A comprehensive review and modeling of the natural and induced fluid, completion, and formation damage processes and their governing mechanisms involving the various aspects of gas-bearing shale reservoir formations is presented. The damage potential of shale formations containing large quantities of clay and nonclay inorganic, and organic materials, and natural fractures filled with cement and other debris is delineated. The thermal, chemical, and stress interactions between the drilling and fracturing fluids and shale formations are described. The relevant processes and their fundamental mechanisms, including under/over balanced drilling, fracturing-fluid disposition and detainment, wettability and nonequilibrium fluid transport and spontaneous imbibitions, swelling and fluidization, and gas and water blockage occurring in extremely-low permeability shale porous media are reviewed. The critical review presented here provides valuable insights into the nature of the shale-gas reservoir formation damage, indicating the significant roles of the different orders of magnitude rate processes and the thermal, chemical, and stress shocks causing formation damage during drilling, completion, and production. The significant differences observed between the rates of adverse processes can be facilitated to effectively control, minimize, and/or prevent the common shale-gas reservoir production problems. The scientifically-guided protocol provided concerning the fluid, completion, and formation damage processes can help in effective mitigation of the flow assurance problems associated with hydraulically-fractured wells completed in gas-bearing shale reservoirs to maximize the well productivity.