Shell has, for the third time this year, cut its estimate of it proven oil reserves, adding that it was slicing more than $400 million from profits to account for the "disturbing deficiencies" in its reporting practices.

The oil giant also confirmed that Judy Boynton was to step aside as finance director in the third senior departure since the company in January revealed its first downgrade of reserves previously classified as "proven".

This morning's statement, which took to 4.35 billion barrels of oil the level of proven reserves recategorised for 2002 with a further 0.5 billion barrels of oil downgraded for 2003, follows the findings of an investigation Shell commissioned by consultants in January.

A 463-page report lodged late last month revealed that Sir Philip Watt, who resigned as Shell chairman in March, and Walter van der Vijver, who quit as of exploration and production, had for two years discussed the rebooking of reserves.

While Mr van der Vijver, who is fighting allegations over his own role in the debacle, last November said he was "sick and tired about lying" about the reserves revisions that "need to be done" he in December ordered the destruction of a document warning of the widespread implications of reclassification.

Lord Oxburgh and Aad Jacobs, chairmen of Shell's UK and Dutch boards, said in a joint statement this morning: "The report revealed disturbing deficiencies in our past reserves reporting practices and the manner in which Shell dealt with those issues."

This morning's downgrade lowered to 60 per cent the level of output that Shell replaced through new finds last year.

The company said it was reducing net earnings for four years to 2003 by $100 million a year.

Shell shares stood 1.75p lower at 391p in morning trade.

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