Teekay Offshore Partners L.P. Announces 12.5 Percent Increase to Third Quarter Distribution

Hamilton, Bermuda – November 3, 2008 – Teekay Offshore GP LLC, the general partner of Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) (NYSE: TOO), has declared a cash distribution of $0.45 per unit for the quarter ended September 30, 2008, an increase of $0.05 per unit, or 12.5 percent, from the previous quarter.

“We are pleased to announce another significant increase to the Partnership’s quarterly distribution,” commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. “This increase is the result of the Partnership’s acquisition in June of an additional 25 percent interest in OPCO and two Aframax lightering tankers from Teekay Corporation and reflects our confidence in the Partnership’s long-term, fixed-rate cash flows and contract counterparties.”

The cash distribution is payable on November 14, 2008 to all unitholders of record on November 7, 2008.

About Teekay Offshore Partners L.P.

Teekay Offshore Partners L.P., a publicly-traded master limited partnership formed by Teekay Corporation (Teekay) (NYSE: TK), is an international provider of marine transportation and storage services to the offshore oil industry. Teekay Offshore Partners L.P. owns a 51 percent interest in and controls Teekay Offshore Operating L.P. (OPCO), a Marshall Islands limited partnership with a fleet of 34 shuttle tankers (including 9 chartered-in vessels), four floating storage and offtake units (FSO) and 11 conventional crude oil Aframax tankers. In addition, Teekay Offshore Partners L.P. has direct ownership interests in two shuttle tankers and one FSO. Teekay Offshore Partners L.P. also has rights to participate in certain floating production, storage and offloading (FPSO) opportunities.

Teekay Offshore Partners’ common units trade on the New York Stock Exchange under the symbol “TOO”.

Teekay Offshore Partners L.P.