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Industry experts have shown considerable skepticism regarding optimistic predictions that US energy majors will rapidly commit vast sums of dollars to rebuild Venezuela's broken oil infrastructure.

Requirement of Solid Guarantees

Absent an “iron-clad guarantee” of complete repayment from the US federal government, specialists predict international firms to act with significant hesitation.

“It seems premature to speculate on any future business activities,” a spokesperson commented this weekend.

The aggressive timeline of less than 18 months has been boldly suggested. Nevertheless, industry projections paint a more cautious outlook.

A More Realistic Schedule

“It’s probably going to take 36 months for any kind of output increase,” commented one industry expert.

Experts believe oil companies would likely spend:

• Initial phase: Securing new government and security contracts.
• Year two: Commencing rebuilding of facilities.
• The third year: Starting to significantly ramp up production.

This would lead to an rise of around 500,000 bpd perhaps by the end of the decade.

Appetite Compared to Willingness for Spending

There is a important separation between firms' attention and their willingness to spend significantly.

“In my view their curiosity is an eight, on a range of ten. I think their willingness is a four or five, because there is significant uncertainty yet.”

Experienced observers in the country reinforce this sentiment. The thinking is that companies will publicly express enthusiasm while privately proceeding with great care.

The Colossal Cost

The monetary investment would be enormous. Research estimates suggest that adding between 500,000 and a million barrels per day would require over $10 billion in funding over several years.

But, rebuilding production to historical levels of around 2.5 million barrels per day could require a monumental $80 billion to $90 billion over six or seven years.

The Unanswered Issue of Federal Guarantees

The prospect of firms being paid back by the US taxpayer has been repeatedly raised. But, concrete details on any guarantee have not yet been forthcoming.

This lack of a solid plan is the key factor behind the industry's caution. Operators seek protection against political risk and the chance that a subsequent president could cancel any agreement.

“It is essential to be insured against nationalization, that we’ve experienced in Venezuela before.”

In summary, while rhetorical optimism runs high, the financial risks suggest a road of slow deliberation for potential large-scale venture in the Venezuelan oil sector.