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<SEC-DOCUMENT>0000911971-02-000004.txt : 20020515
<SEC-HEADER>0000911971-02-000004.hdr.sgml : 20020515
<ACCEPTANCE-DATETIME>20020515124852
ACCESSION NUMBER:		0000911971-02-000004
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020331
FILED AS OF DATE:		20020515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEEKAY SHIPPING CORP
		CENTRAL INDEX KEY:			0000911971
		STANDARD INDUSTRIAL CLASSIFICATION:	DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412]
		IRS NUMBER:				000000000
		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:		02649947

	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_033102.htm
<DESCRIPTION>FORM 6K
<TEXT>
<HTML>
<HEAD>
<TITLE>TEEKAY SHIPPING CORPORATION</TITLE>
</HEAD>
<BODY>
<H1 ALIGN=CENTER>
<FONT FACE="Times New Roman, Times, Serif" SIZE=5>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</FONT></H1>

<H1 ALIGN=CENTER>
<FONT FACE="Times New Roman, Times, Serif" SIZE=3><u><B>WASHINGTON, D.C. 20549</B></u>
</FONT>
</H1>

<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 6-K</FONT></H1>

<P ALIGN=CENTER>Report of Foreign Private Issuer</P>
<P ALIGN=CENTER>Pursuant to Rule 13a-16 or 15d-16 of<BR>
the Securities Exchange Act of 1934</P>

<hr width=15% size=1 noshade>

                                   <P ALIGN=CENTER>For the quarterly period ended <u>March 31, 2002</u><BR>
<BR>
                                            <FONT SIZE=4><B>TEEKAY SHIPPING CORPORATION</B></FONT><BR>
                              (Exact name of Registrant as specified in its charter)<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></P>

<hr width=15% size=1 noshade>

<P>&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.]</P>

<P ALIGN=CENTER>Form 20-F&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Form 40- F&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>&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.]</P>

<P ALIGN=CENTER>Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b):82-<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
REPORT ON FORM 6-K FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002</FONT></H1>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<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 months ended March 31, 2002 and 2001..............................         4

                Consolidated Balance Sheets
                       March 31, 2002 and December 31, 2001............................................         5

                Consolidated Statements of Cash Flows
                       for the three months ended March 31, 2002 and 2001..............................         6

                Notes to Consolidated Financial Statements.............................................         7

                Schedule A to the Consolidated Financial Statements....................................        11


Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations............................................................        14

Item 3.  Market Risks..................................................................................        18

PART II: OTHER INFORMATION.............................................................................        20

SIGNATURES.............................................................................................        21
</PRE>
<BR>
<BR>
<BR>
<BR>
<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
INDEPENDENT ACCOUNTANT&#146;S REVIEW REPORT ON INTERIM</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>FINANCIAL
STATEMENTS</FONT></H1>

<P>To the Shareholders and Board of Directors of<BR>
<B>Teekay Shipping Corporation</B></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We have reviewed the
accompanying consolidated balance sheet of Teekay Shipping Corporation and
subsidiaries as of March 31, 2002, the related consolidated statements of income
for the three-month periods ended March 31, 2002 and 2001, and the consolidated
statements of cash flows for the three-month periods ended March 31, 2002 and
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=3>We were furnished with the
report of other accountants on their review of the interim information of Ugland
Nordic Shipping ASA, a wholly owned subsidiary, whose total assets as of March 31, 2002 and whose net
voyage revenues for the three-month period ended March 31, 2002 constituted 22
per cent and 18 per cent, respectively, of the consolidated totals. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>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=3>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=3>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, 2001, 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 8, 2002, we expressed an
unqualified opinion on those consolidated financial statements. We did not audit
the financial statements of Ugland Nordic Shipping ASA, a wholly owned subsidiary,
which statements reflect total assets and net voyage revenues constituting 21 per cent
and 10 per cent, respectively of the related consolidated totals. Those statements
were audited by other auditors whose report has been furnished to us, and our opinion,
insofar as it relates to the amounts included for Ugland Nordic Shipping ASA, is based
solely on the report of other auditors.  In our opinion, the information set forth in
the accompanying consolidated balance sheet and related schedule as of December 31, 2001,
is fairly stated, in all material respects, in relation to the consolidated balance
sheet and schedule from which they have been derived. </FONT></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
        <TD WIDTH=45%>Vancouver, Canada,<BR>
        April 19, 2002</TD>
        <TD WIDTH=55%>/s/ ERNST &amp; YOUNG LLP<BR>
        Chartered Accountants</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
CONSOLIDATED STATEMENTS OF INCOME<BR>
(in thousands of U.S. dollars, except per share amounts)</FONT></H1>

<PRE>
                                                                                      <b>Three Months Ended March 31,</b>
                                                                                        <b>2002                2001</b>
                                                                                           <b>$                   $</b>
                                                                                   ------------------ ------------------
                                                                                               <b>(unaudited)</b>
<b>NET VOYAGE REVENUES</b>
Voyage revenues                                                                        188,630            307,886
Voyage expenses                                                                         52,471             62,730
- ------------------------------------------------- -------------------------------- ------------------ ------------------

Net voyage revenues                                                                    136,159            245,156
- ------------------------------------------------- -------------------------------- ------------------ ------------------

<B>OPERATING EXPENSES</B>
Vessel operating expenses                                                               40,387             33,879
Time-charter hire expense                                                               12,714             17,183
Depreciation and amortization                                                           36,078             27,521
General and administrative                                                              14,167             10,838
- ------------------------------------------------- -------------------------------- ------------------ ------------------
                                                                                       103,346             89,421
- ------------------------------------------------- -------------------------------- ------------------ ------------------

<B>Income from vessel operations</B>                                                           32,813            155,735
- ------------------------------------------------- -------------------------------- ------------------ ------------------

<B>OTHER ITEMS</B>
Interest expense                                                                       (14,701)           (14,786)
Interest income                                                                            792              2,803
Other (loss) income <I>(note 8)</I>                                                            (3,213)               936
- ------------------------------------------------- -------------------------------- ------------------ ------------------
                                                                                       (17,122)           (11,047)
- ------------------------------------------------- -------------------------------- ------------------ ------------------

