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Industry experts have voiced considerable skepticism regarding recent statements that US energy majors will swiftly invest tens of billions of dollars to fix the country's crumbling energy sector.

Requirement of Iron-Clad Protections

Lacking an “iron-clad guarantee” of full reimbursement from the Washington, specialists predict multinational oil companies to proceed with extreme caution.

“It seems too early to comment on any potential investments,” an official stated this weekend.

The ambitious schedule of less than 18 months was boldly proposed. However, realistic assessments suggest a different picture.

A More Realistic Outlook

“It’s probably going to take 36 months for any meaningful production bounce,” commented one energy analyst.

Experts believe operators would likely spend:

• Initial phase: Securing new operating agreements.
• Year two: Commencing overhaul of infrastructure.
• Year three: Being able to meaningfully increase output.

The result could be an rise of around half a million barrels per day maybe by 2029.

Interest vs. Readiness for Investment

Experts make a critical difference between firms' attention and their appetite to invest substantially.

“I think their interest is an eight, on a scale of ten. But their readiness is a mid-range score, because there is a lack of certainty yet.”

Experienced diplomats in the country echo this view. The expectation is that majors will politically call it fantastic while actually moving with deliberate slowness.

The Colossal Investment Required

The monetary outlay would be enormous. Independent projections suggest that adding between 500,000 and a million bpd would require over $10 billion in capital spending over two to three years.

However, returning production 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 Question of Government Backing

The idea of firms being compensated by the government has been repeatedly raised. However, specific plans on any guarantee have so far not been announced.

The absence of a solid plan is the primary factor behind the sector's caution. Firms seek safeguards against political risk and the risk that a future president could cancel any deal.

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

Therefore, while rhetorical confidence runs high, the financial realities suggest a road of extreme caution for potential significant venture in the country's energy industry.