               $                $</B>
                                          ----------------- -------------- ---------------- --------------- ----------------

Net income                                      240,929             607         250,381         (250,988)        240,929

Other comprehensive income

     Unrealized loss on
        available-for-sale securities                 -               -          (3,565)               -          (3,565)
     Reclassification adjustment for
        gain on available-for-sale
        securities included in net income             -               -          (4,427)               -          (4,427)

     Cumulative effect of accounting change           -               -           4,155                -           4,155

     Unrealized loss on derivative instruments        -               -          (2,717)               -          (2,717)
     Reclassification adjustment for
        gain on derivative instruments                -               -            (657)               -            (657)
                                          ----------------- -------------- ---------------- --------------- ----------------
<B>Comprehensive income</B>                            240,929             607         243,170         (250,988)        233,718
                                          ================= ============== ================ =============== ================

                                                                   <B>Six Months Ended June 30, 2000
                                          ----------------- -------------- ---------------- --------------- ----------------
                                                             8.32% Notes                                        Teekay
                                               Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                           Shipping Corp.   Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                                 $                $               $               $                $</B>
                                          ----------------- -------------- ---------------- --------------- ----------------

Net income                                       66,686           2,177          86,781          (88,958)         66,686
Other comprehensive income                            -               -               -                -               -
                                          ----------------- -------------- ---------------- --------------- ----------------
<B>Comprehensive income</B>                             66,686           2,177          86,781          (88,958)         66,686
                                          ================= ============== ================ =============== ================

  (See Note 7)


</PRE>

<PAGE>


<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE A</FONT></H1><BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                               CONDENSED BALANCE SHEETS<BR>
                                            (in thousands of U.S. dollars)<BR>
                                                     (unaudited)</FONT></H1><BR><BR>

<PRE>
                                                                        <B>As at June 30, 2001
                                          ---------------------------------------------------------------------------------
                                                            8.32% Notes                                        Teekay
                                          Teekay Shipping    Guarantor    Non-Guarantor                    Shipping Corp.
                                               Corp.       Subsidiaries    Subsidiaries    Eliminations    &amp; Subsidiaries
                                                 $               $              $                $               $</B>
                                          ---------------------------------------------------------------------------------
<B>ASSETS</B>
Cash and cash equivalents                           58               -         304,164               -           304,222
Other current assets                             1,109             750         201,117         (96,000)          106,976
                                          ---------------------------------------------------------------------------------
     Total current assets                        1,167             750         505,281         (96,000)          411,198
Vessels and equipment (net)                          -         272,314       1,756,255               -         2,028,569
Advances due from subsidiaries                 293,182               -               -        (293,182)                -
Other assets (principally marketable
     securities and investments in
     subsidiaries)                           1,469,322               -          57,557      (1,469,322)           57,557
Investment in joint venture                          -               -          46,516               -            46,516
Goodwill                                             -               -          89,361               -            89,361
                                          ---------------------------------------------------------------------------------
                                             1,763,671         273,064       2,454,970      (1,858,504)        2,633,201
                                          =================================================================================
<B>LIABILITIES &amp; STOCKHOLDERS'
EQUITY</B>
Current liabilities                              7,929           1,363         242,338         (96,000)          155,630
Long-term debt                                 417,229               -         705,745               -         1,122,974
Due to (from) affiliates                             -         (80,930)        428,307        (347,377)                -
                                          ---------------------------------------------------------------------------------
     Total liabilities                         425,158         (79,567)      1,376,390        (443,377)        1,278,604
                                          ---------------------------------------------------------------------------------
Minority Interest                                    -               -          18,740               -            18,740
Stockholders' Equity
Capital stock                                  473,135              23           5,943          (5,966)          473,135
Contributed capital                                  -         369,307         136,766        (506,073)                -
Retained earnings (deficit)                    865,378         (16,699)        919,787        (903,088)          865,378
Accumulated other comprehensive loss                 -               -          (2,656)              -            (2,656)
                                          ---------------------------------------------------------------------------------
     Total stockholders' equity              1,338,513         352,631       1,059,840      (1,415,127)        1,335,857
                                          ---------------------------------------------------------------------------------
                                             1,763,671         273,064       2,454,970      (1,858,504)        2,633,201
                                          =================================================================================