<B>Net income</B>                                                                              15,691            144,688
================================================= ================================ ================== ==================
<B>Earnings per common share</B>
     - Basic                                                                              0.40              3.69
     - Diluted                                                                            0.39              3.59
<B>Weighted average number of common shares</B>
     - Basic                                                                        39,554,461         39,229,776
     - Diluted                                                                      40,254,683         40,339,978
================================================= ================================ ================== ==================
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>
The accompanying notes are an integral part of the consolidated financial statements.
</I></FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
CONSOLIDATED BALANCE SHEETS<BR>
(in thousands of U.S. dollars)</FONT></H1>


 <PRE>                                                                                         <B> As at             As at
                                                                                         March 31,        December 31,
                                                                                           2002              2001
                                                                                             $                $</B>
                                                                                   ---------------- -----------------
                                                                                       <B>(unaudited)</B>
     <B>ASSETS
     Current</B>
     Cash and cash equivalents <I>(note 5)</I>                                                   200,662          174,950
     Marketable securities                                                                      -            5,028
     Restricted cash <I>(note 5)</I>                                                              11,123            7,833
     Accounts receivable                                                                   66,348           57,519
     Prepaid expenses and other assets                                                     24,249           22,139
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total current assets</B>                                                                 302,382          267,469
     ----------------------------------------------------------------------------- ---------------- -----------------

     Marketable securities                                                                 15,288           16,026

     <B>Vessels and equipment</B> <I>(note 5)</I>
     At cost, less accumulated depreciation of $836,257
         (December 31, 2001 -  $801,985)                                                1,894,494        1,925,844
     Advances on newbuilding contracts <I>(note 7)</I>                                           129,426          117,254
     ----------------------------------------------------------------------------- ---------------- -----------------

<B>Total vessels and equipment</B>                                                        2,023,920        2,043,098
     ----------------------------------------------------------------------------- ---------------- -----------------
     Investment in joint ventures                                                          29,337           27,352
     Other assets                                                                          25,786           26,757
     Goodwill <i>(note 4)</i>                                                                     89,189           87,079
     ----------------------------------------------------------------------------- ---------------- -----------------

                                                                                        2,485,902        2,467,781
     ============================================================================= ================ =================


     <B>LIABILITIES AND STOCKHOLDERS' EQUITY</B>
     <B>Current</B>
     Accounts payable                                                                      15,357           24,484
     Accrued liabilities                                                                   63,059           51,011
     Current portion of long-term debt <I>(note 5)</I>                                            52,328           51,830
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total current liabilities</B>                                                            130,744          127,325
     ----------------------------------------------------------------------------- ---------------- -----------------
     Long-term debt <I>(note 5)</I>                                                              884,184          883,872
     Other long-term liabilities                                                           43,500           39,407
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total liabilities</B>                                                                  1,058,428        1,050,604
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Minority interest</B>                                                                     19,335           18,977

     <B>Stockholders' equity</B>
     Capital stock                                                                        467,751          467,341
     Retained earnings                                                                    942,844          935,660
     Accumulated other comprehensive loss                                                  (2,456)          (4,801)

     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total stockholders' equity</B>                                                         1,408,139        1,398,200
     ----------------------------------------------------------------------------- ---------------- -----------------

                                                                                        2,485,902        2,467,781
     ============================================================================= ================ =================
</PRE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT FACE="Times New Romans" SIZE=2>Commitments and contingencies <I>(note 7)</I></FONT><BR>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT FACE="Times New Romans" SIZE=2><I>The accompanying notes are an integral part of the consolidated financial statements.</I></FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
(in thousands of U.S. dollars)</FONT></H1>

<PRE>                                                                                      <B>Three Months Ended March 31,
                                                                                      2002                    2001
                                                                                        $                       $</B>
                                                                                ----------------------- -----------------------
                                                                                               <B>(unaudited)</B>
     Cash and cash equivalents provided by (used for)

     <B>OPERATING ACTIVITIES</B>
     Net income                                                                      15,691                 144,688
     Non-cash items:
          Depreciation and amortization                                              36,078                  27,521
          Loss (gain) on disposition of available-for-sale securities                 1,130                  (2,707)
          Equity income (net of dividends received: March 31, 2002 - $Nil;
             March 31, 2001 - $2,500)                                                (1,885)                   (293)
          Future income taxes                                                         3,181                     671
          Other - net                                                                 2,067                   3,022
     Change in non-cash working capital items related to
          operating activities                                                       (7,191)                 (8,390)
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>Net cash flow from operating activities</B>                                         49,071                 164,512
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>FINANCING ACTIVITIES</B>
     Proceeds from long-term debt                                                     9,630                 143,500
     Scheduled repayments of long-term debt                                          (8,761)                 (5,790)
     Prepayments of long-term debt                                                        -                 (92,118)
     Increase in restricted cash                                                     (3,290)                      -
     Proceeds from issuance of Common Stock                                             408                   5,788
     Cash dividends paid                                                             (8,505)                 (8,408)
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>Net cash flow from financing activities</B>                                        (10,518)                 42,972
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>INVESTING ACTIVITIES</B>
     Expenditures for vessels and equipment                                         (13,869)                 (1,394)
     Expenditures for drydocking                                                     (3,858)                 (2,240)
     Expenditure for purchase of Ugland Nordic Shipping ASA (net of cash
         acquired of $26,605)                                                             -                 (97,144)
     Acquisition costs related to purchase of Bona Shipholding Ltd.                       -                     (20)
     Proceeds from disposition of available-for-sale securities                       6,771                   8,954
     Other                                                                           (1,885)                      -
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>Net cash flow from investing activities</B>                                        (12,841)                (91,844)
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>Increase in cash and cash equivalents</B>                                           25,712                 115,640
     Cash and cash equivalents, beginning of the period                             174,950                 181,300
     -------------------------------------------------------------------------- ----------------------- -----------------------

