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Market specialists have shown considerable skepticism regarding bullish claims that US energy majors will swiftly pump tens of billions of dollars to revive the country's crumbling production facilities.

Requirement of Iron-Clad Protections

Without an solid promise of financial backing from the Washington, specialists predict global energy giants to move with great care.

“It seems too early to discuss any future business activities,” an official said this weekend.

The aggressive schedule of less than a year and a half has been publicly suggested. However, expert analyses suggest a different picture.

A Likely Schedule

“It is likely going to take three years for any kind of output increase,” commented one energy analyst.

He suggested energy firms would likely spend:

• The first year: Navigating new operating agreements.
• Following phase: Investing in reconstruction of equipment.
• Year three: Being able to significantly ramp up yield.

This would lead to an increase of around 500,000 barrels per day perhaps by 2029.

Appetite Compared to Appetite for Investment

Experts make a critical difference between companies' curiosity and their appetite to invest heavily.

“I think their curiosity is an eight, on a scale of ten. I think their readiness is a mid-range score, because there is a lack of certainty yet.”

Veteran diplomats in the country reinforce this sentiment. The thinking is that majors will publicly call it fantastic while privately acting with extreme caution.

The Enormous Investment Required

The financial investment would be enormous. Research analysis suggest that adding between 500,000 and a million bpd would require more than $10 billion in capital spending over several years.

However, rebuilding production to peak levels of around 2.5 million barrels per day could require a massive $80 billion to $90 billion over many more years.

The Pending Issue of Taxpayer Funding

The prospect of firms being reimbursed by the government has been often mentioned. Nevertheless, specific plans on any guarantee have so far not been forthcoming.

Without a solid plan is the key reason for the sector's hesitation. Companies seek safeguards against political risk and the risk that a subsequent government could renege on any agreement.

“They must be insured against nationalization, that we’ve seen in Venezuela already.”

Therefore, while political promises runs strong, the financial risks suggest a road of slow deliberation for potential large-scale financial commitment in the Venezuelan oil sector.