                                                                       <B>As at December 31, 2000
                                           --------------------------------------------------------------------------------
                                                            8.32% Notes                                        Teekay
                                               Teekay        Guarantor     Non-Guarantor                   Shipping Corp.
                                           Shipping Corp.   Subsidiaries   Subsidiaries     Eliminations   &amp; Subsidiaries
                                                  $              $               $               $                $</B>
                                           ---------------- ------------- ---------------- --------------- ----------------
<B>ASSETS</B>
Cash and cash equivalents                              294          -            181,006             -           181,300
Other current assets                                    45        725            209,425       (96,000)          114,195
                                           ---------------- ------------- ---------------- --------------- ----------------
     Total current assets                              339        725            390,431       (96,000)          295,495
Vessels and equipment (net)                              -    281,377          1,326,339             -         1,607,716
Advances due from subsidiaries                      58,068          -                  -       (58,068)                -
Other assets (principally marketable
     securities and investments in
     subsidiaries)                               1,229,756          -             50,414    (1,229,756)           50,414
Investment in joint venture                              -          -             20,474             -            20,474
                                           ---------------- ------------- ---------------- --------------- ----------------
                                                 1,288,163    282,102          1,787,658    (1,383,824)        1,974,099
                                           ================ ============= ================ =============== ================
<B>LIABILITIES &amp; STOCKHOLDERS'
EQUITY</B>
Current liabilities                                  4,932      1,371            228,032       (96,000)          138,335
Long-term debt                                     189,274          -            543,408             -           732,682
Due to (from) affiliates                                 -    (69,630)           193,315      (123,685)                -
                                           ---------------- ------------- ---------------- --------------- ----------------
     Total liabilities                             194,206    (68,259)           964,755      (219,685)          871,017
                                           ---------------- ------------- ---------------- --------------- ----------------
Minority Interest                                        -          -              4,570             -             4,570
Stockholders' Equity
Capital stock                                      452,808         23              5,943        (5,966)          452,808
Contributed capital                                      -    369,307            136,766      (506,073)                -
Retained earnings (deficit)                        641,149    (18,969)           671,069      (652,100)          641,149
Accumulated other comprehensive income                   -          -              4,555             -             4,555
                                           ---------------- ------------- ---------------- --------------- ----------------
     Total stockholders' equity                  1,093,957    350,361            818,333    (1,164,139)        1,098,512
                                           ---------------- ------------- ---------------- --------------- ----------------
                                                 1,288,163    282,102          1,787,658    (1,383,824)        1,974,099
                                           ================ ============= ================ =============== ================

  (See Note 7)


<PAGE>

</PRE>
<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE A</FONT></H1><BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR><BR>

                                          CONDENSED STATEMENTS OF CASH FLOWS<BR>
                                            (in thousands of U.S. dollars)<BR>
                                                     (unaudited)</FONT></H1><BR><BR>


<PRE>
                                                                          <B>Six Months Ended June 30, 2001
                                                     -------------------------------------------------------------------------
                                                        Teekay       8.32% Notes                                   Teekay
                                                       Shipping       Guarantor    Non-Guarantor                Shipping Corp.
                                                         Corp.       Subsidiaries   Subsidiaries  Eliminations &amp; Subsidiaries
                                                           $              $              $              $             $</B>
                                                     -------------- --------------- ------------- ------------ ---------------
Cash and cash equivalents provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from operating activities              3,296         11,676         279,732          -          294,704
                                                     -------------- --------------- ------------- ------------ ---------------
<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                        245,233              -         284,500          -         529,733
Scheduled repayments of long-term debt                        -              -         (40,886)         -         (40,886)
Prepayments of long-term debt                           (22,045)             -        (356,690)         -        (378,735)
Other                                                  (226,918)       (11,301)        241,648          -           3,429
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from financing activities             (3,730)       (11,301)        128,572          -         113,541
                                                     -------------- --------------- ------------- ------------ ---------------
<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                        -           (376)       (122,204)         -        (122,580)
Expenditure for the purchase of Ugland Nordic
     Shipping ASA                                           198              -        (176,651)         -        (176,453)
Other                                                         -              1          13,709          -          13,710
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from investing activities                198           (375)       (285,146)         -        (285,323)
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Increase (decrease) in cash and cash equivalents</B>           (236)             -         123,158          -         122,922
Cash and cash equivalents, beginning of the period          294              -         181,006          -         181,300
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Cash and cash equivalents, end of the period</B>                 58              -         304,164          -         304,222
                                                     ============== =============== ============= ============ ===============


                                                                      <B>Six Months Ended June 30, 2000
                                               -----------------------------------------------------------------------------
                                                                  8.32% Notes                                   Teekay
                                                    Teekay         Guarantor    Non-Guarantor               Shipping Corp.
                                                Shipping Corp.   Subsidiaries   Subsidiaries  Eliminations  &amp; Subsidiaries
                                                      $                $             $             $               $</B>
                                               ----------------- -------------- ------------- ------------- ----------------
Cash and cash equivalents provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                               ----------------- -------------- ------------- ------------- ----------------
     Net cash flow from operating activities          (9,662)        10,301        111,331         -            111,970
                                               ----------------- -------------- ------------- ------------- ----------------
<B>FINANCING ACTIVITIES</B>
Proceeds from long-term debt                               -              -         11,000         -             11,000
Repayments of long-term debt                               -              -        (16,861)        -            (16,861)
Prepayments of long-term debt                        (35,726)             -       (110,000)        -           (145,726)
Other                                                 45,230        (48,210)        (9,685)        -            (12,665)
                                               ----------------- -------------- ------------- ------------- ----------------
     Net cash flow from financing activities           9,504        (48,210)      (125,546)        -           (164,252)
                                               ----------------- -------------- ------------- ------------- ----------------
<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                     -           (151)       (38,476)        -            (38,627)
Proceeds from disposition of assets                        -              -          9,710         -              9,710
Acquisition costs related to purchase of Bona
     Shipholding Ltd.                                      -              -         (2,127)        -             (2,127)
Other                                                      -              -        (10,878)        -            (10,878)
                                               ----------------- -------------- ------------- ------------- ----------------
     Net cash flow from investing activities               -           (151)       (41,771)        -            (41,922)
                                               ----------------- -------------- ------------- ------------- ----------------
<B>Decrease in cash and cash equivalents</B>                   (158)       (38,060)       (55,986)        -            (94,204)
Cash and cash equivalents, beginning of the period       210         39,652        180,465         -            220,327
                                               ----------------- -------------- ------------- ------------- ----------------
<B>Cash and cash equivalents, end of the period</B>              52          1,592        124,479         -            126,123
                                               ================= ============== ============= ============= ================