     <B>Cash and cash equivalents, end of the period</B>                                   200,662                 296,940
     ========================================================================== ======================= =======================
</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The accompanying notes are an integral part of the consolidated financial statements.</I> </FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
(Information as at March 31, 2002 and for the Three-Month Periods<BR>
Ended March 31, 2002 and 2001 is unaudited)</FONT></H1>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=CENTER><B>1.</B></TD>
<TD WIDTH=90%><B>Basis of Presentation</B></TD></TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR>
<TD>&nbsp;</TD>
<TD>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, 2001. 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, and cash
flows for the interim periods presented. The results of operations for the
three-month period ended March 31, 2002 are not necessarily indicative of those
for a full fiscal year.</TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD ALIGN=CENTER><B>2.</B></TD>
<TD><B>Acquisition of Ugland Nordic Shipping ASA</B></TD></TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR>
<TD>&nbsp;</TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As of May 28, 2001, Teekay had purchased 100% of the issued and outstanding shares
of Ugland Nordic Shipping ASA (&#147;UNS&#148;) (9% of which was purchased in
fiscal 2000 and the remaining 91% of which was purchased in fiscal 2001), for
$222.8 million cash, including estimated transaction expenses of approximately
$7 million. UNS controls a modern fleet of 18 shuttle tankers (including three
newbuildings on order) that engage in the transportation of oil from offshore
production platforms to onshore storage and refinery facilities.</FONT></TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR><TD>&nbsp;</TD>
<TD>The acquisition of UNS has been accounted for using the purchase method of
accounting, based upon estimates of fair value. UNS&#146; operating results are
reflected in Teekay&#146;s financial statements commencing March 6, 2001, the
date Teekay acquired a majority interest in UNS. 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.</TD></TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD ALIGN=CENTER><B>3.</B></TD>
<TD><B>Cash Flows</B></TD></TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR><TD>&nbsp;</TD>
<TD>Cash interest paid during the three-month periods ended March 31, 2002 and 2001
totalled approximately $27.5 million and $18.0 million, respectively.
</TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD ALIGN=CENTER><B>4.</B></TD>
<TD><B>Goodwill</B></TD></TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR><TD>&nbsp;</TD>
<TD>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 for impairment during the first six months of
2002 and annually therafter, 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 balance at December 31, 2001, the Company
estimates that adoption of SFAS 142 will result in an annual increase in net
income of approximately $4.5 million, by no longer amortizing goodwill.
The Company has not completed its transitional impairment testing required by
SFAS 142, and thus is unable to estimate the amount of goodwill impairment, if any.
</TD>
</TR>

</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
(Information as at March 31, 2002 and for the Three-Month Periods<BR>
Ended March 31, 2002 and 2001 is unaudited)</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=CENTER><B>5.</B></TD>
<TD WIDTH=90%><B>Long-Term Debt</B></TD></TR>
</TABLE>

<PRE>                                                                                      <B>March 31,         December 31,
                                                                                        2002                2001
                                                                                          $                   $</B>
                                                                                 -------------------- ------------------
             First Preferred Ship Mortgage Notes (8.32%)
               due through 2008..................................................      167,229              167,229
             Term Loans due through 2010 ........................................      417,107              416,239
             Senior Notes (8.875%) due July 15, 2011 ............................      352,176              352,234
                                                                                 -------------------- ------------------
                                                                                       936,512              935,702
             Less current portion................................................       52,328               51,830
                                                                                 -------------------- ------------------
                                                                                       884,184              883,872
                                                                                 ==================== ==================
</PRE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=CENTER><B>&nbsp;</B></TD>
<TD WIDTH=90%>The Company has two undrawn long-term Revolving Credit Facilities (the
&#147;Revolvers&#148;) available, which, as at March 31, 2002, provided for
borrowings of up to $498.2 million. The Revolvers are collateralized 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.

<BR><BR>

The 8.32% First Preferred Ship Mortgage Notes due February 1, 2008 (the &#147;8.32%
Notes&#148;) are collateralized 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 March 31, 2002, the fair value of
these net assets approximated $162.7 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.

<BR><BR>

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.

<BR><BR>

The Company has several term loans outstanding, which, as at March 31, 2002,
totalled $417.1 million. 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. UNS term loans
totaling $310.5 million are not guaranteed by Teekay. One term loan required a
retention deposit of $11.1 million as at March 31, 2002.

<BR><BR>

Pursuant to certain long-term debt agreements, 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 March 31, 2002, to $448.0 million. Certain loan
agreements require that a minimum level of free cash be maintained. As at March
31, 2002, this amount was $75.0 million.
</TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>


<TR VALIGN=TOP>
<TD ALIGN=CENTER><B>6.</B></TD>
<TD><B>Capital Stock</B>

<BR><BR>

The authorized capital stock of Teekay at March 31, 2002 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 March 31, 2002, Teekay
had 39,568,400 shares of Common Stock and no shares of Preferred Stock issued
and outstanding.

<BR><BR>

As at March 31, 2002, 3,975,927 shares of Common Stock were reserved and available
for issuance upon exercise of options granted or to be granted pursuant to its
1995 Stock Option Plan. As at March 31, 2002, options to purchase a total of
3,724,063 shares of Teekay&#146;s Common Stock were outstanding, of which
1,634,649 options were then exercisable at prices ranging from $16.875 to
$41.190 per share and a weighted average exercise price of $26.205 per share.
The remaining outstanding options have exercise prices ranging from $16.875 to
$41.190 per share and a weighted average exercise price of $31.076 per share.
All outstanding options expire between July 19, 2005 and March 11, 2012, ten
years after the date of each respective grant.
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
(Information as at March 31, 2002 and for the Three-Month Periods<BR>
Ended March 31, 2002 and 2001 is unaudited)</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=CENTER><B>7.</B></TD>
<TD WIDTH=90%><B>Commitments and Contingencies</B></TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR><TD>&nbsp;</TD>
<TD>
As at March 31, 2002, the Company was committed to the construction of three
shuttle, three Suezmax and two Aframax tankers scheduled for delivery between
December 2002 and December 2003, at a total cost of approximately $411.7
million. As of March 31, 2002, there have been payments made towards these
commitments of $122.5 million and long-term financing arrangements exist for
$51.9 million of the unpaid cost of these vessels. It is the Company&#146;s
intention to finance the remaining unpaid amount of $237.3 million through
either debt borrowing or surplus cash balances, or a combination thereof. As of
March 31, 2002, the remaining payments required to be made under these
newbuilding contracts are as follows: $46.9 million in 2002 and $242.3 million
in 2003.

