Royal Dutch/Shell has cut its proved oil and gas reserves by another 10 per cent and warned that it was still struggling to replace the oil and gas it extracted from the ground.

The Anglo-Dutch energy group has now been forced to cut its proved oil and gas reserves by almost a third in 12 months. The news overshadowed its reporting yesterday of record net income of $18.5bn (£9.82bn) in 2004, on the back of high crude prices.