Donald Trump has predicted that US oil companies will invest tens of billions of dollars to rebuild Venezuela's oil infrastructure and ramp up production within 18 months, but industry experts have expressed deep scepticism over the timeline and the lack of government guarantees.
Analysts say energy giants will proceed with extreme caution without an “iron-clad guarantee” from the US federal government that they will be fully reimbursed for any investments. Past nationalisations and sovereign risk in Venezuela make companies wary, said Dan Pickering of Pickering Energy Partners: they want to “avoid getting screwed”.
Mr Pickering estimates it will take three years for any meaningful production bounce, with output increasing by around half a million barrels per day by 2029 at the earliest. The first year would be spent on contracts, the second on reconstruction, and only the third on increasing output.
Firms such as ExxonMobil, Chevron and ConocoPhillips have declined to outline specific investment plans. Elliott Abrams, former US special envoy to Venezuela, noted that companies may talk up opportunities but that “doesn’t mean they’re going to invest”.
The cost of reviving Venezuela's oil sector is vast: Columbia University's Center on Global Energy Policy estimates that adding 500,000 to one million barrels per day would require over $10 billion in investment, while restoring output to early 2010s levels of 2.5 million bpd could cost $80–90 billion. The Trump administration has yet to detail how taxpayers might back such investments.
