The news disappointed the market with the price of the group's shares sliding in both London and Amsterdam. In a statement to the London Stock Exchange, the group, commonly known as Shell, said a "number of issues were identified with specific fields, primarily in North West Europe and Australasia." "As a result, a further 250 million boe (barrels of oil equivalent) of proved reserves will be re-categorised as at the end of 2002. "In addition Shell has reduced the volume of proved reserves it planned to book in 2003 by approximately 220 million boe," which includes volumes from the Ormen Lange field in Norway. About 95 percent of the volumes impacted by the latest reductions were previously booked as proved undeveloped reserves from non-producing fields, Shell said. The expected impact on earnings from the latest re-categorisation was approximately 20 million dollars (16 million euros), it said. Write-off costs related to the original re-categorisation in January amounted to 10 million dollars after tax. In London, the price of Shell shares closed down 3.0 percent at 360.75 pence. Royal Dutch shares fell 3.5 percent to 38.17 euros in Amsterdam. "It's obviously another negative for the stock," said Sandford Bernstein analyst Ben P. Dell, adding that while the downgrade "isn't particularly notable to earnings ... people are reacting with surprise to the news that the new set of management have had to downgrade reserves for the second time running." The oil giant angered investors with its announcement on January 9 that it had re-categorised 3.9 billion barrels of oil and gas -- one-fifth of its reserves -- from proved to unproved. The debacle led to the sacking of chairman Philip Watts, who was replaced by Jeroen van der Veer, previously vice chairman of the group and president of Royal Dutch Petroleum, the Netherlands-based arm of the business. "Shell recognises that restoring confidence and credibility in reserves reporting practices is vital," the group's statement said Thursday. "Shell is determined to resolve all these issues in the most timely and transparent manner possible and to eliminate chances of a recurrence," it added. Last month the US Securities and Exchange Commission (SEC) launched a formal inquiry into Shell's original downgrade. Shell is also facing a class action lawsuit in the United States from shareholders who allege the oil group deliberately violated accounting rules by misreporting its reserves in filings to the SEC. The New York Times meanwhile reported Wednesday that the US Justice Department was investigating whether Shell violated any laws by failing to disclose a significant shortfall in its reserves. Shell said on Thursday that is was considering the views of investors and various advisory bodies regarding overall governance of the group, including composition and operation of the parent and holding company boards. Speculation has grown that the group could overhaul its management structure, rooted in two countries, in response to investor criticism following the initial downgrade. Under the Anglo-Dutch oil giant's unusual ownership structure, London-based Shell owns 40 percent of the group and Netherlands-domiciled Royal Dutch Petroleum Company holds 60 percent. Shell's current management committee oversees the separate boards of the Dutch and British companies. PIN/AFP