HOUSTON—As conflict in the Middle East reinforces the value of a diversified energy supply chain, several countries are looking to tap domestic shale plays, according to new research from Wood Mackenzie.

The firm highlights six countries as current areas of focus:

• The United Arab Emirates, where the Abu Dhabi National Oil Company is moving toward final investment decisions for unconventional gas supporting a 2030 self-sufficiency target, which could lead to more than 300 wells being drilled each year;
• Algeria, which has vast reserves and the potential to transport exports by pipe but faces oil field service bottlenecks;
• Mexico, where Pemex has set 2030 shale gas and tight oil targets amid U.S. trade tensions;
• Australia, which sees the Northern Territory’s Beetaloo gas project as a way to backfill LNG and supply East Coast markets;
• Türkiye, where Continental Resources is working in the Diyarbakır and Thrace basins and advancing exploration at an accelerated pace compared to other companies’ earlier efforts; and
• Indonesia, where regulators are seeking U.S. participation in Sumatra basin tight oil plays, including ones that resemble the Uinta Basin.

Countries have a strong incentive to replicate the U.S. shale success story because doing so would unlock scalable production growth, Wood Mackenzie suggests. “Shale is the most common sedimentary rock in the world, present in virtually every petroleum system,” it notes.

“Shale has allowed the United States and its domiciled E&Ps to drive roughly the same degree of growth over the past two decades as the next 10 countries combined,” the firm adds. “For perspective, Guyana—the industry’s largest conventional growth play—has increased production by just 0.7 million barrels of oil equivalent a day since 2019. U.S. unconventional production has grown by more than four times that rate over the same period.”

Past Hurdles

In the 2010s, the oil and gas industry attempted to scale international shale exploration but had limited success. “Early attempts hit major hurdles in terms of costs and above-ground regulations,” Wood Mackenzie recalls. “Dry holes were common and exploration wells took years to permit and drill, fatiguing management teams and stakeholders. On top of that, the brewing overperformance of U.S. shale set the stage for the 2015 and 2016 oil-price downturn. Exploration spending was slashed and marginal global shale projects became uneconomic.”

Ultimately, the largest global shale explorers redirected capital toward growing opportunities in West Texas. “The Permian was cheaper to develop, easier to execute and faster to scale up,” Wood Mackenzie explains. “It contained better-quality resource, even if projects forfeited the price premium that production in other countries could fetch.”

If the U.S. discovers another play comparable to the Permian, international opportunities may once again struggle to compete for capital. However, Wood Mackenzie says that’s unlikely. “U.S. exploration all but dried up after the horizontal Permian boom took off,” it says. “Frontier drilling was already on a downward trend. The only tangible exploration successes have been new and smaller zones within developed basins, or greenfield play concepts that are a fraction of the Permian’s size.”

Regardless, today’s international shale exploration benefits from lessons learned during the 2010s. For example, Wood Mackenzie says they are far more focused. Instead of chasing more than a hundred opportunities, they are concentrating on 20 particularly appealing areas.

The industry is also filtering out many opportunities with high regulatory risks. “Explorers know the countries to avoid,” says Robert Clarke, vice president of upstream research at Wood Mackenzie. “Bans on hydraulic fracturing or unworkable fiscal terms will make certain projects impossible. Companies also have a better understanding of supply-chain risks, such as red tape that restricts the import of critical drilling and completion equipment.”

Geopolitical considerations have taken some international opportunities off the table, Wood Mackenzie adds. “Russian tight oil in the Bazhenov and Domanik plays is a huge prize that is off limits to Western capital for the foreseeable future,” the firm illustrates. “U.S. companies are unlikely to reengage with China’s Sichuan Basin shale either, despite the country’s national oil companies (NOCs) having some success in tight gas and coalbed methane in the neighboring Ordos basin.”

Leading Players

Wood Mackenzie identifies two operators whose efforts are stoking the fire of international exploration. “Continental has moved into Argentina through multiple deals and will operate one of its Vaca Muerta assets,” the firm begins. “It also has a new unconventional joint venture with the Turkish Petroleum Corp. (TPAO).”

The other company is EOG Resources. “Before the Iran war, EOG had made unconventional entries into Bahrain and the United Arab Emirates,” Wood Mackenzie observes.

“Each of these companies has a strong exploration commitment, access to leading technical skillsets and a history of breaking open new plays,” the firm says. “In fact, some of the global shale 2.0 plays being studied are assets that EOG evaluated in global shale 1.0.”

Shale 1.0, the 2010s era of international shale exploration, produced two major success stories that show meaningful scale is achievable abroad. “Combined, the Argentinian and Saudi Arabian projects will produce more than 2.5 million boe/d in the next decade,” Wood Mackenzie projects. “They are set to absorb a collective $250 billion of capex and could be as transformational to their own domestic markets as the Permian has been to the United States.”

In Saudi Arabia, the Jafurah shale gas project came online in early 2026. “The rich gas play allows for greater oil exports, as the Kingdom can stop burning oil for power generation, particularly in its summer months,” Wood Mackenzie says. “An electrifying economy needs more gas, and volumes from Aramco’s conventional fields alone cannot meet growing demand. Peak production is estimated at 2 billion cubic feet a day of sales gas and over 600,000 bbl/d of condensate.”

In Argentina, the Vaca Muerta play now generates 1 million boe/d. “We think it can produce over 1.6 million boe/d at peak,” Wood Mackenzie assesses. “Competition from 20 companies is driving progress, and there is volume upside from better-developed oil field service support and even more mergers and acquisitions to bring in new players with ideas and ambition. This growing ecosystem of technology, engineering and capital is opening up global waterborne export opportunities for both oil and gas that will strengthen the Argentinian economy.”

Where to Invest

The best international shale prospects need more than appealing geology. “Pathways to infrastructure buildout and flexibility in project planning are also needed, particularly for dense well developments and high-frequency permitting. Partnerships must be incentivized to increase data sharing and collaboration,” Wood Mackenzie says.

“Operators will also need to have confidence that the latest U.S. shale technologies can be imported and deployed at scale,” the firm continues. “One or two high-spec horizontal rigs and pressure pumping fleets entering a country is not enough to meaningfully lower costs.”

“Countries seeking to commercialize projects must customize fiscal arrangements, terms for work programs and licensing,” adds Josh Dixon, senior research analyst at Wood Mackenzie. “Where there is alignment with national interest and the will to make these projects succeed, incentives for investment will follow.”

The full report, A Hydrocarbon Copy: The Upstream Industry’s Return to Shale Exploration, includes a map highlighting countries with unconventional opportunities and more details on the six areas that Wood Mackenzie identifies as the highest priorities: the United Arab Emirates, Algeria, Mexico, Australia, Türkiye and Indonesia.