  (See Note 7)


</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
                                                   JUNE 30, 2001<BR>
PART I &#150; FINANCIAL INFORMATION</FONT></H1>

<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 2 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS<BR><BR>

RESULTS OF OPERATIONS</FONT></H1>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company is a leading
provider of international crude oil and petroleum product transportation
services to major oil companies, major oil traders and government agencies
worldwide. At June 30, 2001, the Company&#146;s fleet consisted of 95 vessels
(including three newbuildings, seven vessels time-chartered-in, six vessels
owned by joint ventures), for a total cargo-carrying capacity of approximately
9.6 million tonnes. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the six months ended
June 30, 2001, approximately 60% of the Company&#146;s net voyage revenues were
derived from spot voyages. The balance of the Company&#146;s revenue is
generated by two other modes of employment: time-charters, whereby vessels are
chartered to customers for a fixed period; and contracts of affreightment
(&#147;COAs&#148;), whereby the Company carries an agreed quantity of cargo for
a customer over a specified trade route within a given period of time. In the
six months ended June 30, 2001, approximately 24% of net voyage revenues were
generated by time-charters and COAs priced on a spot market basis. In aggregate,
approximately 84% of the Company&#146;s net voyage revenues during the six
months ended June 30, 2001 were derived from spot voyages or time-charters and
COAs priced on a spot market basis, with the remaining 16% being derived from
fixed-rate time-charters and COAs. This dependence on the spot market, which is
within industry norms, contributes to the volatility of the Company&#146;s
revenues, cash flow from operations, and net income. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Historically, the tanker
industry has been cyclical, experiencing volatility in profitability and asset
values resulting from changes in the supply of, and demand for, vessel capacity.
In addition, tanker markets have historically exhibited seasonal variations in
charter rates. Tanker markets are typically stronger in the winter months as a
result of increased oil consumption in the Northern Hemisphere and unpredictable
weather patterns that tend to disrupt vessel scheduling. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Acquisition of
Ugland Nordic Shipping ASA</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the three-month
period ended June 30, 2001, the Company completed the acquisition of 100% of
UNS, by acquiring the remaining 36% for $79.3 million. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNS is the world&#146;s
largest owner of shuttle tankers, controlling a modern fleet of 18 vessels
(including three newbuildings) (the &#147;UNS Fleet&#148;) that engage in the
transportation of oil from offshore production platforms to onshore storage and
refinery facilities. The UNS Fleet has an average age of approximately 8.5
years, excluding the three newbuildings, and operates primarily in the North Sea
under fixed-rate long-term contracts. In addition, as of June 30, 2001, UNS
owned approximately 13.8% of the publicly traded company Nordic American Tankers
Shipping Ltd. (AMEX: NAT) (&#147;NAT&#148;), the owner of three Suezmax tankers
on a long-term contract to BP Shipping. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the year ended December
31, 2000, UNS earned net voyage revenues of $69.1 million, resulting in income
from vessel operations of $23.8 million and net income of $15.4 million. These
amounts reflect the conversion from accounting principles generally accepted in
Norway to accounting principles generally accepted in the United States. The
operating results of UNS have been consolidated in the Company&#146;s financial
statements commencing March 6, 2001, the effective date that the Company
acquired a majority interest in UNS. Minority interest expense, which is
included as part of other income (loss), has been recorded to reflect the
minority shareholders&#146; share of UNS&#146; net income for the period from
March 6, 2001 to April 26, 2001, the effective date the Company acquired the
remaining shares in UNS. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Since the majority of
UNS&#146; revenues are derived from fixed-rate long-term contracts, the
percentage of the Company&#146;s fleet that will be dependent on the spot tanker
market is expected to decline. Giving effect to the acquisition of UNS as if it
had occurred on January 1, 2001, the Company would have derived 18% of its pro
forma net voyage revenues from fixed-rate time-charters and COAs during the six
months ended June 30, 2001, compared to 11% when excluding UNS. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Results of
Operations</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bulk shipping industry freight
rates are commonly measured at the net voyage revenue level in terms of
&#147;time- charter equivalent&#148; (or &#147;TCE&#148;) rates, defined as
voyage revenues less voyage expenses (excluding commissions), divided by voyage
ship-days for the round-trip voyage. Voyage revenues and voyage expenses are a
function of the type of charter, either spot charter or time charter, and port,
canal and fuel costs depending on the trade route upon which a vessel is
sailing, in addition to being a function of the level of shipping freight rates.
For this reason, shipowners base economic decisions regarding the deployment of
their vessels upon anticipated TCE rates, and industry analysts typically
measure bulk shipping freight rates in terms of TCE rates. Therefore, the
discussion of revenue below focuses on net voyage revenues and TCE rates. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TCE rates are dependent on
oil production levels, oil consumption growth, the number of vessels scrapped,
the number of newbuildings delivered and charterers&#146; preference for modern
tankers. As a result of the Company&#146;s dependence on the tanker spot market,
any fluctuations in Aframax TCE rates will impact the Company&#146;s revenues
and earnings. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Quarter Ended
June 30, 2001 versus Quarter Ended June 30, 2000</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Average Aframax TCE rates increased
in the second quarter of 2001, compared to the second quarter of 2000, due to
increased demand for modern tankers, arising from increased oil demand and
discrimination against older tankers by charterers. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the quarter ended
June 30, 2001, OPEC cut oil production in response to the seasonal reduction in
crude oil demand which typically occurs during the second quarter. This reduced
the demand for tankers and caused Aframax tanker charter rates to decline during
the quarter, from the higher levels experienced during the most recent winter. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s average
fleet size was 19.4% larger in the quarter ended June 30, 2001, compared to the
same quarter one year ago, due mainly to the acquisition of UNS in March 2001. </FONT></P>

