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Energy analysts have shown considerable doubt regarding bullish statements that American energy majors will quickly invest vast sums of dollars to fix Venezuela's broken oil infrastructure.

Demand for Solid Assurances

Absent an solid promise of full reimbursement from the American government, analysts expect international firms to act with great care.

“It seems hasty to comment on any upcoming plans,” a representative commented this weekend.

The optimistic timeframe of less than 18 months was boldly outlined. Yet, expert analyses suggest a more cautious outlook.

A Probable Schedule

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

Experts believe energy firms would likely spend:

• Initial phase: Securing new operating agreements.
• The second year: Beginning rebuilding of equipment.
• Year three: Starting to meaningfully increase production.

This suggests an increase of around 500,000 bpd perhaps by the end of the decade.

Appetite Compared to Readiness for Risk

There is a critical difference between firms' attention and their appetite to invest heavily.

“I believe their interest is an eight, on a scale of ten. I think their readiness is a much lower, because there is no clarity yet.”

Experienced observers in the sector share this sentiment. The thinking is that companies will politically call it fantastic while in practice moving with deliberate slowness.

The Enormous Price Tag

The required investment would be vast. Research analysis suggest that increasing production by between 500,000 and a million barrels per day would require over $10 billion in investment over two to three years.

However, returning output to peak levels of around 2.5 million bpd could require a staggering $80 billion to $90 billion over many more years.

The Unanswered Question of Federal Guarantees

The prospect of oil giants being paid back by the government has been repeatedly floated. But, concrete details on such a mechanism have so far not been announced.

Without clarity is the primary factor behind the industry's hesitation. Companies seek safeguards against political risk and the chance that a different president could renege on any deal.

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

Therefore, while political promises runs strong, the practical realities suggest a path of measured steps for potential significant financial commitment in the country's oil sector.