BP said it signed contracts in Montevideo following successful bids in March. The contracts for three deep-water blocks cover an area of about 9,600 square miles. State oil company ANCAP reserves the right to take a 30 percent interest in any discoveries made offshore.
"This is a material entry into an under-explored deep-water basin on the Atlantic margin," BP Vice President of Exploration Mike Daly said. "We look forward to working with ANCAP and the Uruguayan authorities to explore this large area and understand the potential of these blocks."
BP said it expects to carry out seismic surveys of the area starting next year. Few oil discoveries have been confirmed offshore Uruguay. Seismic studies have suggested Uruguay's north basin, adjacent to Brazil, could yield both oil and natural gas, however.
The U.S. Energy Department's Energy Information Administration reported last year that there could be significant deposits of natural gas in Uruguay.