Sir Philip Watts, the Shell chairman, rebuffed calls to quit as he faced investors for the first time since the company cut its proven reserves by 20 per cent, sending shockwaves through the oil sector.

Sir Philip said: "No, I will not resign. I am determined to fix the situation and pursue the strategic changes we have started."

His defiance came as Shell revealed net fourth-quarter profits down 19 per cent and a month after the Anglo-Dutch company raised doubts over fields holding 3.9 billion barrels of oil.

While some shareholders called for his resignation over the blunder, Sir Philip said he had the "wholehearted" support of the company's two boards, one Dutch one British.

He announced a series of meeting with investors designed to be a "real learning" experience for Shell investors.

However, he disappointed some investors by ruling out a revamp of Shell's board structure, which has attracted criticism for creating bureaucracy and slowing down decision making.

"Despite the two parents structure we operate as a single entity," he said, adding that the set-up had not "got in the way of management doing its job".

The company's fourth-quarter profits of $1.87 billion also disappointed the City, which had forecast earnings of $2.0bn. Many rival oil companies, including Exxon-Mobil and Chevron-Texaco, have reported results ahead of market expectations.

Shell shares stood 6.75p lower at 358.75p in afternoon trade.

The profits slide reflected a loss of $334m at the company's chemicals division, which, in the last three months of 2002, had reported a $128m profit. The fall-off was blamed on restructuring charges, high raw material prices and provisions for litigation.

Shell's key exploration and production unit saw profits rise by 12 per cent to $2.20bn as higher oil prices more than made up for an output decline of 4 per cent.

The company also announced it had recategorised as "proven" 4.6 per cent of the fields it announced last month could no longer be guaranteed. The company replaced in reserves 98 per cent of the oil it produced last year, a higher figure than analysts had feared.

Sir Philip, who is due to stand down as chairman in 2005, pledged that rate would rise to at least 100 per cent for the next five years.

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