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Market specialists have voiced deep doubt regarding recent claims that US energy majors will quickly commit billions of dollars to fix Venezuela's dilapidated energy sector.

The Need for Absolute Assurances

Absent an “iron-clad guarantee” of complete repayment from the Washington, specialists predict global energy giants to proceed with extreme caution.

“It seems premature to discuss any potential investments,” a spokesperson said recently.

The ambitious timeframe of less than 18 months has been boldly outlined. Yet, realistic assessments indicate a longer timeline.

A More Realistic Schedule

“Chances are going to take multiple years for any meaningful output increase,” commented an chief investment officer.

He suggested oil companies would likely spend:

• Initial phase: Sorting through new operating agreements.
• Year two: Commencing overhaul of equipment.
• The third year: Being able to boost output.

This would lead to an rise of around 500,000 barrels per day maybe by late 2028.

Interest vs. Readiness for Spending

Experts make a critical difference between firms' attention and their willingness to spend heavily.

“I believe their interest is an eight, on a scale of ten. However, their appetite is a mid-range score, because there is significant uncertainty yet.”

Experienced observers in the country echo this caution. The thinking is that majors will publicly express enthusiasm while actually moving with extreme caution.

The Enormous Investment Required

The financial outlay would be vast. University projections suggest that adding between 500,000 and a million bpd would require over $10 billion in capital spending over several years.

However, returning production to historical levels of around 2.5 million bpd could require a staggering $80 billion to $90 billion over many more years.

The Pending Question of Government Backing

The suggestion of firms being paid back by the US taxpayer has been often raised. Nevertheless, specific plans on such a mechanism have not yet been announced.

Without a solid plan is the key reason behind the sector's reluctance. Operators seek protection against nationalization and the risk that a subsequent president could cancel any promise.

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

Ultimately, while political confidence runs strong, the financial realities suggest a journey of extreme caution for potential large-scale financial commitment in the Venezuelan oil sector.