It's possible to get back to previous production levels, but it will take a very long time and a lot of money. Venezuela was producing 3.7 million barrels a day with plans for 5.2 million. Reserves aren't the issue; the issue is putting capital into development in competition with cheaper reserves globally.

They want to be there and have had a more significant presence in the past. The U.S. Gulf Coast refining structure was built for heavy sour crudes from Venezuela and Mexico. They would be inexpensive crudes that refiners have the machinery to process profitably.

We haven't heard what will incentivize companies to come back. There's a lot of risk regarding the future of the Venezuelan government and who will guarantee the $100 billion investment. It will take a long time. A shorter-term increase of a couple hundred thousand barrels a day doesn't matter for global balances. The longer-term plan won't be implemented until after President Trump's four-year horizon.

There would be a potential cost. The objective is to get back to 3.5-3.7 million barrels a day, a significant increase. This would more than likely be at the expense of other developments in the oil sector around the world, including by the same companies (ConocoPhillips, Chevron, Exxon). Smaller companies like Continental Resources are unlikely to go in due to lack of experience with heavy oil and refining capacity. The cost of developing Venezuelan oil is among the highest in the world, so companies will compare it to other investment opportunities.

Some infrastructure can be rehabilitated in a relatively short time, but getting back to 3-3.5 million barrels a day will require replacing a lot of it, which brings complications like getting service companies and rebuilding pipelines.

They can't give any assurance about what Russia or Saudi Arabia will do. The U.S. has provided some guarantees, but if prices fall below $50/barrel, U.S. production will suffer and it's unclear if other oil-producing countries will support it long-term.

China has talked about what is owed to them by Venezuela. They have an agreement for debt repayment, taking 60-70,000 barrels a day, which could increase if oil prices fall. China has also been buying up to 400,000 barrels a day at times to build strategic stockpiles. China has been the buyer of last resort, a role that could shift to the U.S. They have the infrastructure to increase stockpiles to 1.1-1.2 million barrels a day, which could help rebalance the market.