The Anglo-Dutch group said a review of an oil field in Norway had revealed stocks to be 250 million barrels lower than previously thought, bringing the total reserves reassessed this year to 4.15 billion barrels.
Malcolm Brinded, Shell’s new head of exploration and production, described the shortfall as "disappointing and embarrassing". One oil industry analyst called it "mind blowing".
Announcing "remedial measures" to tighten its system of confirming reserves in future, Brinded added: "I am determined the group cannot again stumble in such a manner."
He said a review of booking procedures would be completed within six weeks, but the stock market showed little patience and shares in London fell 3 per cent to 361p, while stock in the Dutch arm fell 3.3 per cent to 38.23.
The shares have fallen some 10 per cent since the first cut in reserves in January.
However, Brinded and Jeroen van der Veer, who became Shell’s chairman following the resignation earlier this month of Sir Philip Watts, refused to be drawn on possible further changes to the senior management team.
They also refused to speculate on whether further adjustments to reserves estimates would be required as a result of the review.
The latest downgrade came as a result of a report by Ryder Scott, the US-based consultants brought in after concerns over the planned re-booking of Ormen Lange, the Norwegian field, which had been part of the re-categorisation on 9 January when Shell slashed 3.9 billion barrels off its reserves.
That announcement had left Shell’s proven reserves at the end of 2002 at 15.5 billion barrels, not the 19.4 billion stated earlier. Brinded added yesterday that the shortfall will wipe 11 million from earnings, while the cost of writing off wells following the re-categorisation is estimated at 5.5m.
The latest revelation comes after a tough couple of months for Shell - an investor backlash has forced Watts and Walter van de Vijver, the previous head of exploration and production, from their jobs, after the board said it was no longer able to say the erroneous bookings had been made "in good faith".
The company has been left to explore ways to overhaul its management structure in a desperate effort to address investor concerns.
This week, US federal criminal prosecutors launched an investigation into Shell. The US attorney’s office for the southern district of New York joined the country’s financial watchdog, the Securities and Exchange Commission, to look at the background to the company’s restatement of reserves.
The UK’s Financial Services Authority has also requested information regarding the circumstances surrounding the reserves downgrade.
Shell’s annual report had been due out today and its AGM planned for 23 April. The report is now due at the end of May, while the meeting has been rescheduled for 28 June.
Bruce Evers, an oil analyst at Investec, said: "This is mind blowing. My biggest worry was that more was going to come out and that’s exactly what happened. It’s going to take a long time to restore credibility."
Another analyst added: "You can’t trust them. I want to see just one thing from them - tell me once and for all this is the right number, the real number, then we can start to think again about buying the stock."