<BR><BR>

Teekay and certain subsidiaries of Teekay have guaranteed their share of the
outstanding mortgage debt in three 50%-owned joint venture companies. As of
March 31, 2002, Teekay and these subsidiaries have guaranteed $86.9 million of
such debt, or 50% of the total $173.8 million in outstanding mortgage debt of
the joint venture companies. These joint venture companies own three shuttle
tankers.
</TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD ALIGN=CENTER><B>8.</B></TD>
<TD><B>Other (Loss) Income</B></TD>
</TR>
</TABLE>

<PRE>                                                                                          <B> Three Months Ended
                                                                                       March 31,          March 31,
                                                                                         2002               2001
                                                                                           $                  $</B>
                                                                                 -------------------- -------------------
             (Loss) gain on disposition of available-for-sale securities.........        (1,130)            2,707
             Equity income from joint ventures...................................         1,885             2,793
             Future income taxes.................................................        (3,181)             (671)
             Miscellaneous - net.................................................          (787)           (3,893)
                                                                                 -------------------- -------------------
                                                                                         (3,213)              936
                                                                                 ==================== ===================
</PRE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=CENTER><B>9.</B></TD>
<TD WIDTH=90%><B>Comprehensive Incomes</B></TD>
</TR>
</TABLE>

<PRE>                                                                                          <B> Three Months Ended
                                                                                       March 31,          March 31,
                                                                                         2002               2001
                                                                                           $                  $</B>
                                                                                 -------------------- ------------------
             Net income                                                                  15,691           144,688
             Other comprehensive income:
                Unrealized gain (loss) on available-for-sale securities..........         1,024            (1,503)
                Reclassification adjustment for loss (gain) on
                   available-for-sale securities included in net income..........           737            (4,946)
                Cumulative effect of accounting change...........................             -             4,155
                Unrealized gain (loss) on derivative instruments.................           723            (3,314)
                Reclassification adjustment for gain on derivative
                   instruments...................................................          (139)             (390)
                                                                                 -------------------- ------------------
             Comprehensive income................................................        18,036           138,690
                                                                                 ==================== ==================
</PRE>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
(Information as at March 31, 2002 and for the Three-Month Periods<BR>
Ended March 31, 2002 and 2001 is unaudited)</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=CENTER><B>10.</B></TD>
<TD WIDTH=90%><B>Derivative Instruments and Hedging Activities</B></TD>
</TR>

<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>

<TR>
<TD>&nbsp;</TD>
<TD>The Company only uses derivatives for hedging purposes. The following summarizes the
Company&#146;s risk strategies with respect to market risk from foreign currency
fluctuations, changes in interest rates, bunker fuel prices and tanker freight
rates and the effect of these strategies on the Company&#146;s financial
statements.

<BR><BR>

The Company hedges portions of its forecasted expenditures denominated in foreign
currencies with forward contracts and a portion of its bunker fuel expenditures
with bunker fuel swap contracts. As at March 31, 2002, the Company was committed
to foreign exchange contracts for the forward purchase of approximately Japanese
Yen 50.0 million, Australian Dollars 0.3 million, Singapore Dollars 0.4 million,
Norwegian Kroner 49.5 million, Canadian Dollars 70.8 million and Euros 3.4
million for U.S. Dollars, at an average rate of Japanese Yen 132.43 per U.S.
Dollar, Australian Dollar 1.90 per U.S. Dollar, Singapore Dollar 1.78 per U.S.
Dollar, Norwegian Kroner 9.57 per U.S. Dollar, Canadian Dollar 1.58 per U.S.
Dollar and Euros 0.92 per U.S. Dollar, respectively. As at March 31, 2002, the
Company was committed to bunker fuel swap contracts totaling 53,700 metric
tonnes with a weighted-average price of $109.06 per tonne, which expire between
April 2002 and May 2004.

<BR><BR>

As at March 31, 2002, the Company was committed to interest rate swap agreements
whereby $85.0 million of the Company&#146;s floating rate debt was swapped with
fixed rate obligations having a weighted average remaining term of 0.8 years,
expiring between May 2002 and May 2004. These agreements effectively change the
Company&#146;s interest rate exposure on $85.0 million of debt from a floating
LIBOR rate to a weighted average fixed rate of 6.40%. 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.

<BR><BR>

The Company hedges certain of its voyage revenues through the use of a written
freight call option. As at March 31, 2002, the Company had a written freight
call option outstanding with a remaining term of nine months, which could
require payments to the counterparty if monthly average freight rates exceed a
specified amount.</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT><B>SCHEDULE A</B></P>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS<BR>
(in thousands of U.S. dollars)<BR>
(unaudited)</FONT></H1>

<PRE>                                                                 <B>Three Months Ended March 31, 2002</B>
                                           -------------------------------------------------------------------------------
<B>                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations  Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                   -         8,939          161,931       (34,711)         136,159
Operating expenses                                2,614         7,185          128,258       (34,711)         103,346
                                           -------------------------------------------------------------------------------
   (Loss) income from vessel operations          (2,614)        1,754           33,673             -           32,813
Net interest expense                            (10,451)            -           (3,458)            -          (13,909)
Equity in net income of subsidiaries             27,557             -                -       (27,557)               -
Other income (loss)                               1,199             -           (4,412)            -           (3,213)
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                       15,691         1,754           25,803       (27,557)          15,691
Retained earnings (deficit), beginning of
   the period                                   935,660       (15,278)       1,036,401    (1,021,123)         935,660
Dividends declared                               (8,507)            -                -             -           (8,507)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
   period</B>                                       942,844       (13,524)       1,062,204    (1,048,680)         942,844
                                           ===============================================================================





                                                                 <B>Three Months Ended March 31, 2001</B>
                                           -------------------------------------------------------------------------------
<B>                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations  &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                   -         8,781          276,534       (40,159)         245,156
Operating expenses                                2,793         8,740          118,047       (40,159)          89,421
                                           -------------------------------------------------------------------------------
   (Loss) income from vessel operations          (2,793)           41          158,487             0          155,735
Net interest expense                             (2,746)            -           (9,237)            -          (11,983)
Equity in net income of subsidiaries            147,858             -                -      (147,858)               -
Other income (loss)                               2,369             -           (1,433)            -              936
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                      144,688            41          147,817      (147,858)         144,688
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                               (8,417)            -                -             -           (8,417)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
   period</B>                                       777,618       (18,928)         818,886      (799,958)         777,618
                                           ===============================================================================

- ------------------
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(See Note 7)</FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT><B>SCHEDULE A</B></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
CONDENSED BALANCE SHEETS<BR>
(in thousands of U.S. dollars)<BR>
(unaudited)</FONT></H1>

