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Market specialists have shown deep skepticism regarding recent claims that American energy majors will quickly invest billions of dollars to revive Venezuela's dilapidated production facilities.

The Need for Absolute Guarantees

Without an solid promise of financial backing from the Washington, analysts expect global energy giants to move with significant hesitation.

“It seems premature to speculate on any upcoming plans,” an official commented in response.

The aggressive schedule of under a year and a half was publicly outlined. Nevertheless, realistic assessments paint a more cautious outlook.

A Likely Schedule

“Chances are going to take multiple years for any significant recovery in production,” noted an industry expert.

He suggested operators would likely spend:

• Initial phase: Sorting through new government and security contracts.
• Following phase: Investing in reconstruction of equipment.
• The third year: Starting to boost yield.

This suggests an increase of around half a million bpd possibly by 2029.

Desire Versus Readiness for Investment

There is a critical difference between companies' curiosity and their appetite to invest substantially.

“I think their curiosity is an eight, on a scale of one to 10. But their readiness is a much lower, because there is no clarity yet.”

Experienced operators in the country echo this sentiment. The expectation is that majors will politically talk up the opportunity while privately proceeding with deliberate slowness.

The Colossal Investment Required

The monetary investment would be enormous. University estimates suggest that increasing production by between 500,000 and a million bpd would require in excess of $10 billion in capital spending over several years.

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

The Unanswered Question of Government Backing

The idea of firms being paid back by the US taxpayer has been repeatedly floated. Nevertheless, concrete details on any guarantee have not yet been provided.

Without a solid plan is the key factor for the sector's caution. Companies seek guarantees against nationalization and the possibility that a subsequent president could renege on any promise.

“They must be protected from political change, that we’ve experienced in Venezuela before.”

Ultimately, while political promises runs high, the financial realities suggest a path of extreme caution for potential major investment in the Venezuelan oil sector.