The first step in prospecting for oil is to obtain an exploratory license which is given by oil authorities. Each country has its own process for awarding exploratory licenses. A company can also acquire an exploratory license from another oil company.
Conducting geological surveys
After the oil exploration license is acquired, the company creates geophysical and geological maps of the area, using seismic surveys. Sensitive instruments are placed on the ocean surface or on the land and a charge is detonated. By the amount of time it takes for the sound waves from the explosion to reflect back, the company can estimate the structure of the bedrock and it also aids its search for rocks which can hold oil and gas.
Taking clues from the seismic maps, exploratory drilling is carried out. It can take up to three months and during this time, the company analyzes samples. If oil and gas are found, the company drills fringe wells to determine the size of the reservoir. Around this time, petroleum engineers will do some number crunching, to determine if it would be feasible to drill for oil. From here, it may be four to ten years, before the company can actually start producing oil from the well.