<PRE>                                                                        <B>As at March 31, 2002</B>
                                          ---------------------------------------------------------------------------------
<B>                                                            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                            -               -         200,662               -           200,662
Other current assets                             1,149             509         196,062         (96,000)          101,720
                                          ---------------------------------------------------------------------------------
     Total current assets                        1,149             509         396,724         (96,000)          302,382
Vessels and equipment (net)                          -         262,190       1,761,730               -         2,023,920
Advances due from subsidiaries                 326,865               -               -        (326,865)                -
Other assets (principally marketable
     securities and investments in
     subsidiaries)                           1,612,304               -          41,074      (1,612,304)           41,074
Investment in joint ventures                         -               -          29,337               -            29,337
Goodwill                                             -               -          89,189               -            89,189
                                          ---------------------------------------------------------------------------------
                                             1,940,318         262,699       2,318,054      (2,035,169)        2,485,902
                                          =================================================================================
<B>LIABILITIES&amp;STOCKHOLDERS&#146;
EQUITY</B>
Current liabilities                             10,318           2,662         213,764         (96,000)          130,744
Long-term debt                                 519,405               -         408,279               -           927,684
Due to (from) affiliates                             -         (95,769)        474,219        (378,450)                -
                                          ---------------------------------------------------------------------------------
     Total liabilities                         529,723         (93,107)      1,096,262        (474,450)        1,058,428
                                          ---------------------------------------------------------------------------------
Minority Interest                                    -               -          19,335               -            19,335
Stockholders' Equity
Capital stock                                  467,751              23           5,943          (5,966)          467,751
Contributed capital                                  -         369,307         136,766        (506,073)                -
Retained earnings (deficit)                    942,844         (13,524)      1,062,204      (1,048,680)          942,844
Accumulated other comprehensive loss                 -               -          (2,456)              -            (2,456)
                                          ---------------------------------------------------------------------------------
     Total stockholders' equity              1,410,595         355,806       1,202,457      (1,560,719)        1,408,139
                                          ---------------------------------------------------------------------------------
                                             1,940,318         262,699       2,318,054      (2,035,169)        2,485,902
                                          =================================================================================

                                                                      <B>As at December 31, 2001</B>
                                         ----------------------------------------------------------------------------------
<B>                                                            8.32% Notes                                        Teekay
                                              Teekay         Guarantor    Non-Guarantor                    Shipping Corp.
                                          Shipping Corp.    Subsidiaries   Subsidiaries     Eliminations  &amp; Subsidiaries
                                                 $               $              $                $                $</B>
                                         ------------------ ------------ ----------------- --------------- ----------------
<B>ASSETS</B>                                                 -            -           174,950              -           174,950
Cash and cash equivalents
Other current assets                               1,101          472           186,946        (96,000)           92,519
                                         ------------------ ------------ ----------------- --------------- ----------------
     Total current assets                          1,101          472           361,896        (96,000)          267,469
Vessels and equipment (net)                            -      264,768         1,778,330              -         2,043,098
Advances due from subsidiaries                   346,430            -                 -       (346,430)                -
Other assets (principally marketable
     securities and investments in
     subsidiaries)                             1,599,746            -            42,783     (1,599,746)           42,783
Investment in joint ventures                           -            -            27,352              -            27,352
Goodwill                                               -            -            87,079              -            87,079
                                         ------------------ ------------ ----------------- --------------- ----------------
                                               1,947,277      265,240         2,297,440     (2,042,176)        2,467,781
                                         ================== ============ ================= =============== ================
<B>LIABILITIES &amp; STOCKHOLDERS&#146;
EQUITY</B>
Current liabilities                               24,813        1,319           197,193        (96,000)          127,325
Long-term debt                                   519,463            -           403,816              -           923,279
Due to (from) affiliates                               -      (90,131)          503,145       (413,014)                -
                                         ------------------ ------------ ----------------- --------------- ----------------
     Total liabilities                           544,276      (88,812)        1,104,154       (509,014)        1,050,604
                                         ------------------ ------------ ----------------- --------------- ----------------
Minority Interest                                      -            -            18,977              -            18,977
Stockholders' Equity
Capital stock                                    467,341           23             5,943         (5,966)          467,341
Contributed capital                                    -      369,307           136,766       (506,073)                -
Retained earnings (deficit)                      935,660      (15,278)        1,036,401     (1,021,123)          935,660
Accumulated other comprehensive loss                   -            -            (4,801)             -            (4,801)
                                         ------------------ ------------ ----------------- --------------- ----------------
     Total stockholders' equity                1,403,001      354,052         1,174,309     (1,533,162)        1,398,200
                                         ------------------ ------------ ----------------- --------------- ----------------
                                               1,947,277      265,240         2,297,440     (2,042,176)        2,467,781
                                         ================== ============ ================= =============== ================

- ------------------
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(See Note 7)</FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=RIGHT><B>SCHEDULE A</B></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
CONDENSED STATEMENTS OF CASH FLOWS<BR>
(in thousands of U.S. dollars)<BR>
(unaudited)</FONT></H1>

<PRE>                                                                        <B>Three Months Ended March 31, 2002</B>
                                                     -------------------------------------------------------------------------
<B>                                                        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            (11,471)         7,040          53,502          -          49,071
                                                     -------------- --------------- ------------- ------------ ---------------
<B>FINANCING ACTIVITIES</B>
Proceeds from long-term debt                                  -              -           9,630          -           9,630
Scheduled repayments of long-term debt                        -              -          (8,761)         -          (8,761)
Other                                                    11,471         (5,638)        (17,220)         -         (11,387)
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from financing activities             11,471         (5,638)        (16,351)         -         (10,518)
                                                     -------------- --------------- ------------- ------------ ---------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                        -         (1,402)        (16,325)         -         (17,727)
Other                                                         -              -           4,886          -           4,886
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from investing activities                  -         (1,402)        (11,439)         -         (12,841)
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Increase in cash and cash equivalents</B>                         -              -          25,712          -          25,712
Cash and cash equivalents, beginning of the period            -              -         174,950          -         174,950
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Cash and cash equivalents, end of the period</B>                  -              -         200,662          -         200,662
                                                     ============== =============== ============= ============ ===============