<h1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Income from Vessel Operations</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues
increased 49.9% to $213.8 million in the quarter ended June 30, 2001, compared
to $142.6 million for the same quarter last year. This is a result of the
increase in fleet size and a 29.7% increase in the Company&#146;s average TCE
rate to $29,658 in the quarter ended June 30, 2001, from $22,872 in the same
quarter last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses,
which include crewing, repairs and maintenance, insurance, stores and lubes, and
communication expenses, increased 13.1% to $39.3 million in the quarter ended
June 30, 2001, from $34.7 million in the same quarter last year, primarily as a
result of the increase in fleet size due mainly to the acquisition of UNS. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Time-charter hire expense
increased 24.6% to $16.3 million in the quarter ended June 30, 2001, from $13.1
million in the same quarter last year, primarily due to an increase in the average
TCE rates earned in the oil/bulk/ore (&#147;O/B/O&#148;) pool, which is managed
by the Company, and an increase in the average number of vessels time-chartered
in by the Company. The minority participants&#146; share of the O/B/O
pool&#146;s net voyage revenues, which is reflected as a time-charter hire
expense, was $7.0 million for the quarter ended June 30, 2001, compared to $5.7
million for the quarter ended June 30, 2000. The average number of vessels
time-chartered-in by the Company, excluding the O/B/Os, was six in the quarter
ended June 30, 2001, compared to five in the same quarter last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and
amortization expense increased 46.6% to $36.1 million in the quarter ended June
30, 2001, from $24.6 million in the same quarter last year, mainly due to the
acquisition of UNS, which resulted in an increase in the average size of the
Company&#146;s owned fleet as well as an increase in the average cost base of
the fleet, and an increase in drydock amortization expense. Depreciation and
amortization expense included amortization of drydocking costs of $3.5 million
in the quarter ended June 30, 2001, compared to $2.1 million in the same quarter
last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General and administrative
expenses increased 29.8% to $11.8 million in the quarter ended June 30, 2001,
from $9.1 million in the same quarter last year, primarily as a result of the
acquisition of UNS. </FONT></P>




<h1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Other Items</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense decreased
6.2% to $18.1 million in the quarter ended June 30, 2001 from $19.3 million in
the same quarter last year, reflecting lower interest rates partially offset by
the additional debt assumed as part of the UNS acquisition. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest income decreased
31.1 % to $2.8 million in the quarter ended June 30, 2001, compared to $4.1
million in the same quarter last year, mainly as a result of lower interest
rates and lower average cash balances. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other income of $1.1
million in the quarter ended June 30, 2001, was comprised primarily of equity
income from joint ventures, dividend income from NAT, and foreign exchange gains
partially offset by the loss on the disposition of marketable securities,
minority interest expense, and income tax expense. Other income for the quarter
ended June 30, 2000 was $0.8 million, which was comprised mainly of equity
income from a joint venture partially offset by income tax expense. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s net
income was $96.2 million in the quarter ended June 30, 2001 compared to net
income of $46.7 million in the quarter ended June 30, 2000, due mainly to the
improvement in Aframax TCE rates. </FONT></P>

<h1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Six Months Ended June 30,
2001 versus Six Months Ended June 30, 2000</font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s average
fleet size was 8.7% greater in the six months ended June 30, 2001, compared to
the same period one year ago, due mainly to the acquisition of UNS in March
2001. </FONT></P>

