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Industry experts have shown considerable doubt regarding recent predictions that US energy majors will rapidly pump tens of billions of dollars to rebuild the country's crumbling energy sector.

Requirement of Absolute Protections

Without an solid promise of full reimbursement from the American government, experts believe international firms to act with great care.

“It would be premature to speculate on any upcoming plans,” an official commented recently.

The optimistic schedule of less than a year and a half was publicly outlined. Nevertheless, industry projections suggest a more cautious outlook.

A Probable Schedule

“It is likely going to take three years for any significant output increase,” said an industry expert.

Experts believe operators would likely spend:

• Year one: Securing new government and security contracts.
• Following phase: Investing in overhaul of facilities.
• Year three: Starting to meaningfully increase production.

This suggests an increase of around half a million barrels per day possibly by the end of the decade.

Interest vs. Willingness for Risk

Analysts draw a key distinction between firms' attention and their appetite to invest substantially.

“I think their curiosity is an eight, on a range of one to 10. I think their appetite is a four or five, because there is no clarity yet.”

Veteran diplomats in the sector reinforce this sentiment. They believe that firms will politically talk up the opportunity while privately proceeding with deliberate slowness.

The Enormous Cost

The financial investment would be vast. Research projections suggest that increasing production by between 500,000 and a million bpd would require in excess of $10 billion in capital spending over two to three years.

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

The Outstanding Issue of Government Backing

The suggestion of oil giants being paid back by the federal government has been repeatedly floated. But, formal assurances on such a mechanism have not yet been announced.

Without certainty is the primary impediment for the sector's caution. Operators seek guarantees against nationalization and the risk that a future president could renege on any promise.

“They must be insured against sovereign risk, that we’ve experienced in Venezuela already.”

Ultimately, while political promises runs high, the financial realities suggest a journey of slow deliberation for any major venture in the country's energy industry.