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Industry experts have shown significant doubt regarding bullish predictions that American energy majors will quickly invest vast sums of dollars to fix the country's dilapidated oil infrastructure.

The Need for Iron-Clad Protections

Without an “iron-clad guarantee” of complete repayment from the US federal government, experts believe international firms to proceed with significant hesitation.

“It is too early to speculate on any potential investments,” a spokesperson said this weekend.

The ambitious timeline of less than 18 months was boldly proposed. However, industry projections indicate a longer timeline.

A Likely Schedule

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

Experts believe operators would likely spend:

• Year one: Securing new government and security contracts.
• Following phase: Beginning reconstruction of facilities.
• The third year: Being able to meaningfully increase output.

This would lead to an rise of around half a million barrels per day possibly by 2029.

Desire Versus Readiness for Investment

There is a critical difference between multinationals’ interest and their appetite to invest significantly.

“I think their attention is an eight, on a range of one to 10. I think their readiness is a mid-range score, because there is a lack of certainty yet.”

Veteran diplomats in the sector reinforce this caution. The expectation is that companies will politically express enthusiasm while in practice acting with deliberate slowness.

The Vast Cost

The monetary bill would be enormous. Independent estimates suggest that adding between 500,000 and a million barrels per day would require more than $10 billion in investment over two to three years.

But, restoring output to peak levels of around 2.5 million barrels per day could require a monumental $80 billion to $90 billion over many more years.

The Outstanding Issue of Federal Guarantees

The idea of firms being compensated by the federal government has been often raised. However, specific plans on such a mechanism have not yet been announced.

The absence of clarity is the primary reason behind the sector's hesitation. Companies seek protection against sovereign risk and the risk that a different administration could cancel any promise.

“They must be protected from nationalization, that we’ve experienced in Venezuela previously.”

Ultimately, while rhetorical optimism runs strong, the practical risks suggest a road of measured steps for any significant investment in the country's energy industry.