<h1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Income from Vessel Operations</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues
increased 74.7% to $459.0 million in the current period compared to $262.7
million for the same period last year. This is a result of the increase in fleet
size and a 65.0% increase in the Company&#146;s average TCE rate to $34,290 in
the six months ended June 30, 2001, from $20,781 in the same period last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses
increased 5.3% to $73.2 million in the six months ended June 30, 2001, from
$69.5 million in the same period last year, primarily as a result of the
increase in fleet size. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Time-charter hire expense
increased 28.6% to $33.5 million in the six months ended June 30, 2001, from
$26.1 million in the same period last year, primarily due to an increase in the
average TCE rates earned in the O/B/O pool managed by the Company, and an
increase in the average number of vessels time-charted in by the Company. The
minority participants&#146; share of the O/B/O pool&#146;s net voyage revenues
was $16.4 million for the six months ended June 30, 2001, compared to $11.2
million for the same period last year. The average number of vessels
time-chartered-in by the Company, excluding the O/B/Os, was six in the six
months ended June 30, 2001, compared to five from the same period last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and
amortization expense increased 28.1% to $63.6 million in the six months ended
June 30, 2001, from $49.7 million in the same period last year, mainly due to
the acquisition of UNS, which resulted in an increase in the average size of the
Company&#146;s owned fleet as well as an increase in the average cost base of
the fleet, and an increase in drydock amortization expense. Depreciation and
amortization expense included amortization of drydocking costs of $6.5 million
in the six months ended June 30, 2001, compared to $4.3 million in the same
period last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General and administrative
expenses increased 21.6% to $22.6 million in the six months ended June 30, 2001,
from $18.6 million in the same period last year, primarily as a result of the
acquisition of UNS and the payment of senior management bonuses in the first
quarter of 2001. </FONT></P>

<h1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Other Items</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense decreased
16.3% to $32.9 million in the six months ended June 30, 2001, from $39.3 million
in the same period last year, reflecting lower interest rates, partially offset
by the additional debt assumed as part of the UNS acquisition. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest income decreased
23.5% to $5.7 million in the six months ended June 30, 2001, compared to $7.4
million in the same period last year, mainly as a result of lower interest
rates. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other income of $2.1
million in the six months ended June 30, 2001, was comprised of equity income
from joint ventures, dividend income from NAT, and gain on the disposition of
marketable securities, partially offset by minority interest expense, foreign
exchange losses and income tax expense. Other loss for the six months ended June
30, 2000 was $0.3 million, which was primarily the result of a loss on the
disposition of vessels and income tax expense, partially offset by equity
income for a joint venture. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s net
income for the six months ended June 30, 2001 was $240.9 million, compared to
$66.7 million, for the same period last year, due mainly to the improvement in
Aframax TCE rates. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table
illustrates the relationship between fleet size (measured in ship-days), TCE
performance, and operating results per calendar ship-day:</FONT></P>


