Reuters: Ukraine region rejects Chevron shale gas deal draft (Update 3)

A shale gas deal in Ukraine hit a setback on Tuesday when a local council rejected the government's draft production-sharing agreement with U.S. energy company Chevron amid warnings by nationalists regarding likely damage to the environment.

Officials told Reuters that deputies in Ivano-Frankivsk region, in western Ukraine, had sent the draft back to the government, pressing for guarantees which would address their concerns over the exploration plans.

Chevron wants to tie up a deal to explore the Olesska shale field in western Ukraine. Royal Dutch Shell has already signed a $10 billion deal for shale exploration and extraction at the Yuzivska field in the east of the ex-Soviet republic.

According to the council's website, deputies expressed concerns over the ecological consequences of shale exploration in the mountainous forest region which is known for inland tourist resorts.  MORE