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Industry experts have voiced considerable skepticism regarding optimistic predictions that US energy majors will quickly pump vast sums of dollars to revive the country's broken oil infrastructure.

Demand for Iron-Clad Protections

Lacking an solid promise of complete repayment from the Washington, specialists predict international firms to act with significant hesitation.

“It is too early to speculate on any potential investments,” a representative stated this weekend.

The aggressive schedule of less than a year and a half has been boldly outlined. Yet, realistic assessments paint a different picture.

A Probable Timeline

“Chances are going to take 36 months for any significant production bounce,” said one industry expert.

He suggested oil companies would likely spend:

• The first year: Sorting through new government and security contracts.
• The second year: Investing in overhaul of infrastructure.
• The third year: Starting to meaningfully increase production.

The result could be an rise of around 500,000 bpd perhaps by the end of the decade.

Appetite Compared to Readiness for Risk

Analysts draw a critical difference between firms' attention and their appetite to invest significantly.

“I believe their attention is an eight, on a scale of ten. However, their readiness is a much lower, because there is a lack of certainty yet.”

Veteran observers in the sector reinforce this sentiment. They believe that majors will politically call it fantastic while actually acting with deliberate slowness.

The Enormous Cost

The required outlay would be enormous. University projections suggest that increasing production by between 500,000 and a million bpd would require over $10 billion in funding over two to three years.

But, returning output to peak levels of around 2.5 million bpd could require a staggering $80 billion to $90 billion over six or seven years.

The Outstanding Issue of Federal Guarantees

The suggestion of firms being reimbursed by the federal government has been often floated. However, specific plans on this proposal have not yet been forthcoming.

Without clarity is the main reason behind the industry's hesitation. Firms seek protection against sovereign risk and the chance that a different government could refuse any promise.

“You need to be insured against political change, that we’ve experienced in Venezuela already.”

Therefore, while political confidence runs strong, the financial realities suggest a path of slow deliberation for any large-scale financial commitment in the Venezuelan energy industry.