Argentina’s State Oil Company Vows to Drill Off Uruguay. It Has Not Been Cleared To
Energy
Key Facts
—The promise. YPF’s chief executive says the company will drill block OFF-5 off Uruguay between late 2027 and early 2028.
—The claim. He calls the potential “gigantic” and says it could be much larger than Vaca Muerta. Nothing has been found. No well exists.
—The complication. YPF agreed in November 2025 to hand Eni half the block and the operatorship. That transfer is still awaiting Uruguayan government approval.
—The lawsuit. A coalition of environmental groups has gone to court seeking to halt offshore exploration entirely.
—The first well. It will not be YPF’s. APA Corporation drills block OFF-6 first, Uruguay’s first deepwater well since 2016, at a cost near $200m.
—The geology. Uruguay’s shelf mirrors Namibia’s Orange Basin, where the Graff and Venus finds since 2022 hold billions of estimated barrels.
Horacio Marín told a Córdoba audience that YPF Uruguay offshore drilling could dwarf Vaca Muerta, and that he holds the block outright. Both statements sit awkwardly against the paperwork.
The chief executive of Argentina’s state-controlled oil company was unambiguous. If he has to play a chip, he said, he plays it, and he will play it off Uruguay because YPF owns the whole block.
The drilling window he gave was late 2027 to early 2028. The area, he said, could carry millions and millions of barrels of production.
What YPF Uruguay offshore drilling would actually involve
Block OFF-5 lies roughly two hundred kilometres off the Uruguayan coast. It covers about seventeen thousand square kilometres, in water reaching four thousand one hundred metres deep.
YPF took the concession in December 2023 through a subsidiary, on a thirty-year contract with the Uruguayan state oil company. It has not drilled there.
Before any well is sunk, the company must finish reprocessing and interpreting the three-dimensional seismic survey of the area. Only that work fixes where a well would go and how likely it is to find anything.
So the sequence matters. There is no discovery here, no confirmed reservoir, and not yet an agreed drilling location.
The hundred percent that may not be a hundred percent
In November 2025 YPF signed a farm-out agreement with the Italian major Eni. Under it Eni takes fifty percent of OFF-5 and assumes operatorship once the transaction closes.
This newspaper reported three weeks ago that the handover of the block from YPF to Eni had become stuck awaiting Uruguayan government approval. That approval has not been announced.
In June, speaking at an industry conference in Buenos Aires, Marín framed the decision differently. It would be settled with Eni by the end of this year, he said, whether they proceed to drilling.
A month later he described himself as the sole owner taking the exploration risk alone. Meanwhile at least one trade outlet still reports YPF is working to bring in a strategic partner to share that risk.
Why anyone believes in YPF Uruguay offshore drilling
The case is geological, and it is respectable. Africa and South America were once joined, and when they split they left mirror-image sedimentary basins on either side of the South Atlantic.
Everything that works in Africa works in America, Marín put it, and vice versa. Since 2022 the Orange Basin off Namibia has produced the Graff and Venus discoveries, credited with billions of barrels between them.
Preliminary studies suggest the Uruguayan continental shelf might hold around thirty billion barrels of oil equivalent. Specialists attach heavy warnings about deepwater cost and geological risk to that number.
Uruguay has awarded all seven of its offshore blocks. Chevron, Shell, QatarEnergy, APA and YPF hold acreage, having committed well over two hundred and thirty million dollars to early exploration.
What an investor should hold on to
The Vaca Muerta comparison is doing a great deal of work. That formation is onshore unconventional shale in Neuquén, producing around six hundred thousand barrels a day and supplying roughly seventy percent of Argentine output.
OFF-5 is a deepwater conventional prospect with no well. Comparing them speaks to hoped-for scale, not to a like-for-like asset, and the reporting that carried the quote was careful to call it an expectation subject to drilling.
The first real answer comes from someone else. APA Corporation drills OFF-6 before YPF touches OFF-5, in what will be Uruguay’s first deepwater well since 2016, and sources differ on whether that happens this year or next.
Uruguay’s state oil company says that well matters far beyond Uruguay, reading across to the Argentine basin off Mar del Plata and to Brazil’s Pelotas basin. Nature, as its exploration director put it, will say whether it is a geological success.
Has YPF found oil off Uruguay?
It has not. No well has been drilled in block OFF-5, and the company must still finish reprocessing its three-dimensional seismic data before it can even choose where to drill, so the comparison with Vaca Muerta is the chief executive’s expectation of potential scale should hydrocarbons be found, not a description of anything discovered.
Does YPF own the block outright?
It holds the concession, taken in December 2023 on a thirty-year contract, but in November 2025 it agreed to transfer half the block and the operatorship to Eni. That handover has been reported as stuck awaiting Uruguayan government approval, which is why statements about sole ownership and about deciding jointly with Eni have both appeared within a month of each other.
Is anything standing in the way?
A coalition of environmental groups has filed suit seeking to block offshore exploration on the grounds of irreversible harm to marine life, and regulators already require survey vessels to shut down their acoustic equipment when whales approach. The pending Eni approval is a separate obstacle.
Frequently Asked Questions
When does YPF plan to drill block OFF-5 off Uruguay?
YPF's chief executive has stated the company plans to drill block OFF-5 between late 2027 and early 2028. However, the block's operatorship and half its ownership are being transferred to Eni, a deal still awaiting Uruguayan government approval.
What is the geological basis for excitement about Uruguay's offshore potential?
Uruguay's continental shelf mirrors Namibia's Orange Basin, where the Graff and Venus discoveries made since 2022 hold billions of estimated barrels. YPF's chief executive has called the potential 'gigantic,' claiming it could be much larger than Vaca Muerta, though no well has been drilled and nothing has been found.
Which company will drill Uruguay's first deepwater well, and what will it cost?
APA Corporation, not YPF, will drill the first deepwater well in Uruguay, targeting block OFF-6. It will be Uruguay's first deepwater well since 2016, at a cost of nearly $200 million.
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