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Industry experts have shown significant skepticism regarding optimistic predictions that US oil giants will quickly commit vast sums of dollars to fix the country's broken oil infrastructure.

The Need for Solid Protections

Absent an “iron-clad guarantee” of financial backing from the US federal government, experts believe multinational oil companies to move with extreme caution.

“It seems too early to discuss any future business activities,” a spokesperson commented this weekend.

The aggressive schedule of under a year and a half was publicly proposed. Nevertheless, realistic assessments indicate a different picture.

A Likely Outlook

“Chances are going to take multiple years for any meaningful output increase,” commented one energy analyst.

Experts believe operators would likely spend:

• The first year: Sorting through new operating agreements.
• The second year: Investing in reconstruction of equipment.
• Final phase: Being able to meaningfully increase production.

The result could be an boost of around half a million barrels per day possibly by the end of the decade.

Appetite Compared to Appetite for Risk

Analysts draw a important separation between firms' attention and their appetite to invest significantly.

“I think their attention is an eight, on a range of ten. I think their appetite is a mid-range score, because there is significant uncertainty yet.”

Experienced diplomats in the country reinforce this caution. The thinking is that firms will publicly express enthusiasm while privately proceeding with great care.

The Enormous Price Tag

The required outlay would be vast. Research estimates suggest that adding between 500,000 and a million bpd would require over $10 billion in funding over two to three years.

However, rebuilding production to historical levels of around 2.5 million bpd could require a monumental $80 billion to $90 billion over six or seven years.

The Pending Issue of Government Backing

The prospect of oil giants being compensated by the federal government has been repeatedly raised. However, concrete details on any guarantee have so far not been provided.

The absence of a solid plan is the primary factor for the sector's caution. Companies seek protection against nationalization and the chance that a subsequent president could renege on any agreement.

“You need to be protected from nationalization, that we’ve witnessed in Venezuela previously.”

Ultimately, while political promises runs high, the financial realities suggest a journey of extreme caution for any significant investment in the country's oil sector.