Beat 1/2 cup butter with sugar in small bowl with electric mixer on medium-high speed until light and fluffy, 3 minutes. Add rolled oats and flour; beat until smooth.
Press into greased 8-inch-square or 9-inch-square baking pan. Bake for 20 minutes.
Meanwhile, heat condensed milk, 1/4 cup butter and brown sugar to a boil in heavy saucepan over medium heat. Boil, stirring constantly, 5 minutes. Remove from heat; stir in vanilla.
Pour caramel mixture over cooked base; allow to cool completely.
Melt the remaining butter in saucepan over medium heat. Stir in cocoa and water until smooth. Add confectioners sugar; stir until mixed well. Spread over cooled caramel layer. Allow to set before cutting into bars.