                                                                        <B>Three Months Ended March 31, 2001</B>
                                                     -------------------------------------------------------------------------
<B>                                                        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             21,250          6,139         137,123          -         164,512
                                                     -------------- --------------- ------------- ------------ ---------------
<B>FINANCING ACTIVITIES</B>
Proceeds from long-term debt                                  -              -         143,500          -         143,500
Scheduled repayments of long-term debt                        -              -          (5,790)         -          (5,790)
Prepayments of long-term debt                                 -              -         (92,118)         -         (92,118)
Other                                                   (21,555)        (6,016)         24,951          -          (2,620)
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from financing activities            (21,555)        (6,016)         70,543          -          42,972
                                                     -------------- --------------- ------------- ------------ ---------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                        -           (114)         (3,520)         -          (3,634)
Expenditure for the purchase of Ugland Nordic
     Shipping ASA                                           199              -         (97,343)         -         (97,144)
Other                                                         -             (9)          8,943          -           8,934
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from investing activities                199           (123)        (91,920)         -         (91,844)
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Increase (decrease) in cash and cash equivalents</B>           (106)             -         115,746          -         115,640
Cash and cash equivalents, beginning of the period          294              -         181,006          -         181,300
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Cash and cash equivalents, end of the period</B>                188              -         296,752          -         296,940
                                                     ============== =============== ============= ============ ===============

- ------------------
</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(See Note 7)</FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
MARCH 31, 2002<BR>
PART I &#150; FINANCIAL INFORMATION</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10%><B>ITEM 2 -</B></TD>
<TD WIDTH=90%><B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></TD>
</TR>
</TABLE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><I>The following discussion
and analysis should be read in conjunction with the interim consolidated financial
statements and accompanying notes included elsewhere in this report. Except for
the historical information, the following discussion contains forward-looking
statements that involve risks and uncertainties, such as the Company&#146;s
objectives, expectations and intentions. When used in this report, the words
&#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. Actual results could differ materially from results
that may be anticipated by such forward-looking statements and discussed
elsewhere in this report. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. The Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made in this report and in other of the Company&#146;s filings made
with the SEC that attempt to advise interested parties of the risks and factors
that may affect our business, prospects and results of operations.</I> </FONT></P>

<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
RESULTS OF OPERATIONS</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>General</FONT></H1>

<P>Teekay is a leading provider of international crude oil and petroleum product transportation
services to major oil companies, major oil traders and government agencies
worldwide. As at March 31, 2002, the Company&#146;s fleet consisted of 95
vessels (including eight newbuildings on order, five vessels time-chartered-in,
and three vessels owned by joint ventures), for a total cargo-carrying capacity
of approximately 9.6 million tonnes.</P>

<P>During the three months ended March 31, 2002, approximately 48% of the Company&#146;s net voyage
revenues was 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 three months ended March 31, 2002, approximately 19% of net voyage
revenues was generated by time-charters and COAs priced on a spot market basis.
In the aggregate, approximately 67% of the Company&#146;s net voyage revenues
during the three months ended March 31, 2002 was derived from spot voyages or
time-charters and COAs priced on a spot market basis, with the remaining 33%
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.
</P>

<P>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.</P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Acquisition of Ugland Nordic Shipping ASA</FONT></H1>

<P>As of May 28, 2001, the Company had purchased 100% of the issued and outstanding shares of Ugland Nordic
Shipping ASA (&#147;UNS&#148;) (9% of which was purchased in fiscal 2000 and the
remaining 91% of which was purchased in fiscal 2001), for $222.8 million in
cash.</P>

<P>UNS is the world&#146;s largest owner of shuttle tankers, controlling a modern fleet of 18 vessels
(including three newbuildings on order) (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 9.2 years, excluding the three newbuildings on order, and operates
primarily in the North Sea under fixed-rate long-term contracts. In addition, as
of March 31, 2002, UNS owned approximately 10.3% 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.</P>

<P>The operating results of UNS have been consolidated in the Company&#146;s financial statements commencing
March 6, 2001, the date that the Company acquired a majority interest in UNS.
Minority interest expense, which is included as part of other (loss) income, has
been recorded to reflect the minority shareholders&#146; share of UNS&#146; net
income for the period from March 6, 2001 to May 28, 2001, when the Company
acquired the remaining shares in UNS.</P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Results of
Operations</FONT></H1>

<P>Bulk shipping industry freight rates are commonly measured at the net voyage revenue level in terms of
&#147;time-charter equivalent&#148; (&#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.</P>

<P>TCE rates are primarily 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.</P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Quarter Ended
March 31, 2002 versus Quarter Ended March 31, 2001</FONT></H1>

<P>The Company&#146;s average fleet size increased 16.5% in the quarter ended March 31, 2002, compared to the
same quarter one year ago, primarily due to the acquisition of UNS in March
2001.</P>

<P>In response to a slowing global economy, a series of OPEC oil production cuts during 2001 has resulted in
a reduction in tanker demand and thus primarily contributed to a significant
decline in average TCE rates during the last three quarters of 2001. Average TCE
rates declined further in the first quarter of 2002 and continued to weaken into
the second quarter of 2002 as a result of declining world oil production. The
Company&#146;s average TCE rate decreased 51.3% to $19,381 for the quarter ended
March 31, 2002 (excluding the Company&#146;s vessels on bareboat charter), from
$39,773 for the quarter ended March 31, 2001.</P>

<P>Net voyage revenues were $136.2 million in the quarter ended March 31, 2002, as compared to $245.2
million for the same quarter last year, representing a 44.4% decrease. This was
due to a decrease in the Company&#146;s average TCE rate, partially offset by
the increase in the Company&#146;s average fleet size. </P>

<P>Vessel operating expenses, which include crewing, repairs and maintenance, insurance, stores and lubes, and
communication expenses, increased 19.2% to $40.4 million in the quarter ended
March 31, 2002, from $33.9 million in the same quarter last year, primarily as a
result of the increase in fleet size, and higher repairs and maintenance costs. </P>

<P>Time-charter hire expense decreased 26.0% to $12.7 million in the quarter ended March 31, 2002, from $17.2
million in the same quarter last year, due primarily to a decrease in the
average TCE rates earned by the 13 vessels in the oil/bulk/ore
(&#147;O/B/O&#148;) pool managed 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 $4.5 million for the quarter ended March 31,
2002, compared to $9.4 million for the quarter ended March 31, 2001. The average
number of vessels time-chartered-in by the Company, excluding the O/B/Os, was
five in the quarter ended March 31, 2002, unchanged from the same quarter last
year. </P>

