Uruguay’s Offshore Oil Province Could Be Bigger Than Vaca Muerta

International oil companies are lining up to explore deepwater acreage offshore Uruguay, betting that the South Atlantic margin could host a substantial new oil province mirroring recent finds off Namibia.

Despite a thin exploration record — just three wells drilled to date, all dry — Uruguay has attracted a roster of major operators. Shell, Chevron, Eni, APA Corp, QatarEnergy and Argentina's YPF have secured rights across all seven offshore blocks awarded in recent years.

The first exploration well is expected to be spudded by APA Corp either later this year or in early 2027, with YPF anticipated to follow in late 2027 or early 2028. YPF chief executive Horacio Marín suggested this week that, if resources are confirmed, the province could exceed Argentina's Vaca Muerta shale in scale, pointing to the OFF-5 block in which YPF holds a stake and predicting production potentially running into millions of barrels.

Eni signed an agreement late last year to acquire a 50% share and operatorship of Block OFF-5 from YPF, a deal still pending approval from Uruguayan authorities. QatarEnergy this year bought interests in blocks OFF-2, OFF-4 and OFF-7 from a Shell subsidiary, while Chevron and QatarEnergy have farmed into blocks adjacent to Sintana Energy's OFF-3. Sintana has completed a first season of 3D seismic on OFF-1 and continues efforts to farm out OFF-3.

The surge of interest rests on geological similarities to Namibia's prolific offshore, a legacy of the two coastlines once forming a single landmass. Still, exploration remains at an early stage, with only seismic work under way, and deepwater conditions plus the absence of infrastructure pose development challenges. Operators must first prove hydrocarbons are present before any commercial prospect materialises.

For Malaysian and Southeast Asian readers, the developments signal where global exploration capital is flowing as majors chase high-impact reserve additions. Should Uruguay prove commercial, a new Atlantic producer roughly a decade out could offer supply routes to Asia that bypass chokepoints such as the Strait of Hormuz, with implications for crude trade flows, shipping demand and the competitive landscape for regional offshore service providers seeking deepwater project work abroad.