TO THE MEMBERS

Dear Sirs

US OIL POLLUTION - CERTIFICATION UNDER OPA 90

Further to the Association's notice to Members of 20th December, 1996, we are now in a position to advise the following developments.

Arvak Ltd.

The documentation originally circulated by Arvak Ltd. included requirements for letters from P&I Clubs in terms which this Association was unable to provide. The documentation has been amended and the Association is able to issue the letters required from P&I Clubs in the event that Members decide to obtain their COFR guaranties from Arvak Ltd.

Beyond the information provided in our earlier circular, very little additional information is available about the structure of Arvak Ltd., although we understand that the company has a low capital base and is almost entirely reliant on reinsurance.

The Shipowners Insurance and Guaranty Company Ltd. (SIGCo)

We confirm our previous advice about SIGCo (the successor to First Line), which is available to Members for provision of COFR guaranties effective from 28th December, 1996.

Shoreline Mutual (Bermuda) Limited

Shoreline continues to provide guaranties as a mutual COFR facility.

We will continue to advise Members of any subsequent developments of significance in relation to any of these COFR facilities.

Yours faithfully