‘Like dropping a bomb': why is clean energy leader Uruguay ramping up the search for oil?

The Guardian

30-01-2025

When he hears the news, the only words that fisher Francisco Méndez can use are those of war. 'What they are planning to do is like dropping a bomb – and when you drop the bomb, everything dies,' says the 41-year-old father of five.
For 22 years, Méndez has sailed into the Atlantic Ocean, fishing for brotula and striped weakfish alongside his father, brothers and uncles. He is also joined, occasionally, by dolphins and whales, curious about his white and orange vessel. But now Méndez fears his family's way of life and livelihood are under threat.
Renowned for its green energy credentials that see it generating up to 98% of its electricity from renewables, Uruguay is changing tack and ramping up its search for oil in its territorial waters.
Uruguay's new 'black gold' rush has its roots in development more than 7,000km (4,300 miles) away. While the South American country has never found oil on or offshore, its former neighbour Namibia – from when the continents were joined as part of Pangaea – recently did.
In 2022, the south-west African country discovered 11bn barrels of oil off its coast, raising the possibility of similar reserves in Uruguay and leading to a stampede of international oil companies descending on Montevideo.
'We have a very similar geology, very similar spaces,' says Santiago Ferro Castelli, energy transition manager at state-owned energy company Ancap, which is overseeing the exploration.
Seven contracts have been awarded to some of the biggest energy companies in the world to begin oil and gas prospecting. Seismic data acquisition is expected to begin this year, and drilling will begin in 2026. This marks the first time all 120,000 sq km (46,000 sq miles) of Uruguay's offshore acreage is under active contracts.
Ancap estimates there is a 3 to 23% probability that areas off its coast will contain oil or gas, and says as much as 30bn barrels could be found.
Uruguay's late entry into the oil game comes amid a greater race across Latin America and the Caribbean. As the Guardian reported last year, about half of the region's countries are involved in about 50 major new oil and gas projects. Production is expected to outstrip demand, adding 2m barrels a day destined for export by 2030.
The push comes despite the global drive to achieve net zero and a warning from the International Energy Agency that exploration and development of new oil and gas fields must end immediately if the world wants to stay within the safe limits of the climate crisis.
Not all of those in Uruguay's government are positive about the plans. Gerardo Amarilla, undersecretary at the environment ministry, believes his country's exploration is a 'complete contradiction of climate change goals'. 'It is inconsistent to continue searching for oil or diesel at a time when the world is making a commitment to abandon fossil fuels,' he says.
One Uruguayan academic, who wishes to remain anonymous, says that while countries in the global north can argue they 'did not know' about subsequent climate effects when they produced emissions for centuries, countries exploiting today 'cannot claim the same ignorance'.
On the shores of Uruguay, fears are also mounting about what the plans could mean for marine life.
The seismic acquisition involves air guns firing into the sea from large vessels every four to 10 seconds, 24 hours a day, seven days a week, until surveys are completed. The blasts create loud sound waves that can penetrate more than 10km beneath the seafloor and, in the open ocean, be detected thousands of kilometres from the source.
Companies use the results to produce detailed 3D maps, allowing them to define targets for exploratory wells and tap potential reserves if hydrocarbons are discovered.
Environmental researchers say the process is dangerous for marine species and can lead to habitat abandonment, the disruption of mating and feeding, and beach strandings. It can also damage animals' hearing and communication ability, cause the displacement of fish populations, and kill large numbers of zooplankton, a crucial marine food resource.
'It will affect all forms of marine life, from the smallest creatures to our whales,' says Andrés Milessi, a marine biologist of 30 years and director of Mar Azul, a project of the non-governmental organisation Che Wirapitá. Uruguayan waters are rich in biodiversity and home to a great number of creatures, including sperm whales, sea turtles, dolphins and seals.
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Amarilla says the area is of vital importance to flora and fauna, and that during prospecting in the 2010s, several dead whales washed up on the beaches. 'We were never able to prove it was the seismic activity that killed the whales, but is it a coincidence that they died? It has not happened since they stopped,' he says.
It was also during this earlier testing that fishers reported a huge drop in catch. 'Our catches dropped 42% in the year after,' says Juan Riva-Zucchelli, the director of the Chamber of Fisheries.
Méndez says new seismic exploration and drilling plans will be a 'nail in the coffin' for the area's abundant marine life and artisanal fishing communities, which also suffer from illegal fishing. The fisher recalls that, during this period, he constantly had to find new areas to fish, five to 10 nautical miles away from his usual spot.
'It was terrible for us,' he says. 'To be in the sea, to be in nature, is everything. If they go ahead, the fish will die, and those that don't die will leave. My whole family are fishers. It will kill all our livelihoods.'
Uruguayans also fear their country entering uncharted territory and question their preparedness if oil is found.
'Uruguay has no history in hydrocarbon exploitation. So, obviously, we don't have legislation or laws either,' says Milessi, adding that during previous explorations companies 'took advantage', complying with only 'the minimum requirements'.
Another point of contention is Uruguay's position as a leader in clean energy. The country has essentially accomplished the transition other nations are striving for.
More than 90% of Uruguay's energy needs are met by low-carbon sources, and the country exports its surplus energy to neighbouring Brazil and Argentina. Uruguay has also been working toward its long-term green hydrogen goals.
'Our people have not chosen to be an extractivist country. There wasn't the opportunity to vote,' says Milessi, who believes Uruguay would benefit more from protecting the ocean and prioritising a blue agenda.
Ancap argues that, even though Uruguay is not reliant on fossil fuels, other countries are, so finding oil and gas could boost the economy. 'Finding them could be a source of income, and that could be important for the country,' says Ferro.
Such an offer would not go unheeded. Despite being one of the wealthiest countries in Latin America, Uruguay, with a population of 3.4 million, faces problems with the cost of living, education and poverty.
About half of children finish higher secondary school, and one in five children and adolescents live in poverty. Uruguay's prison system is in crisis, with the 13th-highest prison population in the world.
'People here still believe climate change is a problem for the future,' says the academic. 'For now, the government is trying to keep quiet about the oil exploration – most people don't even know about it. But if they discover the oil, then they will promote it, saying the money will be used for education and hospitals. It's like putting a cake in the entrance of a school and telling the children you can't eat it.'
The environment ministry is conducting a study on the environmental impacts and will arrange a public hearing once it has concluded. It adds that companies must meet strict requirements if prospecting begins.
Pablo Gristo, head of exploration and production at Ancap, says the company is adopting the 'most stringent guidelines and protocols' regarding oil exploration and remains 'fully on board' with promoting energy transition projects.
The local fishers, however, who say they have not yet been informed about the proposals, fear their prospects are bleak.
'The artisanal fisher is disappearing; we are already in the extinction zone,' says Pablo Acosta, a third-generation fisher in La Paloma, a small coastal town. 'The businessmen have already stripped the land of the animals. And now they are going to strip the sea.'