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Industry experts have shown deep skepticism regarding bullish statements that US energy majors will rapidly pump billions of dollars to revive the country's broken energy sector.

Demand for Iron-Clad Guarantees

Absent an “iron-clad guarantee” of full reimbursement from the Washington, experts believe multinational oil companies to move with extreme caution.

“It is too early to comment on any future business activities,” a representative commented this weekend.

The aggressive timeframe of under a year and a half has been publicly proposed. Nevertheless, realistic assessments paint a different picture.

A Probable Outlook

“Chances are going to take multiple years for any meaningful output increase,” said an chief investment officer.

The analysis indicates oil companies would likely spend:

• Year one: Securing new government and security contracts.
• Following phase: Investing in rebuilding of facilities.
• Final phase: Being able to significantly ramp up output.

This would lead to an boost of around half a million bpd possibly by the end of the decade.

Interest vs. Appetite for Investment

Analysts draw a important separation between companies' curiosity and their appetite to invest significantly.

“In my view their attention is an high score, on a range of ten. But their willingness is a mid-range score, because there is a lack of certainty yet.”

Seasoned diplomats in the country share this view. The expectation is that majors will politically call it fantastic while privately moving with great care.

The Vast Investment Required

The required bill would be enormous. University analysis suggest that increasing production by between 500,000 and a million barrels per day would require more than $10 billion in capital spending over two to three years.

However, returning production to previous 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 Question of Government Backing

The suggestion of energy companies being compensated by the US taxpayer has been repeatedly raised. But, specific plans on such a mechanism have so far not been provided.

The absence of a solid plan is the primary impediment for the sector's reluctance. Firms seek safeguards against nationalization and the chance that a subsequent administration could cancel any agreement.

“It is essential to be protected from sovereign risk, that we’ve seen in Venezuela before.”

Ultimately, while rhetorical optimism runs high, the financial challenges suggest a path of extreme caution for potential significant venture in the Venezuelan energy industry.