Shell's quarterly profits sink 70 percent, below expectations

LONDON, July 28 (Reuters) - Royal Dutch Shell (Xetra: A0ET6Q - news) reported a more than 70 percent fall in quarterly profits on Thursday, well below analyst estimates, as weak oil and gas prices further ate into revenue.

Shell (LSE: RDSB.L - news) 's current cost of supplies -- its definition of net income -- came to $1 billion in the second quarter, compared with analyst expectations of $2.2 billion and $3.8 billion achieved the same time last year.

"Lower oil prices continue to be a significant challenge across the business, particularly in the upstream (business)," said Chief Executive Ben van Beurden, who said last month he wants to turn Shell into the best oil company for investor returns.

Shell's second-quarter oil and gas production rose 28 percent year on year, mainly thanks to the contrubution of BG assets, which Shell acquired for $54 billion earlier this year. (Reporting by Karolin Schaps and Dmitry Zhdannikov; Editing by Adrian Croft)