UAE Tests a New Frontier in Shale Oil

EOG drives UAE shale appraisal with early success as the Gulf takes initial steps toward building unconventional oil capacity

6 Sep 2025

EOG Resources’ appraisal of a shale prospect in the United Arab Emirates has drawn industry attention after initial drilling in the Al Dhafra area delivered early oil flows, marking a rare move toward unconventional development in the Gulf.

The US independent secured the acreage in 2025 and has since advanced a series of tests that analysts view as a cautious but notable step for a region dominated by low-cost conventional production. Oil flowing to the surface during early appraisal has increased expectations that the UAE could establish a foothold in shale resources long concentrated in North America.

EOG holds full equity and operatorship during the appraisal phase. Abu Dhabi National Oil Company retains an option to join later, a structure that allows the US group to apply its experience in tight-rock drilling while giving ADNOC scope to build domestic capability once results are better understood.

Company executives have described the block as one of the most attractive unconventional prospects outside the US. They say the acreage offers a rare chance to deploy established shale techniques in a region that is beginning to test new forms of resource extraction.

Analysts note that the initiative fits a wider trend as producers examine unconventional methods to maintain competitiveness. Service companies are preparing for possible demand for specialised rigs and completion services if the project moves toward full development. Water supply and variable rock quality remain potential obstacles, although these have not damped interest in the early results.

Economics will be central to any next steps. Unconventional output must compete with the Gulf’s low-cost barrels, a challenge that has slowed similar efforts elsewhere in the region. Even so, early indications from Al Dhafra have increased market interest and prompted closer scrutiny of the UAE’s longer-term plans.

As testing continues, the country has become a focal point for investors tracking whether unconventional resources could add a new layer to the UAE’s production base. Strong appraisal results could open investment pathways and support a gradual expansion of domestic shale capacity.