The largest change is usually if it is a bid system or a grant system. In the bid system, each company or joint venture will offer a bid to gain the rights for the petroleum exploration at the license for a limited period of time.
The highest bid, will obtain the rights. In the grant system, the license will be granted to the company or joint venture that shows the highest interest and ability for the exploration of the license. This can be shown by the company experience, projected plan for the exploration (by high investment) and or longest presence on the country as a exploration company.
Exploration licenses are initially of limited duration (about 5 years) after which there might be a requirement to return half or more of the licensed acreage to the state.
If hydrocarbons are discovered, a separate production license or production-sharing agreement is usually drawn up before development can proceed.
