UAE’s oil potential boosted by promising shale discovery

International shale is one of the emerging themes attracting upstream investment. With the incredible growth in US tight oil over the last decade drawing to a close, unconventional explorers, both Majors and Independents, are looking beyond the Americas for the ‘next big thing.’ In A hydrocarbon copy we singled out Shilaif in the United Arab Emirates as one of the most promising among six early-stage shale plays that could ultimately join the Vaca Muerta (Argentina) and Jafurah (Saudi Arabia) in delivering unconventional production at scale.

The results of the first two Shilaif wells, released last month, justified that call. I asked our upstream experts Rob Clarke and Josh Dixon for their latest thoughts.

Why did you rate Shilaif so highly? 

The geology and scale are important – ADNOC announced the discovery of up to 22 billion barrels of technically recoverable unconventional oil in the Upper Cretaceous Shilaif Formation several years ago. Unlike other unconventional projects in the region, is primarily an oil-prone reservoir. We were encouraged by some of the reservoir properties.

Government support is also key. The UAE has taken a different approach to other governments in the region by awarding concessions to foreign E&P companies. EOG Resources, a leading US-based shale explorer with international experience and a track record of finding new unconventional plays, was granted its first licence - UC03 covering 900,000-acres, in May 2025. The UAE government, ADNOC and its subsidiaries have been supportive of the participation of international service companies and labour ensuring the right equipment and best skills are available. That kick-started the investment momentum timeline leading to the two wells drilled over the summer. EOG has a track record of moving quickly to test new international plays, moving at a similar pace in Oman (2020), Indonesia (2024) and Bahrain (2025).

How did the exploration drilling go? 

Spectacularly well. The two wells, each with one-mile laterals, drilled and brought online in June, each produced more than 25,000 barrels of oil in their first 30 days and are currently flowing naturally before transitioning to artificial lift. Shilaif is understood to be analogous with the liquids-prone area of the Eagle Ford play in Texas where EOG Resources is a major producer.

What’s so good about the results? 

First, productivity – cumulative production of 25,000 barrels of oil in 30-days is up there and even exceeds some of the best acreage in the leading liquids plays in the US. But the total is more remarkable considering it was delivered from one-mile laterals (see chart), half the lateral length of typical US Permian and Eagle Ford wells, where two-mile-plus laterals are common. On a per-foot basis, EOG’s UAE wells clearly outperform indicating promising reservoir quality.

Second, the UAE’s supportive commercial framework. UCO3 is structured as a concession with tax and royalty terms rather than a production sharing contract. Concessions are better suited to the sustained investment typical of unconventional projects.

Third, there is considerable scope for cost reduction. EOG has indicated that these wells were drilled with locally available drilling and completion services. If commerciality is confirmed, higher-spec unconventional equipment, longer laterals and further optimisation will improve drilling efficiency and lower unit costs.

Doesn’t Shilaif still have it all to prove after only two wells? 

Yes, it’s still very early days, and many more wells are required to delineate the play and establish high confidence in EURs (Estimated Ultimate Recovery). The first two wells were located in the same area and landing zone, meaning repeatability across the broader EOG acreage is still unproven. Elsewhere, PETRONAS, and a consortium of Bharat Petroleum and Indian Oil are currently drilling wells on nearby blocks which will add to the understanding.

Ultimately, long-term decline rates, well spacing and reservoir variability will determine the resource quality and commerciality of the play. EOG will hope to build on these successes in future wells, using its experience in the Eagle Ford to drill longer laterals and nail down the best way to complete the reservoirs. US analogues prove there is upside from successful tight oil discovery wells.

Nevertheless, the early results suggest the UAE has the potential to join Vaca Muerta (Argentina) and Jafurah (Saudi Arabia) as the only shale plays outside North America to achieve scale.

What does it mean for UAE’s future production? 

The country has committed to investing US$145 billion (real, 2026) in its domestic upstream oil sector over 10 years to 2030. The overarching goals are to sustain UAE’s oil production and to expand capacity from under 4 million b/d in 2020 to 5 million b/d by 2027. According to ADNOC, capacity reached 4.85 million b/d in 2024. Shilaif, if it delivers on the promise of these early wells, increases the chances of stretching capacity beyond the 5 million b/d target.

UAE of course left OPEC in 2026 and no longer has constraints on production levels. Plans to expand oil export pipelines to reduce dependency on the Strait of Hormuz would help derisk future commercialisation of Shilaif.

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