Uruguay has become known for running its power grid almost entirely on renewable energy, yet it is now advancing offshore oil and gas exploration.
The state energy firm ANCAP has issued licences for offshore exploration across a vast stretch of the South Atlantic, aiming to drill its first well in 2026. Though the estimated chance of finding commercially viable reserves ranges from 3% to 23%, the geological setup bears similarities to recent discoveries off the coast of Namibia, which has helped to reignite interest in Uruguay’s deepwater blocks.
What makes this worth watching is that Uruguay does not need oil to meet its energy demand. Over 99% of its electricity comes from renewable sources, mostly hydropower, wind and biomass. With no domestic oil consumption to displace, any future fossil production would instead generate export revenue or help diversify state income.
Challenger Energy Group Plc (LON:CGE) is an Atlantic-margin focused energy company, with production, development, appraisal, and exploration assets in the region. Challenger Energy’s primary assets are located in Uruguay, where the Company holds two high impact offshore exploration licences, totalling 19,000km2 (gross) and is partnered with Chevron on the AREA-OFF 1 block. Challenger Energy is quoted on the AIM market of the London Stock Exchange.
