ChannelNewsAsia: S and P watching Shell for possible debt downgrade: “LONDON : Standard and Poor's Ratings Services said it had its eye on Royal Dutch/Shell for a possible downgrade of the oil company's debt rating in case of a further restatement of its reserves.”: “This latest warning about Shell's reserves represents the fifth such announcement about the company's reserves base this year, S and P said.” (ShellNews.net)

Posted 30 Oct 04

LONDON : Standard and Poor's Ratings Services said it had its eye on Royal Dutch/Shell for a possible downgrade of the oil company's debt rating in case of a further restatement of its reserves.

The credit rating agency said it had placed its AAplus long-term ratings on Shell on CreditWatch with negative implications.

At the same time, Standard and Poor's stood by its A1plus short-term ratings.

The move follows Shell's announcement on Thursday that it is considering cutting its total hydrocarbon proved-reserves by 900 million barrels of oil equivalent.

The overall revision would represent a 6.3 percent reduction in Shell's current proved-reserves base and would be in addition to the 23 percent recategorizations already-made in first-half 2004. it said.

This latest warning about Shell's reserves represents the fifth such announcement about the company's reserves base this year, S and P said.

"Standard and Poor's acknowledges Shell's robust operating performance and cash flow generation in third-quarter 2004, as well as the company's solid financial profile based on end-September credit measures," said S and P credit analyst Eric Tanguy.

"The current CreditWatch status reflects the negative impact that another reserves restatement would have on the company's business profile."

The company announced plans Thursday to merge its separate holding companies and to overhaul its corporate governance structures to restore investor confidence following its oil reserves scandal.

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