The alliance centers on the offshore block OFF-5, a vast area covering approximately 17,000 square kilometers located some 200 kilometers off the Uruguayan coastline. The site lies in waters ranging from 800 to 4,100 meters deep, positioning it among the region’s most geologically significant and technically challenging offshore domains. Under the terms of the agreement finalized on November 25, 2025, ENI will acquire a 50% stake in the block from YPF’s subsidiary Miwen and will assume operational control pending regulatory approval from Uruguayan authorities.
This joint venture emerges amidst a backdrop of heightened optimism, fueled by recent discoveries in analogous basins along the African margin—particularly Namibia’s Orange Basin—where ENI and other international companies have identified significant oil and gas reserves. Geological studies indicate that the South American Atlantic margin shares a similar tectonic and sedimentary history with that African region, supporting the hypothesis that the offshore Uruguayan block could harbor comparable hydrocarbon accumulations.
YPF’s president and CEO, Horacio Marín, emphasized that the initiative represents an important step forward in expanding the company’s footprint beyond Argentina’s continental shelf into deepwater exploration. He highlighted the potential transformative impact for Uruguay, a nation currently devoid of domestic oil production and reliant upon imports refined by the state oil company Ancap. Marín projected that if commercially viable reserves are found, the development could stimulate investment, infrastructure growth, employment opportunities, and substantial state revenues. While he acknowledged prevailing geological uncertainties and estimated the probability of discovery below 50%, he remained optimistic that forthcoming seismic surveys and exploratory drilling could reveal significant deposits.
The exploration campaign will commence with advanced three-dimensional seismic studies planned for 2026, primarily to refine subsurface imaging and identify prospective drilling targets. Based on these findings, the drilling of the first exploratory well is tentatively scheduled for late 2027 or early 2028. The process will involve sophisticated offshore technology, considerable capital commitment, and a protracted timeframe typical of frontier deepwater exploration worldwide.
Environmental and social concerns already surface within Uruguay, where grassroots organizations have petitioned judicial authorities to halt exploratory activities, citing potential risks to marine ecosystems and biodiversity. These groups seek temporary injunctions to prevent the deployment of vessels and drilling equipment until a thorough legal review of existing contracts with Ancap is conducted. The companies and government agencies remain under scrutiny to balance economic ambitions with environmental stewardship.
Beyond Uruguay, this partnership reinforces the growing strategic collaboration between YPF and ENI in the region. Earlier this year, both firms agreed on infrastructure projects related to liquefied natural gas exports from Argentina’s Vaca Muerta shale play, underscoring a multifaceted relationship built on combining regional knowledge with global technical expertise.
Should exploration efforts prove successful, Uruguay could join the ranks of South American nations with offshore oil production, reshaping its energy matrix and positioning itself as a new player in the Atlantic hydrocarbon landscape. For now, both YPF and ENI advance cautiously but confidently, propelled by promising geological data and a shared vision for unlocking the energy potential hidden beneath Uruguay’s maritime frontier.
This article was curated and published as part of our South American energy market coverage.
