RIYADH: The battle for crude market share is beginning to heat up.

Desperate to get back into the global markets, Iran is reportedly planning to offer international companies more lucrative contracts to attract at least $100 billion worth of investment in its oilfields over the next three years, the Financial Times said last week.

In order to attract buyers back, Tehran is sending strong signals to oil markets about its pricing policies should it make headway in the nuclear talks with the West.

Tehran might have to set or accept lower prices to go back to the market, Mohsen Qamsari, director of international affairs at the National Iranian Oil Co, conceded recently. “Naturally, a resupply of Iran’s crude oil on the world markets will result in oil price cuts,” he told Shana, an Iranian newswire exclusively covering the energy sector.

Oil minister Bijan Zanganeh has in the meantime, also set up a special committee to review and improve its buy-back investment model so as to attract investments by oil majors. He has put his advisor Hosseini, a negotiator trusted by Western oil firms, in charge.

Hosseini told the Financial Times that the Islamic republic would scrap its current system of “buyback” contracts, which do not allow foreign companies to book reserves or take equity stakes in Iranian projects.

A new “win-win” type of contract, to be announced in London next March, was in the works and leading companies could benefit, “whether American or European,” Hosseini added. “We hope that with these preparations the language of our contracts will be very, very close to international norms and that we will see them (international companies) queuing up once again,” Mr Hosseini said.

On their part, oil companies’ top brass have also been urging Washington to lift the unilateral sanctions. Conoco, Chevron, Exxon Mobil and Anadarko have all shown varying degrees of interest in the Islamic Republic ever since Tehran nationalised its energy sector in 1979.

And now with a possible thaw in relations between Washington and Tehran, oil majors appear lining up to woo Iran, if and indeed when, sanctions finally end. “Once sanctions are removed, we’d definitely be interested in investing, but the contract terms have got to be attractive,” a senior US energy executive was quoted as saying. Executives from US and European companies were reportedly seeking opportunities to meet with Iranian oil officials on neutral ground. “There is no embargo on talks,” a senior European oil executive told Reuters.

Indeed everyone agrees that getting the sanctions eased is a time consuming process. It will take time to work out any relaxation of sanctions on Iranian oil exports and banking access, the Obama administration is cautioning.

“Most expect that turning the clock back on sanctions will be a drawn-out process based on tangible diplomatic progress with regard to the issues at hand, which many still view as a remote prospect,” the International Energy Agency too said.

And Tehran understands it well. “I agree that sanctions may not be lifted formally, quickly, simultaneously and immediately,” Hosseini said. But he asserted there were ways companies and governments could circumvent them, such as being granted waivers.

He hence underscored that even if sanctions remain in force, the country should still be able to implement a new contract system that would attract investors.

And the ball though has started to roll. As per media reports, international oil companies that once had a presence in Iran are negotiating with the new government to return, and several European companies have sent delegations to explore oil opportunities.

“A large number of traditional buyers of Iranian crude oil are making preparations for raising their crude oil purchases from Iran,” Qamsari said last week.

Quality of the Iranian crude could also play an important role in the re-assimilation of Iranian crude into the world markets. Iranian oil competes with Russian and Iraqi grades of the same heavy, sour quality, which has become prized since the US shale oil boom increased global supply of previously scarce light oil.

A battle for market share seems just round the corner!