<PAGE>


<PRE>

- ------------------------------------------------------------ ------------------------------ ---------------------------
                                                                  <B>Three Months Ended             Six Months Ended
                                                                        June 30                      June 30
                                                                 2001            2000           2001          2000</B>
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
<B>International Tanker Fleet (excluding O/B/O Fleet,
   UNS Fleet and Australian crewed vessels):</B>
Average number of ships                                               60            59                59            60
Total calendar ship-days                                           5,466         5,370            10,717        10,901
Revenue-generating ship-days (A)                                   5,043         5,125             9,966        10,378
Net voyage revenue before commissions (B) (000's)            $   164,125   $   120,730       $   379,366   $   220,621
- ------------------------------------------------------------ -- ---------- -- ------------- --- ----------    ---------
TCE (B/A)                                                    $    32,545   $    23,557       $    38,066   $    21,259
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
Operating results per calendar ship-day:
    Net voyage revenue                                       $    29,122   $    21,815       $    34,378   $    19,634
    Vessel operating expense                                       5,263         5,382             5,285         5,298
    General and administrative expense                             1,579         1,402             1,613         1,420
    Drydocking expense                                               446           400               493           411
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
Operating cash flow per calendar ship-day                    $    21,834   $    14,631       $    26,987   $    12,505
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
<B>Oil/Bulk/Ore ("OBO") Fleet:</B>
  Total calendar ship-days                                           728           728             1,448         1,456
  Operating cash flow per calendar ship-day                  $     7,821   $     6,843       $     8,128   $     5,109
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
<B>UNS Fleet:</B>
  Total calendar ship-days                                         1,086             -             1,262             -
  Operating cash flow per calendar ship-day                  $    15,884   $         -       $    16,179   $         -
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
<B>Australian Fleet:</B>
  Total calendar ship-days                                           436           364               796           728
  Operating cash flow per calendar ship-day                  $    14,799   $    13,590       $    14,553   $    13,947
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
<B>Total Fleet:</B>
  Total calendar ship-days                                         7,716         6,462            14,223        13,085
  Operating cash flow per calendar ship-day                  $    19,258   $    13,671       $    23,394   $    11,738
- ------------------------------------------------------------ -- ---------- -- ------------- --- ---------- -- ---------
</PRE>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LIQUIDITY AND CAPITAL RESOURCES</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at June 30, 2001, the
Company&#146;s total liquidity, which includes cash, short-term marketable
securities and undrawn borrowings, was $538.3 million, up from $339.4 million as
at December 31, 2000, mainly as a result of the cash flow from operating
activities earned during the six-month period ended June 30, 2001, net proceeds
from the issuance of $250.0 million of the Company&#146;s 8.875% senior
unsecured Notes due 2011 (the &#147;8.875% Notes&#147;) of which $125.0 million was
used to prepay certain outstanding secured debt in July 2001, partially offset
by $176.5 million in cash used to purchase the UNS shares (net of $26.6 million
in cash acquired from UNS). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net cash flow from
operating activities increased to $294.7 million in the six months ended June
30, 2001, from $112.0 million in the same period last year, mainly reflecting
the increase in TCE rates and increased fleet size as a result of the UNS
acquisition. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Scheduled debt repayments
were $40.9 million during the six months ended June 30, 2001, compared to $16.9
million during the same period last year. Debt prepayments during the six months
ended June 30, 2001 totalled $378.7 million. Of this, $191.0 million was used to
reduce the Company&#146;s two long-term Revolving Credit Facilities (the
&#147;Revolvers&#148;), $165.7 million was used to reduce several of the
Company&#146;s term loans, and the remaining $22.0 million was used to prepay a
portion of the Company&#146;s 8.32% First Preferred Ship Mortgage Notes (the
&#147;8.32% Notes&#147;). Debt prepayments during the six months ended June 30, 2000
totalled $145.7 million. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at June 30, 2001, the
Company&#146;s total debt was $1,178.0 million, compared to $797.5 million as at
December 31, 2000. The Company&#146;s Revolvers provided for borrowings of up to
$537.0 million as at June 30, 2001, of which $310.1 million was drawn at that
date. The amount available under the Revolvers reduces semi-annually with final
balloon reductions in 2006 and 2008. The 8.32% Notes are due February 1, 2008
and are subject to a sinking fund which will retire $45.0 million principal
amount of the 8.32% Notes in February 1 of each year, commencing 2004. The
8.875% Notes are due July 15, 2011. The Company&#146;s outstanding term loans
reduce in quarterly or semi-annual payments with varying maturities through
2009. As of June 30, 2001, the Company&#146;s term loans outstanding totaled
$450.7 million. The aggregate annual long-term debt principal repayments
required to be made subsequent to June 30, 2001 are $61.0 million in 2001, $84.4
million in 2002, $93.2 million in 2003, $115.3 million in 2004, $135.0 million
in 2005 and $689.1 million thereafter to 2011. As noted above, in July 2001, the
Company prepaid $125.0 million of its secured debt from the net proceeds of the
8.875% Notes. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Among other matters, the
Company&#146;s term loans and Revolvers generally provide for such items as
maintenance of certain vessel market value to loan ratios and minimum
consolidated financial covenants, prepayment privileges (in some cases with
penalties), and restrictions against the incurrence of new investments by the
individual subsidiaries without prior lender consent. The amount of Restricted
Payments, as defined, that the Company can make, including dividends and
purchases of its own capital stock, was limited as of June 30, 2001, to $438.2
million. Certain of the loan agreements require that a minimum level of free
cash be maintained. As at June 30, 2001, this amount was $26.0 million. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Funding and treasury
activities are conducted within corporate policies to minimize borrowing costs
and maximize investment returns while maintaining the safety of the funds and
appropriate liquidity for Company purposes. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cash and cash equivalents
are held primarily in U.S. dollars with some balances held in Japanese Yen,
Singapore Dollars, Canadian Dollars, Australian Dollars, British Pound and
Norwegian Kroner. The Company uses foreign currency contracts to manage risks
associated with holding these currencies. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company manages the
impact of interest rate changes on earnings and cash flows through its interest
rate structure. For the Revolvers, the interest rate structure, is based on
LIBOR plus a margin depending on the financial leverage of the Company. Interest
payments on the term loans are based on LIBOR plus a margin. We use interest
rate swaps to manage our interest rate risk. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dividends declared during
the six months ended June 30, 2001 were $16.9 million, or 43.0 cents per share. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the six months ended
June 30, 2001, the Company incurred capital expenditures for vessels and
equipment of $114.5 million, consisting mainly of the purchase of four shuttle
tankers. Cash expenditures for drydocking were $8.0 million in the six months
ended June 30, 2001 compared to $3.6 million over the same period last year. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at June 30, 2001, UNS
was committed to the construction of three newbuilding shuttle tankers, having
an aggregate cost of $160.8 million. The newbuilding vessels are scheduled for
delivery between December 2002 and September 2003. As of June 30, 2001, there
have been payments made towards these commitments of $54.8 million and long-term
financing arrangements exist for $71.1 million of the unpaid cost of these
vessels. It is the Company&#146;s intention to finance the remaining unpaid
amount of $34.9 million through either additional debt borrowings or surplus
cash balances, or a combination thereof. The remaining payments required to be
made under these newbuilding contracts are as follows: $9.6 million in 2001,
$43.3 million in 2002 and $53.1 million in 2003. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company has guaranteed
its share of the outstanding mortgage debt in four joint venture companies that
are 50% owned by the Company. As of June 30, 2001, the Company has guaranteed
$115.3 million of such debt, or 50% of the total $230.6 million in outstanding
mortgage debt of the joint venture companies. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On April 25, 2001, a joint
venture in which the Company owns a 50% interest, entered into an agreement to
sell its three vessels. The vessels were delivered during July and August 2001. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On August 1, 2001, the
Company entered into an agreement under which it will assume the contracts for
the construction of three Suezmax and two Aframax tankers due for delivery in
2003, at a total cost of approximately $250 million. Approximately $48 million
of this cost was paid in August 2001 as reimbursement for installments
already made under the shipbuilding contracts. The remaining balance of the
installments and delivery payments on the vessels are due in 2003 and it is the
Company&#146;s intention to finance the remaining unpaid amounts through either
debt borrowings or surplus cash balances, or a combination thereof.
Upon delivery, the vessels will be time-chartered back to the seller for a
minimum of 12 years each, with options to extend these time-charters for up to
an additional six years. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As part of its growth
strategy, the Company will continue to consider strategic opportunities,
including the acquisition of additional vessels and expansion into new markets.
The Company may choose to pursue such opportunities through internal growth,
joint ventures, or business acquisitions. The Company intends to finance any
future acquisitions through various sources of capital, including internally
generated cash flow, existing credit lines, additional debt borrowings, and the
issuance of additional shares of capital stock. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORWARD-LOOKING
STATEMENTS</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Report on Form 6-K for the
quarterly period ended June 30, 2001 contains certain forward-looking statements
(as such term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended)
concerning future events and the Company&#146;s operations, performance and
financial condition, including, in particular, statements regarding: Aframax TCE
rates; tanker supply and demand; supply and demand for oil; future capital
expenditures; the Company&#146;s growth strategy and measures to implement such
strategy; the Company&#146;s competitive strengths; the Company&#146;s
acquisition of UNS and its impact on the Company&#146;s operations; the
Company&#146;s ability to continue to successfully operate UNS; and the future
success of the Company. Words such as &#147;expects,&#148; &#147;intends,&#148;
&#147;plans,&#148; &#147;believes,&#148; &#147;anticipates,&#148;
&#147;estimates&#148; and variations of such words and similar expressions are
intended to identify forward-looking statements. These statements involve known
and unknown risks and are based upon a number of assumptions and estimates that
are inherently subject to significant uncertainties and contingencies, many of
which are beyond the control of the Company. Actual results may differ
materially from those expressed or implied by such forward-looking statements.
Factors that could cause actual results to differ materially include, but are
not limited to: changes in production of or demand for oil and petroleum
products, either generally or in particular regions; changes in the offshore
production of oil; the cyclical nature of the tanker industry and its dependence
on oil markets; the supply of tankers available to meet the demand for
transportation of petroleum products; charterers&#146; preference for modern
tankers; greater or less than anticipated levels of tanker newbuilding orders or
greater or less than anticipated rates of tanker scrapping; changes in trading
patterns significantly impacting overall tanker tonnage requirements; changes in
typical seasonal variations in tanker charter rates; the Company&#146;s
dependence on spot oil voyages; competitive factors in the markets in which the
Company operates; environmental and other regulation, including without
limitation, the imposition of freight taxes and income taxes; the Company&#146;s
potential inability to achieve and manage growth; the Company&#146;s ability to
continue to successfully operate UNS; risks associated with operations outside
the United States; the potential inability of the Company to generate internal
cash flow and obtain additional debt or equity financing to fund capital
expenditures; the potential inability of the Company to renew long-term
contracts; and other factors detailed from time to time in the Company&#146;s
periodic reports filed with the U.S. Securities and Exchange Commission. The
Company expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company&#146;s expectations with respect thereto or
any change in events, conditions or circumstances on which any such statement is
based. </FONT></P>

