LONDON, Feb 4 (AFP) - Credit rating agency Standard and Poor's Ratings Services said Friday it was trimming its rating on energy giant Royal Dutch/Shell over concerns about the company's poor reserve replacement position.
S and P cut Shell's long-term debt rating to "AA" from "AA plus" previously and said that the outlook for further changes was stable.
Shell unveiled on Thursday record full-year 2004 earnings but also said the group had replaced proved reserves by "a poor 45-55 percent during 2004, excluding the impact of the period's divestments and year-end pricing," said S and P analyst Emmanuel Dubois-Pelerin in a statement.
The analyst also said that Shell had announced a fifth straight cut in its proved reserves estimates and added: "Accordingly, we estimate that proven reserves amounted to only some 12 billion barrels of oil equivalent, or about 8.5 years of production, at December 31, 2004, a level significantly below that of most oil companies globally."
Shell is struggling to regain investors' trust after admitting last year it had overstated its proven reserves, and that senior executives were aware of problems long before they were made public.
The world's third-biggest oil group subsequently announced that it was merging its Dutch and British holding companies in an attempt to restore confidence.
02/04/2005 15:59 GMT - AFP