<P>Depreciation and amortization expense increased 31.1% to $36.1 million in the quarter ended March
31, 2002, from $27.5 million in the same quarter last year, mainly due to the
acquisition of UNS, which resulted in an increase in the average size and
average cost base of the Company&#146;s owned fleet and an increase in drydock
amortization expense. Depreciation and amortization expense included
amortization of drydocking costs of $4.7 million in the quarter ended March 31,
2002, compared to $3.0 million in the same quarter last year.</P>

<P>General and administrative expenses increased 30.7% to $14.2 million in the quarter ended March 31, 2002,
from $10.8 million in the same quarter last year, primarily as a result of the
acquisition of UNS and an increase in shore staff. </P>

<P>Interest expense for the quarter ended March 31, 2002 was $14.7 million, virtually unchanged from the
same quarter last year. This reflects lower interest rates, offset by the
additional debt assumed as part of the UNS acquisition. </P>

<P>Interest income decreased 71.4% to $0.8 million in the quarter ended March 31, 2002, compared to $2.8
million in the same quarter last year, mainly as a result of lower interest
rates.</P>

<P>Other loss of $3.2 million in the quarter ended March 31, 2002, was comprised of income taxes, loss on the
disposition of available-for-sale securities, minority interest expense,
partially offset by equity income from 50%-owned joint ventures, dividend income
from NAT, and foreign exchange gains. Other income for the quarter ended March
31, 2001 was $0.9 million, which was comprised of a gain on the disposition of
available-for-sale securities, equity income from 50%-owned joint ventures,
partially offset by minority interest, foreign exchange losses and income taxes.</P>

<P>As a result of the foregoing factors, net income was $15.7 million in the quarter ended March 31,
2002 compared to net income of $144.7 million in the quarter ended March 31,
2001. </P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
LIQUIDITY AND CAPITAL RESOURCES</FONT></H1>

<P>As at March 31, 2002, the Company&#146;s total cash and cash equivalents was
$200.7 million, compared to $174.9 million
at December 31, 2001. The Company&#146;s total liquidity, including cash,
short-term marketable securities and undrawn long-term borrowings, was $698.9
million as at March 31, 2002, up slightly from $688.2 million as at December 31,
2001. The increase in liquidity was mainly the result of net cash flow from
operating activities earned during the quarter, partially offset by cash used
for newbuilding installment payments and the payment of dividends. In the
Company&#146;s opinion, working capital is sufficient for the Company&#146;s
present requirements. </P>

<P>Net cash flow from operating activities decreased to $49.1 million in the three months ended March
31, 2002, from $164.5 million in the same period last year, mainly reflecting
the significant decrease in TCE rates. </P>

<P>Scheduled debt repayments were $8.8 million during the three months ended March 31, 2002, compared to $5.8
million during the same period last year. There were no debt prepayments during
the three months ended March 31, 2002. Debt prepayments during the three months
ended March 31, 2001 totalled $92.1 million. </P>

<P>As at March 31, 2002, the Company&#146;s total debt was $936.5 million, compared to $935.7 million as at
December 31, 2001. The Company&#146;s two long-term revolving credit facilities
(the &#147;Revolvers&#148;) provided for additional borrowings of $498.2 million
as at March 31, 2002. The amount available under the Revolvers reduces
semi-annually with final balloon reductions in 2006 and 2008. The Company&#146;s
8.32% First Preferred Ship Mortgage 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 Company&#146;s
unsecured 8.875% Senior Notes are due July 15, 2011. The Company&#146;s
outstanding term loans reduce in quarterly or semi-annual payments with varying
maturities through 2010. The aggregate annual long-term debt principal
repayments required to be made for the five fiscal years subsequent to March 31,
2002 are $43.1 million (2002), $63.6 million (2003), $84.9 million (2004),
$111.1 million (2005) and $130.8 million (2006). </P>

<P>Among other matters, the Company&#146;s long-term debt agreements 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 March 31, 2002, to $448.0
million. Certain of the loan agreements require that a minimum level of free
cash be maintained. As at March 31, 2002, this amount was $75.0 million. </P>

<P>Dividends declared during the three months ended March 31, 2002 were $8.5 million, or $21.5 cents per
share. </P>

<P>During the three months ended March 31, 2002, the Company incurred capital expenditures for vessels and
equipment of $13.9 million. These primarily consisted of $9.6 million for
shuttle tanker newbuilding installment payments. Cash expenditures for
drydocking were $3.9 million in the three months ended March 31, 2002 compared
to $2.2 million over the same period last year. </P>

<P>As at March 31, 2002, the Company was committed to the construction of three shuttle, three Suezmax and
two Aframax tankers scheduled for delivery between December 2002 and December
2003, at a total cost of approximately $411.7 million. As of March 31, 2002,
there have been payments made towards these commitments of $122.5 million and
long-term financing arrangements exist for $51.9 million of the unpaid cost of
these vessels. It is the Company&#146;s intention to finance the remaining
unpaid amount of $237.3 million through either debt borrowing or surplus cash
balances, or a combination thereof. As of March 31, 2002, the remaining payments
required to be made under these newbuilding contracts are as follows: $46.9
million in 2002 and $242.3 million in 2003. Upon delivery, the vessels will be
subject to long-term charter contracts, which expire between 2009 and 2015. </P>

<P>The Company and certain subsidiaries of the Company have guaranteed their share of the outstanding
mortgage debt in three 50%-owned joint venture companies. As of March 31, 2002,
the Company and these subsidiaries have guaranteed $86.9 million of such debt,
or 50% of the total $173.8 million in outstanding mortgage debt of the joint
venture companies. These joint venture companies own three shuttle tankers. </P>

<P>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. </P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>FORWARD-LOOKING
STATEMENTS</FONT></H1>

<P>This Report on Form 6-K for the quarterly period ended March 31, 2002 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; and the future success of the Company. 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.
Important 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; 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, including its Form 20-F for the year ended
December 31, 2001, 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. </P>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY
SHIPPING CORPORATION AND SUBSIDIARIES<BR>
MARCH 31, 2002<BR>
PART I &#150; FINANCIAL INFORMATION</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10%><B>ITEM 3 -</B></TD>
<TD WIDTH=90%><B>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B></TD>
</TR>
</TABLE>

