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Industry experts have expressed considerable caution regarding bullish statements that American large firms will quickly pump tens of billions of dollars to rebuild the country's crumbling oil infrastructure.

Demand for Absolute Guarantees

Absent an “iron-clad guarantee” of financial backing from the US federal government, experts believe global energy giants to proceed with extreme caution.

“It seems too early to speculate on any potential investments,” an official commented in response.

The aggressive schedule of under 18 months has been publicly outlined. Yet, realistic assessments indicate a longer timeline.

A Probable Schedule

“It’s probably going to take multiple years for any significant production bounce,” said one energy analyst.

He suggested operators would likely spend:

• Initial phase: Navigating new government and security contracts.
• The second year: Beginning overhaul of infrastructure.
• The third year: Reaching a position to meaningfully increase production.

This would lead to an boost of around half a million bpd possibly by the end of the decade.

Appetite Compared to Appetite for Spending

Experts make a critical difference between multinationals’ interest and their willingness to spend substantially.

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

Veteran diplomats in the region share this view. The thinking is that companies will politically express enthusiasm while in practice acting with extreme caution.

The Enormous Price Tag

The required bill would be enormous. University estimates suggest that adding between half a million and a million barrels per day would require in excess of $10 billion in funding over several years.

But, returning output to previous levels of around 2.5 million bpd could require a massive $80 billion to $90 billion over many more years.

The Unanswered Question of Federal Guarantees

The prospect of oil giants being compensated by the US taxpayer has been often floated. However, specific plans on any guarantee have so far not been provided.

This lack of a solid plan is the key reason behind the sector's reluctance. Operators seek guarantees against sovereign risk and the chance that a future administration could renege on any deal.

“It is essential to be insured against sovereign risk, that we’ve experienced in Venezuela previously.”

Therefore, while political optimism runs strong, the operational realities suggest a journey of measured steps for potential large-scale venture in the country's oil sector.