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Industry experts have shown considerable skepticism regarding recent predictions that US energy majors will quickly commit tens of billions of dollars to revive Venezuela's crumbling oil infrastructure.

Requirement of Solid Guarantees

Without an solid promise of financial backing from the American government, experts believe international firms to move with extreme caution.

“It would be premature to discuss any upcoming plans,” a representative commented recently.

The optimistic timeframe of less than 18 months has been publicly outlined. Yet, realistic assessments paint a different picture.

A Likely Outlook

“It’s probably going to take three years for any kind of output increase,” noted an industry expert.

Experts believe energy firms would likely spend:

• The first year: Navigating new government and security contracts.
• Following phase: Investing in reconstruction of equipment.
• Year three: Starting to boost output.

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

Appetite Compared to Appetite for Risk

Experts make a key distinction between multinationals’ interest and their appetite to invest substantially.

“I think their attention is an high score, on a scale of ten. I think their willingness is a four or five, because there is a lack of certainty yet.”

Experienced operators in the region echo this caution. They believe that companies will politically talk up the opportunity while actually acting with deliberate slowness.

The Vast Cost

The monetary outlay would be enormous. Research estimates suggest that adding between half a million and a million bpd would require in excess of $10 billion in funding over two to three years.

But, returning output to historical levels of around 2.5 million bpd could require a massive $80 billion to $90 billion over many more years.

The Unanswered Question of Taxpayer Funding

The idea of energy companies being reimbursed by the US taxpayer has been repeatedly raised. But, specific plans on such a mechanism have not yet been provided.

This lack of clarity is the primary reason for the sector's reluctance. Companies seek guarantees against political risk and the chance that a future president could renege on any promise.

“They must be shielded from political change, that we’ve seen in Venezuela previously.”

Therefore, while political promises runs strong, the practical challenges suggest a road of slow deliberation for any large-scale venture in the Venezuelan energy industry.