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Market specialists have voiced considerable doubt regarding bullish statements that US large firms will rapidly pump billions of dollars to fix the country's broken energy sector.

The Need for Iron-Clad Assurances

Lacking an absolute assurance of financial backing from the Washington, specialists predict international firms to move with extreme caution.

“It is hasty to discuss any upcoming plans,” an official said this weekend.

The aggressive timeline of under a year and a half has been publicly proposed. However, realistic assessments suggest a longer timeline.

A More Realistic Timeline

“It’s probably going to take multiple years for any kind of production bounce,” commented one energy analyst.

The analysis indicates operators would likely spend:

• The first year: Sorting through new operating agreements.
• Following phase: Beginning rebuilding of facilities.
• Final phase: Starting to boost output.

This would lead to an rise of around 500,000 bpd maybe by the end of the decade.

Appetite Compared to Willingness for Risk

There is a important separation between firms' attention and their willingness to spend significantly.

“In my view their curiosity is an high score, on a range of ten. However, their willingness is a four or five, because there is significant uncertainty yet.”

Veteran diplomats in the region reinforce this view. The thinking is that majors will publicly talk up the opportunity while in practice moving with deliberate slowness.

The Vast Investment Required

The monetary investment would be vast. Research analysis suggest that increasing production by between 500,000 and a million bpd would require in excess of $10 billion in investment over several years.

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

The Pending Issue of Federal Guarantees

The prospect of firms being reimbursed by the US taxpayer has been repeatedly raised. Nevertheless, concrete details on this proposal have not yet been provided.

Without a solid plan is the key reason for the sector's hesitation. Operators seek protection against sovereign risk and the chance that a different administration could refuse any agreement.

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

Therefore, while rhetorical promises runs high, the financial challenges suggest a journey of slow deliberation for any major venture in the country's oil sector.