<P>The Company is exposed to market risk from foreign currency fluctuations, changes in interest rates,
bunker fuel prices, and tanker freight rates. The Company uses forward currency
contracts, interest rate swaps, and bunker fuel swap contracts to manage currency,
interest rate, and bunker fuel price risks, but does not use financial
instruments for trading or speculative purposes. </P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<I>Foreign Exchange Rate Risk</I></FONT></H1>

<P>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 three months ended March 31, 2002, approximately 25% 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. </P>

<P>The Company enters into forward contracts as a hedge against changes in certain foreign exchange rates.
As at March 31, 2002, the Company had $54.0 million in foreign exchange forward
contracts that mature as follows: $25.9 million in 2002, and $28.1 million in
2003. To the extent the hedge is effective, 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.</P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<I>Interest Rate Risk</I></FONT></H1>

<P>The Company invests its cash and marketable securities in financial instruments with maturities of less
than six months within the parameters of its investment policy and guidelines. </P>

<P>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. </P>

<P>As at March 31, 2002, the Company was committed to interest rate swap agreements whereby $85.0 million of
the Company&#146;s floating rate debt was swapped with fixed rate obligations
having a weighted average remaining term of 0.8 years, expiring between May 2002
and May 2004. These arrangements effectively change the Company&#146;s interest
rate exposure on $85.0 million of debt from a floating LIBOR rate to a weighted
average fixed rate of 6.40%. </P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<I>Commodity Price Risk</I></FONT></H1>

<P>The Company uses bunker fuel swap contracts as a hedge to protect against the change in the cost of
forecasted bunker fuel costs for certain vessels being time-chartered-out and
for vessels servicing certain COAs. To the extent the
hedge is effective, changes in the fair value of the forward contract 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 in income. As at March 31, 2002, the
Company was committed to bunker fuel swap contracts totaling 53,700 metric
tonnes with a weighted-average price of $109.06 per tonne, which expire between
April 2002 and May 2004. </P>

<P>The Company hedges certain of its voyage revenues through the use of tanker freight rate derivatives. As at
March 31, 2002, the Company had a written freight call option outstanding with a
remaining term of nine months, which could require payments to the counterparty
if monthly average freight rates exceed a specified amount. </P>

<P>The following table sets forth the magnitude of these foreign exchange forward contracts, interest rate
swap agreements, bunker fuel swap contracts, and written freight call option: </P>


<PRE>                                              Contract                Carrying Amount                     Fair
(in USD 000's)                                Amount              Asset           Liability               Value
- ---------------------------------------- ------------------ ---------------- ------------------ --------------------
<U>March 31, 2002</U>
FX Forward Contracts                       $    53,995          $     -         $      541            $    (541)
Interest Rate Swap Agreements                   85,000                -              2,337               (2,337)
Bunker Fuel Swap Contracts                       5,857              546                  -                  546
Written Freight Call Option                      4,498                -                643                 (643)
Debt                                           936,512                  -          936,512             (963,210)

<U>December 31, 2001</U>
FX Forward Contracts                       $    65,500          $               $      343           $     (343)
Interest Rate Swap Agreements                   85,000                -              2,429               (2,429)
Bunker Fuel Swap Contracts                       4,769                -                328                 (328)
Written Freight Call Option                      5,998                -                857                 (857)
Debt                                           935,702                -            935,702             (952,055)
- ---------------------------------------- ------------------ ---------------- ------------------ --------------------
</PRE>

<P><B><I>Inflation</I></B></P>

<P>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. </P>

<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
MARCH 31, 2002<BR>
PART II &#150; OTHER INFORMATION</FONT></H1>

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

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

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

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

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

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 4 - Submission of Matters to a Vote of Security Holders</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 5 - Other Information</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 6 - Exhibits and Reports on Form 6-K</U></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% ALIGN=CENTER>a.</TD>
<TD WIDTH=90%>Exhibits</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>15.1</TD>
<TD WIDTH=85%>Letter from Ernst &amp; Young LLP, as independent chartered accountants, dated May 15, 2002,
regarding unaudited interim financial information.</TD>
</TR>
</TABLE>

<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% ALIGN=CENTER>b.</TD>
<TD WIDTH=90%>Reports on Form 6-K</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(i)</TD>
<TD WIDTH=85%>On February 22, 2002, the Company filed a copy of its press release on Form 6-K
with respect to its results for the quarter ended December 31, 2001. </TD>
</TR>
</TABLE>


<P><B>THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO THE REGISTRATION STATEMENT OF THE
COMPANY ON FORM F-3 FILED WITH THE COMMISSION ON OCTOBER 4, 1995.</B></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SIGNATURES</FONT></H1>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</P>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=45% VALIGN=MIDDLE>
Date:    May 15, 2002
</TD>
<TD WIDTH=55% VALIGN=TOP>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TEEKAY SHIPPING CORPORATION
<BR>
<BR>
<BR>
<BR>
By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>/s/ Peter S. Antturi&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter S. Antturi<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President and Chief Financial Officer<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Duly Authorized Principal Financial and Accounting Officer)<BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>


<P ALIGN=RIGHT><B>Exhibit 15.1</B></P>

<P>To the Shareholders and Board of Directors of<BR>
<B>Teekay Shipping Corporation</B></P>

<P>We are aware of the  incorporation by reference in the  Registration  Statement (Form F-3 No. 33-97746) and related<BR>
prospectus of Teekay Shipping  Corporation  (&#147;Teekay&#148;) for the  registration  of 2,000,000  shares of Teekay common<BR>
stock,  no par value per share,  and to  incorporation  by  reference  therein of our report  dated  April 19, 2002<BR>
relating to the  unaudited  consolidated  interim  financial  statements  of Teekay for the quarter ended March 31,<BR>
2002 that are included in its Form 6-K.</P>

<P>Pursuant  to Rule  436(c) of the  Securities  Act of 1933 our  report is not a part of the  registration  statement<BR>
prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933.</P>

<BR>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
        <TD WIDTH=45%>Vancouver, Canada,<BR>
        May 15, 2002</TD>
        <TD WIDTH=55%>/s/ ERNST &amp; YOUNG LLP<BR>
        Chartered Accountants</TD>
</TR>
</TABLE>


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