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Industry experts have shown considerable skepticism regarding optimistic statements that American energy majors will swiftly pump tens of billions of dollars to fix the country's crumbling production facilities.

Requirement of Iron-Clad Assurances

Absent an solid promise of financial backing from the Washington, experts believe global energy giants to proceed with extreme caution.

“It would be hasty to speculate on any potential investments,” a spokesperson said recently.

The optimistic timeframe of under 18 months was publicly proposed. Yet, realistic assessments paint a different picture.

A Likely Schedule

“It is likely going to take 36 months for any kind of recovery in production,” noted one energy analyst.

He suggested energy firms would likely spend:

• The first year: Securing new operating agreements.
• Year two: Commencing reconstruction of equipment.
• The third year: Reaching a position to significantly ramp up output.

This would lead to an boost of around half a million bpd possibly by 2029.

Desire Versus Readiness for Risk

There is a key distinction between multinationals’ interest and their readiness to commit substantially.

“I think their attention is an eight, on a scale of ten. I think their appetite is a much lower, because there is significant uncertainty yet.”

Veteran observers in the region echo this caution. They believe that companies will publicly talk up the opportunity while privately proceeding with great care.

The Vast Price Tag

The monetary investment would be enormous. University analysis suggest that increasing production by between 500,000 and a million barrels per day would require over $10 billion in capital spending over several years.

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

The Outstanding Issue of Taxpayer Funding

The suggestion of oil giants being reimbursed by the federal government has been repeatedly mentioned. But, formal assurances on this proposal have so far not been provided.

Without certainty is the primary factor for the industry's reluctance. Firms seek guarantees against political risk and the risk that a subsequent president could refuse any deal.

“You need to be protected from sovereign risk, that we’ve experienced in Venezuela already.”

Therefore, while political promises runs high, the operational realities suggest a road of slow deliberation for potential major venture in the Venezuelan energy industry.