S&P Credit Rating

Royal Dutch Petroleum Company The 'Shell' Transport and Trading Company, plc CREDIT RATING Royal Dutch and Shell Transport have today received the following advice from Standard & Poor's: Research Update: Royal Dutch/Shell Group of Companies Publication date: 29-Oct-2004 Primary Credit Analyst(s): Emmanuel Dubois-Pelerin, Paris (33) 1-4420-6673; emmanuel_dubois-pelerin@standardandpoors.com Secondary Credit Analyst(s): Olivier Beroud, London (44) 20-7176-3508; olivier_beroud@standardandpoors.com Eric Tanguy, Paris (33) 1-4420-6666; eric_tanguy@standardandpoors.com Credit Rating: AA+/Watch Neg/A-1+ Rationale On Oct. 29, 2004, Standard & Poor's Ratings Services placed its 'AA+' long-term ratings on the Royal Dutch/Shell Group of Companies (Shell) and its fully owned subsidiaries U.S.-based Shell Oil Co., Netherlands-based Shell Petroleum N.V., and U.K.-based Shell Petroleum Co., Ltd. on CreditWatch with negative implications. At the same time, the 'A-1+' short-term ratings on all of these entities were affirmed. The CreditWatch placement follows the group's announcement that it is considering an additional downward adjustment of 900 million barrels of oil equivalent (boe) to its 14.35 billion boe hydrocarbon proved-reserves total. The overall revision would represent a 6.3% reduction in Shell's current proved-reserves base and would be in addition to the 23% aggregate recategorizations already implemented in first-half 2004. This latest warning about Shell's reserves represents the fifth such announcement about the company's reserves base this year. When Shell's ratings were last affirmed on July 8, 2004, Standard & Poor's did not expect that further significant adjustments to the company's reserves base would be required. The potential 900 million boe volume adjustment could reduce Shell's proved-reserves life to less than 10 years, and the reserve-replacement rate for 2004 is expected to fall short of the already low 60%-80% range forecast by the company earlier this year. Moreover, the volume adjustment could be even higher than the announced 900 million boe. As part of an internal audit currently under way, about 8 billion boe of Shell's proved reserves--55% of the total--have been reviewed; more than 6 billion boe of reserves have yet to be audited. Standard & Poor's acknowledges Shell's robust operating performance and cash flow generation in third-quarter 2004, as well as the company's solid financial profile based on end-September credit measures. The current CreditWatch status reflects the negative impact that another reserves restatement would have on the company's business profile. Standard & Poor's will resolve the CreditWatch status when Shell provides definitive results from its review of the proved-reserves base, expected in early 2005. Standard & Poor's will focus on past and present procedures for proved-reserve booking, key areas of operations, specific projects that led to the adjustment warning, and the impact of another possible reserves recategorization on Shell's long-term production profile and related capital-spending needs. Standard & Poor's will also examine corporate governance issues, factoring in the company's simplified corporate structure achieved through the full merger of Shell's top Dutch and U.K. holding companies. The ratings on Shell reflect Standard & Poor's view that the company's current weaknesses--its exploration performance and internal control issues related to reserves booking--are counterbalanced by the expectation that Shell will maintain its strengths in other areas, notably its very conservative financial profile and policies; very strong and (outside the U.S.) consistently highly profitable global downstream operations; and broad portfolio of upstream assets with competitive, though increasing, development and production costs. Short-term credit factors. Shell's short-term rating is 'A-1+'. Liquidity is strong; at Sept. 30, 2004, the group's $7.4 billion short-term debt--unadjusted for leases and pensions deficit--was partially covered by $2.6 billion in cash and equivalents and $2.5 billion in unused committed credit lines. In addition, internal cash flow generation is currently ample, like that of other major international oil companies. In the final quarter of 2004, and mirroring the third quarter, Standard & Poor's estimates that unadjusted funds from operations (FFO) of close to $6 billion should broadly cover capital expenditures of about $3.0 billion (gross of any asset disposal proceeds), dividends, and share buybacks (including shares repurchased for the share option scheme), reflecting very favorable crude-oil and U.S. natural-gas futures strip prices. No significant acquisition outlays are expected in the near term. As a highly rated global corporation and owner of a massive and diversified asset base, Shell continues to enjoy ongoing, easy access to bank and capital-market debt. Its loan documentation includes no liquidity triggers. Ratings List To From Royal Dutch/Shell Group of Companies Long-term corporate credit rating AA+/Watch Neg AA+/Negative Short-term corporate credit rating A-1+ A-1+ Shell Petroleum N.V. Long-term corporate credit rating AA+/Watch Neg AA+/Negative Short-term corporate credit rating A-1+ A-1+ Shell Petroleum Co., Ltd. Long-term corporate credit rating AA+/Watch Neg AA+/Negative Short-term corporate credit rating A-1+ A-1+ Shell Oil Co. Long-term corporate credit rating AA+/Watch Neg AA+/Negative Short-term corporate credit rating A-1+ A-1+ Senior unsecured debt AA+/Watch Neg AA+ NB: This list does not include all ratings affected. Contact: Investor Relations: David Lawrence +44 20 7934 3855 Gerard Paulides +44 20 7934 6287 Bart van der Steenstraten +31 70 377 3996 Harold Hatchett +1 212 218 3112 Media Relations: Stuart Bruseth +44 20 7934 6238 Simon Buerk +44 20 7934 3453 Lisa Givert +44 20 7934 2914 Bianca Ruakere +44 20 7934 4353 Herman Kievits +31 70 377 8750

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