<PAGE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY
SHIPPING CORPORATION AND SUBSIDIARIES<BR>
JUNE 30, 2001<BR>
PART I &#150; FINANCIAL INFORMATION</FONT></H1>

<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 3 -
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company is exposed to
market risk from foreign currency fluctuations and changes in interest rates.
The Company uses forward currency contracts and interest rate swaps to manage
these risks, but does not use financial instruments for trading or speculative
purposes. </FONT></P>

<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Foreign Exchange Rate Risk</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The international tanker
industry&#146;s functional currency is the U.S. dollar. Virtually all of the
Company&#146;s revenues and most of its operating costs are in U.S. dollars. The
Company incurs certain operating expenses, drydocking, and overhead costs in
foreign currencies, the most significant of which are Japanese Yen, Singapore
Dollars, Canadian Dollars, Australian Dollars, British Pounds and Norwegian
Kroner. During the six months ended June 30, 2001, approximately 24.7% of vessel
and voyage costs, overhead and drydock expenditures were denominated in these
currencies. However, the Company has the ability to shift its purchase of goods
and services from one country to another and, thus, from one currency to
another, on relatively short notice. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company enters into
forward contracts as a hedge against changes in certain foreign exchange rates.
As at June 30, 2001, the Company had $49.0 million in foreign exchange forward
contracts that mature as follows: $19.7 million in 2001, $27.5 million in 2002,
and $1.8 million in 2003. Changes in the fair value of the forward contracts are
either offset against the fair value of assets or liabilities through income, or
recognized in other comprehensive income until the hedged item is recognized in
income. The ineffective portion of a forward contract&#146;s change in fair
value will be immediately recognized into income. </FONT></P>

