Eni takes control of Uruguay’s OFF-5 block and expands offshore position with second deal

Eni has formally entered Uruguay’s offshore oil and gas sector after completing an agreement with MIWEN, a wholly owned subsidiary of Argentina’s YPF, and state energy company ANCAP for the transfer of a 50% interest in exploration block OFF-5.

Following approval by the Uruguayan authorities, the Italian company has also assumed operatorship of the block. MIWEN will retain the remaining 50% interest as a non-operating partner.

The transaction completes a process announced in November 2025, when Eni reached an initial agreement with YPF to acquire half of the licence and take responsibility for its exploration programme.

No financial terms were disclosed.

OFF-5 covers approximately 16,883 square kilometres of the South Atlantic, around 200 kilometres from the Uruguayan coast. Water depths range from approximately 800 to 4,100 metres, placing much of the licence in deep and ultra-deep waters.

The block remains in its first exploration period. Work is currently focused on interpreting geological and geophysical information, defining potential prospects and assessing whether the subsurface conditions justify further investment.

Eni said it will apply its proprietary exploration technologies to accelerate the evaluation of the area. The company has not announced a drilling date for OFF-5, however, and the agreement does not represent confirmation that commercially recoverable oil or gas has been identified.

That distinction is particularly important in Uruguay, which has attracted several of the world’s largest energy groups but has yet to register a commercial offshore hydrocarbon discovery.

YPF originally obtained the OFF-5 licence through Uruguay’s open offshore bidding system and signed the exploration and possible production contract with ANCAP in December 2023. The interest was subsequently transferred to MIWEN, its dedicated subsidiary for the project.

Under Uruguay’s production-sharing model, exploration costs and risks are assumed by the contractors. Companies would only receive a share of eventual production if exploration leads to a commercially viable development.

The arrival of Eni therefore gives Uruguay an operator with substantial deepwater experience while allowing YPF to retain exposure to the block without carrying sole responsibility for its technical and financial execution.

Eni is simultaneously expanding into OFF-6, an adjacent offshore licence operated by US energy company APA Corporation.

Under a separate agreement, Eni will acquire a 40% working interest in OFF-6, while APA will retain operatorship and the remaining 60%. Completion of that transaction remains subject to the applicable conditions and approvals.

APA has said Eni will fund most of the first exploration well planned for the block, allowing the American company to reduce its individual exposure to a high-risk and capital-intensive drilling campaign.

The well is currently expected to begin from September 2027. Its execution will depend on environmental and regulatory authorisations, the availability of a suitable drilling vessel, logistical preparations and weather and ocean conditions.

OFF-6 is especially significant because its exploration programme includes an actual drilling commitment. Most of the current activity in other Uruguayan blocks remains concentrated on seismic surveys, geological modelling and the identification of potential drilling targets.

The proposed well would be drilled from a dynamically positioned vessel supported by offshore service ships and infrastructure connected to the port of Montevideo.

For Eni, combining interests in OFF-5 and OFF-6 creates a broader regional exploration position. The adjacent licences can provide complementary geological information and allow the company to evaluate several potential prospects rather than relying on the outcome of a single block.

The strategy also reflects renewed international interest in the South Atlantic margin. Discoveries in Namibia and Suriname have encouraged energy companies to reconsider geologically related but comparatively underexplored basins on the opposite side of the Atlantic.

Uruguay has awarded contracts for all seven offshore areas included in its current exploration programme. Companies involved in the licences include Shell, Chevron, APA Corporation, QatarEnergy, YPF and Eni.

QatarEnergy entered three Uruguayan blocks earlier in 2026, while Chevron has assumed operatorship of OFF-1. These transactions have increased the technical and financial capacity available for exploration without requiring ANCAP to assume the direct cost of drilling.

Nevertheless, geological similarities with successful petroleum regions do not guarantee discoveries. ANCAP itself describes the Uruguayan offshore as a frontier exploration area where the probability of finding a commercially viable reservoir remains low.

The country’s previous deepwater well, Raya X-1, was drilled in 2016 but did not result in a commercial discovery. The information obtained from that campaign has nevertheless contributed to the geological models now being used to evaluate the new licences.

The addition of Eni to OFF-5 and OFF-6 represents an endorsement of Uruguay’s geological potential, but the projects remain at a stage where capital is being invested to reduce uncertainty rather than to develop proven reserves.

The OFF-5 transaction also extends a rapidly growing relationship between Eni and YPF.

The two companies are already working with Abu Dhabi-based investment group XRG on Argentina LNG, an integrated project designed to produce gas from the Vaca Muerta formation and convert it into liquefied natural gas for international markets.

The initial development envisages two floating liquefaction facilities with capacity of six million tonnes per year each, providing a combined annual output of 12 million tonnes of LNG. The project also includes upstream production, treatment plants, pipelines and export infrastructure off Argentina’s Río Negro province.

YPF, Eni and XRG submitted Argentina LNG for admission to Argentina’s Large Investment Incentive Regime in August 2026. A final investment decision is targeted for the end of the year, although the project remains subject to engineering, financing, regulatory and commercial milestones.

Eni has also agreed to acquire 32% interests in three Vaca Muerta blocks intended to supply gas to the LNG development. YPF will retain 36%, with XRG holding the remaining 32%, once the transaction is completed.

The alliance is consequently developing on two distinct fronts. In Argentina, the partners are preparing an integrated gas production and export platform. In Uruguay, Eni and YPF are sharing the geological and financial risk of frontier offshore exploration.

For YPF, the arrangement provides access to Eni’s experience in deepwater exploration and floating LNG projects. For the Italian company, it creates a larger South American position spanning potential offshore resources, unconventional gas and future LNG exports.

Uruguay could also benefit before any discovery is made. Seismic acquisition and drilling programmes require port services, vessels, environmental monitoring, logistics, technical contractors and specialised personnel.

However, the scale of any longer-term economic impact will depend entirely on exploration results. Even a successful well would need further appraisal, commercial analysis, environmental review and extensive infrastructure investment before production could begin.

Eni’s entry therefore changes the corporate structure and technical capacity behind Uruguay’s offshore programme, but it does not yet change the country’s status as a non-producing frontier market.

The strategic value of the two agreements lies in positioning: Eni obtains control of one large offshore block and exposure to the first major drilling campaign planned in an adjacent licence, while Uruguay gains another experienced international operator willing to invest in determining whether its Atlantic waters contain commercially viable resources.