LONDON (Bloomberg) ? Bermuda-based Frontline Ltd., the world?s biggest oil-tanker operator by capacity, said it may spin off a company that will oversee the conversion of vessels nearing obsolescence into oil-rig transporters.

Frontline expects to announce its plans ?within this week?, according to a statement released to the Oslo stock exchange on Monday. The company, based in Hamilton, is in the process of creating the unit, to be known as Sealift Ltd., and has hired Bert Bekker, former chief executive officer of Dockwise Transportation NV, to head it.

Frontline said it intends to hold a 33 percent stake in the spun-off company and is investigating the possibility of bringing in outside investors. It has one oil tanker already being converted, a second to be changed over next year and four options for similar conversions. These are the vessels that would be managed by Sealift.

Oil tankers with only one layer of steel separating their cargoes from the ocean are due to be banned starting in 2010, with an outright exclusion of such vessels five years later. That?s because they carry a greater risk of spillage in the event of a collision or a grounding. Oil companies including BP Plc, Europe?s second largest, are already shunning such vessels in favour of ones with double hulls that are safer.