ADNOC Hits Oil at UAE Shale Block

Drilling operations are now underway, with ADNOC successfully bringing oil to the surface at a shale block in Al Dhafra, a significant step in its co‑development with EOG Resources. The project remains on track, aligning with the timeline set out by the Houston operator to begin drilling in the second half of 2025. This milestone was confirmed by EOG’s chairman and chief executive, Ezra Yacob, during the Barclays CEO Energy‑Power Conference in New York.

EOG Resources received the Unconventional Onshore Block 3 concession earlier this year, granting it full operatorship over roughly 3,609 square kilometres—almost 900,000 acres—in an over‑pressured, oil‑prone basin in Abu Dhabi’s Al Dhafra region. ADNOC will partner through the appraisal phase and may participate in production if development proceeds.

The drilling activity marks a pivotal evolution from planning to execution. ADNOC is actively drilling horizontal wells and confirming the productivity of the shale formation by testing oil to the surface. It demonstrates the project's technical viability and potential—crucial signals for investors and regional energy planners.

This collaboration underscores Abu Dhabi’s strategic push to tap unconventional energy sources, a drive reinforced through other initiatives such as the creation of Turnwell Industries—an ADNOC Drilling venture with SLB and Patterson‑UTI aimed at unconventional oil and gas extraction via smart drilling and production technologies. The Turnwell joint venture reflects UAE ambition to diversify its energy base and leverage advanced extraction methods.

EOG’s move into Bahrain—where it has signed a gas exploration pact with Bapco Energies and already tested horizontal gas to surface at an onshore prospect—expands its Middle East presence beyond Abu Dhabi. This broader footprint signals growing U. S. upstream engagement across the Gulf, spurred by deepening commercial and strategic ties.

The significance of EOG’s concession should not be understated. The 3,609 km² block in the Al Dhafra region is one of the largest conventional onshore concessions awarded in recent years. It offers robust potential for shale oil development akin to prolific U. S. plays—but the venture still faces technical, fiscal, and geological uncertainties.

EOG reaffirmed its 2025 capital plan will remain unchanged, suggesting confidence in controlled spending despite the high stakes of frontier shale development. This financial discipline could shape appraisal strategies, drilling pace, and scope of field evaluation.

Financial analysts are watching closely. The announcement drove investor interest in EOG Resources, though technical analysis signals remain mixed. Some indicators warn of overbought conditions and short‑term volatility, even as medium‑term trends show promise. Market sentiment will likely hinge on the pace of drilling milestones and appraisal results.