In unconventional reservoirs, such as shale reservoirs, the use of sliding-sleeve completions along with chemical swelling external casing packers can lead to increased production rates. This method has been used in unconventional reservoirs (shale) that are drilled horizontally (for maximum reservoir exposure) and hydraulically fracture stimulated in multiple stages. When fracturing a new zone, it is necessary to isolate the various zones that have been previously fractured. By using completion assemblies with sliding sleeves and swell packers activated with chemicals, the various pay zones in a single wellbore can be managed with the option of closing off one or more sliding sleeves at a future date, and isolation is facilitated by using the swell packers.Swell packers can be activated using water-or hydrocarbon-based fluids. However, these conventional fluids have shown a tendency to damage certain shale formations, thus increasing operator concern when using such fluids in shale reservoirs.A new environmentally acceptable shale-optimized activation fluid system was developed for use with swell packers. It is an oil-external invert-emulsion consisting largely of an aqueous internal phase incorporated into the hydrocarbon external phase. It is an effective low-leakoff fluid that provides controllable swell profiles for the swell packers while causing minimum physio-chemical damage to shale. Additionally, the system is free of any benzene, ethylbenzene, toluene, and xylenes (BETX) hydrocarbons and incorporates an environmentally acceptable emulsifier. This provides it with an improved environmental profile. Moreover, this emulsion can be stabilized with nanomaterials to promote longevity under high-temperature reservoir conditions up to 225°F. This paper documents the laboratory investigation and development of the novel environmentally acceptable activation fluid system.