U.S. energy company Chevron said it was still looking for opportunities in Ukraine, but opted to shelve a contract to tap the country's shale gas potential.

In October, members of a regional council in Ukraine approved a draft production agreement for shale natural gas with Chevron. The deal was formalized in November.

Ukraine is one of the Eastern European countries thought to be rich in shale natural gas and the government estimates there may be enough natural gas in shale plays to meet the country's needs without imports.

Peter Clark, country manager for Chevron, told the Kiev Post the company terminated the production agreement because of legislative hurdles in Ukraine.

"We have just terminated that PSA (product sharing agreement)," Clark said in comments published Monday. "When it was signed, things had to be done, but not all of them got done."

Royal Dutch Shell has a $10 billion contract to explore Ukrainian shale. British-based exploration and production company JKX Oil & Gas started a multistage hydraulic fracturing operation in Ukraine last year, describing it as likely the largest operation of its kind in Europe to date.

Clark said the company was waiting for a federal decision to streamline tax laws, though a November deadline for an agreement passed without any progress.

Dialogue with Kiev, he said, was ongoing and the company was eager to "see what's available" in Ukrainian shale.

The U.S. Energy Information Administration estimates Ukraine holds about 42 trillion cubic feet of shale gas reserves, putting it at the No. 5 position in terms of European shale.