<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Interest Rate Risk</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company invests its
cash and short-term marketable securities in financial instruments with
maturities of less than six months within the parameters of its investment
policy and guidelines. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company uses interest
rate swaps to manage the impact of interest rate changes on earnings and cash
flows. Changes in the fair value of the interest rate swaps are either offset
against the fair value of assets or liabilities through income, or recognized in
other comprehensive income until the hedged item is recognized in income. The
ineffective portion of an interest rate swap&#146;s change in fair value will be
immediately recognized into income. Premiums and receipts, if any, are
recognized as adjustments to interest expense over the lives of the individual
contracts. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at June 30, 2001, the
Company was committed to a series of interest rate swap agreements whereby
$145.0 million of the Company&#146;s floating rate debt was swapped with fixed
rate obligations having a weighted average remaining term of 1.1 years, expiring
between December 2001 and May 2004. These arrangements effectively change the
Company&#146;s interest rate exposure on $145.0 million of debt from a floating
LIBOR rate to a weighted average fixed rate of 6.46%. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table sets
forth the magnitude of these interest rate swap agreements and foreign exchange
forward contracts: </FONT></P>


<PAGE>



<PRE>
<B>                                             Contract                Carrying Amount                   Fair
(in USD 000's)                                Amount             Asset           Liability             Value</B>
- ---------------------------------------- ------------------ ---------------- ------------------ --------------------
<U>June 30, 2001</U>
FX Forward Contracts                      $     48,998      $         -      $       287        $        (287)
Interest Rate Swap Agreements                  145,000                -            3,122               (3,122)
Debt                                         1,177,981                -        1,177,981           (1,180,171)

<U>December 31, 2000</U>
FX Forward Contracts                      $     62,125      $         -      $         -        $       2,252
Interest Rate Swap Agreements                  100,000                -                -               (1,297)
Debt                                           797,484                -          797,484             (789,913)
- ---------------------------------------- ------------------ ---------------- ------------------ --------------------
</PRE>

<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Inflation</I></font></h1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Although inflation has had
a moderate impact on operating, drydocking and corporate overhead expenses,
management does not consider inflation to be a significant risk to direct costs
in the current and foreseeable economic environment. However, in the event that
inflation becomes a significant factor in the world economy, inflationary
pressures could result in increased operating and financing costs. </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY
SHIPPING CORPORATION AND SUBSIDIARIES<BR>
JUNE 30, 2001<BR>
PART II &#150; OTHER INFORMATION</FONT></H1>

<PRE>


<U>Item 1 - Legal Proceedings</U>

         None

<U>Item 2 - Changes in Securities</U>

         None

<U>Item 3 - Defaults Upon Senior Securities</U>

         None

<U>Item 4 - Submission of Matters to a Vote of Security Holders</U>
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company&#146;s 2001
Annual Meeting of Shareholders was held on May 21, 2001. The following persons
were elected directors for a term of three years by the votes set forth opposite
their names: </FONT></P>

<PRE>
                                                      <B>Votes against or       Shares Which            Broker
Terms Expiring in 2004              Votes For             Withheld             Abstained           Non-Votes</B>
- ----------------------              ---------             --------             ---------           ---------

Morris L. Feder                    35,995,330              16,180                 N/A                 N/A
Leif O. Hoegh                      35,938,400              73,116                 N/A                 N/A
Eileen A. Mercier                  36,000,920              10,591                 N/A                 N/A

</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shareholders also ratified
the selection of Ernst &amp; Young, Chartered Accountants, as independent
auditors of the Company for the fiscal year ending December 31, 2001, as set
forth below: </FONT></P>

<PRE>
                                                      <B>Votes against or       Shares Which            Broker
                                    Votes For             Withheld             Abstained           Non-Votes</B>
                                    ---------             --------             ---------           ---------

Ernst &amp; Young                      35,991,821               8,662                5,635               5,399


<U>Item 5 &#150; Other Information</U>

         None

<U>Item 6 &#150; Exhibits and Reports on Form 6-K</U>

a.       Exhibits
         None

b.       Reports on Form 6-K
(i)      On June 6, 2001, the Company filed a copy of its press release on Form 6-K with respect to the
         announcement of an offering of $200,000,000 of Senior Notes Due 2011. See note (iii)
         for press release of filing pricing.

(ii)     On June 7, 2001,  the Company  filed a copy of the unaudited pro forma  consolidated  condensed  financial
         statements,  the audited  consolidated  financial  statements  of UNS, and the unaudited
         interim consolidated financial statements of UNS on Form 6-K.

(iii)    On June 19, 2001, the Company filed a copy of its press release on Form 6-K with respect to the pricing
         of $250,000,000 of Senior Notes Due 2011. See note (i) for press release of initial
         offering.

(iv)     On July 27, 2001, the Company filed a copy of its press release on Form 6-K with respect to its results
         for the quarter ended June 30, 2001.

(v)      On August 2, 2001, the Company filed a copy of its press release on Form 6-K with respect to the Company
         purchasing five newbuild vessels and securing long-term charter contracts for these
         vessels.

</pre>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO THE
REGISTRATION STATEMENTS OF THE COMPANY ON FORM F-3 FILED WITH THE COMMISSION ON OCTOBER 4, 1995, ON FORM F-4 FILED WITH THE
COMMISSION ON JULY 11, 2001, AND ON FORM F-4, AS AMENDED, FILED WITH THE COMMISSION ON AUGUST 3, 2001.</B> </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.</font></p>

<PRE>
                                                              TEEKAY SHIPPING CORPORATION




Date:    August 14, 2001                             By:      <U>/s/ Peter S. Antturi</U>
                                                              Peter S. Antturi
                                                              Vice President and Chief Financial Officer


</PRE>

</body>
</html>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
