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Market specialists have shown significant skepticism regarding optimistic statements that US oil giants will quickly pump vast sums of dollars to fix the country's crumbling oil infrastructure.

Requirement of Absolute Assurances

Without an absolute assurance of complete repayment from the Washington, analysts expect multinational oil companies to proceed with extreme caution.

“It is too early to comment on any upcoming plans,” a representative said this weekend.

The aggressive timeframe of less than 18 months was publicly proposed. Yet, realistic assessments paint a different picture.

A Probable Outlook

“Chances are going to take 36 months for any significant recovery in production,” said an chief investment officer.

Experts believe oil companies would likely spend:

• Year one: Sorting through new regulatory frameworks.
• The second year: Investing in rebuilding of equipment.
• The third year: Starting to significantly ramp up production.

This suggests an boost of around half a million barrels per day perhaps by the end of the decade.

Appetite Compared to Readiness for Investment

There is a important separation between firms' attention and their appetite to invest substantially.

“I believe their attention is an eight, on a scale of one to 10. However, their appetite is a much lower, because there is a lack of certainty yet.”

Experienced operators in the region reinforce this sentiment. The expectation is that firms will politically call it fantastic while privately acting with deliberate slowness.

The Vast Cost

The monetary bill would be enormous. Independent analysis suggest that adding between 500,000 and a million bpd would require more than $10 billion in funding over several years.

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

The Outstanding Question of Government Backing

The suggestion of firms being reimbursed by the federal government has been often raised. But, concrete details on this proposal have so far not been forthcoming.

The absence of certainty is the main factor for the industry's reluctance. Companies seek safeguards against sovereign risk and the risk that a different administration could renege on any deal.

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

Therefore, while rhetorical optimism runs strong, the operational realities suggest a path of measured steps for potential large-scale venture in the Venezuelan energy industry.