Houston Business Journal: Royal Dutch/Shell suffers credit downgrade: “Standard & Poor's Ratings Services said Friday it has lowered Royal Dutch/Shell's corporate credit ratings to 'AA' from 'AA+.'”: “S&P estimates that Shell's proven reserves amounted to only some 12 billion barrels, or about 8.5 years of production, at the end of 2004, a level S&P said is "significantly below that of most oil companies globally." (ShellNews.net) 4 Feb 05

Standard & Poor's Ratings Services said Friday it has lowered Royal Dutch/Shell's corporate credit ratings to 'AA' from 'AA+.' The firm also removed from CreditWatch its long-term corporate credit ratings on Royal Dutch/Shell, including its Houston-based Shell Oil Co. subsidiary.

At the same time, the 'A-1+' short-term corporate credit ratings on all of these entities were affirmed.

The long-term ratings were placed on CreditWatch on Oct. 29, 2004, following Shell's announcement that it was considering an additional downward adjustment of 900 million barrels of oil equivalent to its 2003 hydrocarbon proven-reserves total of 14.35 billion barrels.

This announcement came on the heels of Shell's restatement of 4.45 billion barrels of reserves for 2002.

S&P said Shell's replacement of proven reserves during 2004 was "a poor 45%-55%."

Poor's credit analyst Emmanuel Dubois-Pelerin, said Shell's audit of reserves, launched in 2004 and now completed, will lead to a recategorization of 2003 proven reserves "by a significant 1.4 billion barrels of oil equivalent." It will be Shell's fifth such adjustment of its reserves figures in less than a year.

S&P estimates that Shell's proven reserves amounted to only some 12 billion barrels, or about 8.5 years of production, at the end of 2004, a level S&P said is "significantly below that of most oil companies globally."

This estimate indicates that Shell replaced only about 70 percent of its reserves from 2001 to 2005, S&P said.

S&P said that its affirmation of its ratings on Shell last July, which included a negative outlook, were based on assumptions that reserves would not be significantly restated and that they would be fully replaced during 2004-2005.

http://www.bizjournals.com/houston/stories/2005/01/31/daily63.html