Why the Middle East Is Betting on Shale

Wood Mackenzie names six countries fast-tracking shale development as energy security fears reshape where global drilling capital flows next

30 Apr 2026

The Permian Basin made fortunes and flooded markets. Now, with its best growth years behind it, the engineers and capital that built it are looking for new rock to crack. A report published on April 16th by Wood Mackenzie, an energy research firm, identifies six countries moving quickly to capture that expertise: Algeria, the UAE, Mexico, Australia, Turkey and Indonesia.

The drivers vary by country but share a common thread. Geopolitical anxiety, rising domestic energy demand and a desire for self-sufficiency have pushed governments to revisit unconventional reserves that once seemed too costly or complicated to develop. Algeria eyes a chance to pipe more gas to European buyers. The UAE, more ambitiously, wants full domestic gas self-sufficiency by 2030.

Abu Dhabi's national oil company, ADNOC, is close to final investment decisions on projects that could require drilling more than 300 wells a year. EOG Resources, a Texas-based operator with deep Permian experience, has already entered Bahrain and the UAE, bringing with it the drilling and completion techniques that unlocked American shale.

That transfer of expertise matters because the economics of international shale have improved, partly by default. Eight large operators spent $230bn building Permian positions between 2012 and 2025. With that basin maturing, their next dollar of short-cycle capital must go somewhere else. Wood Mackenzie counts just 20 high-quality international plays under serious evaluation, down from more than 100 a decade ago. The shortlist has grown sharper.

"The greatest advantage for global shale 2.0 is that there is no new US play on the scale of the Permian Basin to compete for future short-cycle capital," said Robert Clarke, VP of Upstream Research at Wood Mackenzie.

The scale of what is possible can be seen in two existing projects. Saudi Arabia's Jafurah gas field and Argentina's Vaca Muerta formation are together expected to produce more than 2.5m barrels of oil equivalent per day over the next decade, drawing $250bn in combined investment. They offer a template, not a guarantee.

Bottlenecks remain. Oilfield services are stretched globally. Import restrictions on drilling equipment hamper several target markets. Fiscal terms in some countries still fail to meet investor requirements. For governments willing to align their licensing frameworks with commercial realities, the opportunity is real. For those that are not, the capital will simply flow elsewhere.