TOO Teekay Offshore Partners LP

Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE: TOO) announces that it intends to issue 500-700 million NOK in new senior unsecured bonds in the Norwegian bond market that mature in November 2013 which, at current conversion rates, have an aggregate principal amount equivalent to approximately USD 85-120 million. The proceeds of the bonds are expected to be used for general partnership purposes including repayment of existing credit facility debt. Teekay Offshore expects to apply for listing of the bond on the Oslo Stock Exchange.

A portion of the bonds may be offered in the United States to qualified institutional investors (or QIBs) as defined in Rule 144A of the U.S. Securities Act of 1933 (the Securities Act) concurrently with bonds offered outside of the United States pursuant to Regulation S of the Securities Act.

DnB NOR Markets has been appointed as arranger of the contemplated bond issuance.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of the bonds or any other security of Teekay Offshore. The bonds have not been and will not be registered under the Securities Act or any state securities laws. Unless so registered, the bonds may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. These risks and uncertainties include, but are not limited to, those discussed in Teekay Offshore's public filings with the U.S. Securities and Exchange Commission. Teekay Offshore undertakes no obligation to revise or update any forward looking statements, unless required to do so under the securities laws.

About Teekay Offshore

Teekay Offshore Partners L.P., a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK), is an international provider of marine transportation, production and storage services to the offshore oil industry. Teekay Offshore owns a 51 percent interest in and controls Teekay Offshore Operating L.P., a Marshall Islands limited partnership with a fleet of 33 shuttle tankers (including six chartered-in vessels), four FSO units, eleven conventional oil tankers. Teekay Offshore Operating L.P. has also agreed to acquire two newbuilding shuttle tankers from Teekay Corporation upon the commencement of their respective time-charter contracts in 2011. In addition, Teekay Offshore has direct ownership interests in two shuttle tankers, two FSO units, and two FPSO units. Teekay Offshore also has rights to participate in certain other FPSO and FSO opportunities of Teekay Corporation.

Teekay Offshore Partners' common units trade on the New York Stock Exchange under the symbol "TOO".

Contacts: Teekay Offshore Partners L.P. Kent Alekson Investor Relations Enquiries + 1 (604) 609-6442 www.teekayoffshore.com