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Industry experts have voiced deep caution regarding bullish claims that US large firms will swiftly invest tens of billions of dollars to rebuild the country's broken production facilities.

Requirement of Iron-Clad Guarantees

Lacking an “iron-clad guarantee” of full reimbursement from the US federal government, experts believe international firms to move with extreme caution.

“It is hasty to speculate on any future business activities,” a representative stated this weekend.

The optimistic schedule of under a year and a half has been boldly proposed. Nevertheless, realistic assessments suggest a different picture.

A Probable Outlook

“It is likely going to take 36 months for any kind of output increase,” said an industry expert.

Experts believe operators would likely spend:

• Year one: Navigating new government and security contracts.
• Following phase: Investing in rebuilding of equipment.
• The third year: Being able to significantly ramp up production.

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

Interest vs. Willingness for Investment

There is a key distinction between firms' attention and their readiness to commit significantly.

“I believe their curiosity is an high score, on a scale of one to 10. But their willingness is a four or five, because there is a lack of certainty yet.”

Experienced observers in the region share this sentiment. The expectation is that firms will publicly express enthusiasm while in practice proceeding with great care.

The Colossal Investment Required

The required outlay would be colossal. Research projections suggest that increasing production by between half a million and a million barrels per day would require more than $10 billion in funding over several years.

However, returning production to previous levels of around 2.5 million barrels per day could require a staggering $80 billion to $90 billion over many more years.

The Unanswered Question of Government Backing

The suggestion of firms being reimbursed by the federal government has been repeatedly floated. But, specific plans on such a mechanism have not yet been forthcoming.

Without clarity is the key reason for the industry's hesitation. Firms seek guarantees against sovereign risk and the chance that a subsequent administration could refuse any agreement.

“They must be shielded from political change, that we’ve witnessed in Venezuela already.”

Therefore, while political confidence runs strong, the operational risks suggest a road of slow deliberation for any major investment in the country's energy industry.