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* May reduce 44-strong fleet by another 10 vessels
* Will take delivery of 2 newbuilds next year
* VLCC market up to 60 vessels oversupplied (Adds detail, CEO comment)
By Balazs Koranyi
OSLO, Nov 29 (Reuters) - Frontline, the world's largest independent oil tanker operator, said it will sell more vessels as the loss-making company fights to survive a depressed shipping industry.
The firm, part of billionaire tycoon John Fredriksen's shipping empire, could sell another 10 older vessels from its 44-strong fleet following a major restructuring earlier this year, Chief Executive Jens Martin Jensen told investors on Thursday.
The global tanker business, much like dry bulk and container shipping, has been in the doldrums for several years as dozens of new vessels ordered before the 2008 global financial crisis came into service after demand had fallen.
With most firms bleeding cash, several shipping companies have been forced to restructure, including Frontline, Italy's Deiulemar Shipping, Indonesia's Berlian Laju Tanker and Sanko Steamship in Japan.
Shipholding Group Inc, the world's No. 2 independent tanker operator, filed for bankruptcy protection last month.
"It's just a very difficult market and will remain so," Jensen told an analyst conference call. "We can only hope next year will be better."
Jensen said that 50-60 very large crude carriers (VLCCs), about a tenth of the global fleet, would need to be taken off the market, to restore its balance.
However, that will be difficult as 44 vessels are scheduled to be delivered next year.
"We think it is a negative tanker market, and that Frontline will report huge losses for the next several years," Erik Folkeson, an analyst at Swedbank First Securities said.
Frontline has already shed more than 10 vessels and got rid of most of its contracts for new ships to improve its balance sheet.
Its two remaining tankers on order will arrive in the second and third quarters of next year and the company expects to take delivery of the vessels.
Jensen said decisions about financing will be made depending on market conditions.
"We're all depending on the market developments... we'll try to slim down the fleet, weather the storm and then see how the market develops," Jensen said.
Although Frontline will need to spend $94 million on its new vessels next year, some analysts said its cash position was stronger than it first appeared.
"Their cash situation is a bit better than I had expected so it's not as negative as you might think," equity analyst Erik Stavseth at Arctic Securities said. "I think the company will survive through 2013 without having to raise new capital."
In the third quarter, Frontline's operating loss narrowed to $26 million from $136 million a year ago but was above expectations for a $13 million loss. (Additional reporting by Vegard Botterli; Editing by Erica Billingham)