ExxonMobil Caught Between Erbil and Baghdad

 

February 9, 2013

BEIRUT, Lebanon — On January 21, the Iraqi prime minister, Nuri al-Maliki met in Baghdad with Rex Tillerson, ExxonMobil's chairman, president and C.E.O., for the first time since October 2011, when U.S. ExxonMobil and the semi-autonomous Iraqi Kurdistan signed an oil deal aimed at developing six Kurdish exploration blocks. During this meeting, one more time, Prime Minister al-Maliki  ruled out the possibility of implementing in Iraq production sharing agreements (P.S.A.s) similar to those currently signed by the Kurdistan Regional Government (K.R.G.). It seems that in occasion of the meeting the prime minister proposed to ExxonMobil some improved (still unknown) contractual terms in order to permit the U.S. company to continue its operations in southern Iraq.

In practice, Baghdad still wants to continue signing  technical service agreements (T.S.A.) with all the energy companies working in Iraq. The central government defines oil reserves as goods belonging to all Iraqi people — as it is written in the country's constitution. Mr. al-Maliki affirmed that all Iraqi people were partners in relation to the oil discovered in any parts of Iraq and that Iraqis could not, for instance, be partners in Basra but not in other areas of the country. According to some industry sources, the offered incentives have only one precondition: forfeiting the contract signed by ExxonMobil with the K.R.G. Two days after this meeting, in Switzerland, Mr. Tillerson met with the president of the K.R.G., Massoud Barzani to discuss about ExxonMobil's activities in Iraqi Kurdistan.

After the meeting in Baghdad, it seemed the U.S. energy company would take important decisions concerning its operations in southern Iraq. In fact, three years ago, in January 2010, ExxonMobil and Anglo-Dutch Shell signed a deal related to the development of the giant oil field West Qurna-1, which is located in southern Iraq. When in October 2011 the U.S. company struck a deal with the K.R.G. in order to develop the six Kurdish exploration blocks, ExxonMobil bypassed the central government, which is the only authority capable of approving energy deals with reference to all Iraq, the K.R.G. included. To make things worse, at least two of the six exploration blocks (the Qush and Bashiqa blocks) are within the territories disputed between Erbil and Baghdad. In specific, the two blocks are technically part of the Nineveh Governorate, but since 2003 this territory has been administered by the Kurds, who occupied these lands at the beginning of the war against the regime of Former President Saddam Hussein.

Immediately after the signature of the deal, started ExxonMobil's quarrel with Baghdad, with the latter threatening the cancellation of the U.S. company's 20-year T.S.A. related to the development of the giant West Qurna-1 oilfield. Later, last year, ExxonMobil announced that it wanted to sell its $50 billion stake in West Qurna-1, tilting its energy interests toward the K.R.G. The quarrel between ExxonMobil and Baghdad is only one of several possible disputes that have arisen as a consequence of other energy contracts between Erbil and other international oil companies (I.O.C.s). All these contracts have been signed by the K.R.G. without Baghdad's green light. But, with no doubt, the quarrel between ExxonMobil and the central government is the most important because ExxonMobil is the largest of the world's six oil supermajors and is easily a trendsetter with reference to energy diplomacy.

A week after the al-Maliki-Tillerson meeting in Baghdad, the Iraqi oil minister, Abdelkarim al-Luaybi restated one more time that ExxonMobil had to choose between working in southern Iraq or in the K.R.G. He went on expressly saying that there was no formal time-limit, but that now ExxonMobil had to take a final decision about how it intended to operate in the whole Iraqi territory, the K.R.G. included. "Of course, it cannot go on with the two contracts. Thus, it must choose either to cooperate in southern Iraq or in Kurdistan" said the minister.

And Baghdad is now quite positive about a possible ExxonMobil's about-face against the K.R.G. This about-face should be based on economic and political considerations as well. Economically speaking, the West Qurna-1 oilfield alone well exceeds the current the K.R.G. oil production. Consequently, Erbil is quite reasonably worried about the future developments in relation to the large oil fields in southern Iraq. Indeed, ExxonMobil's full support during almost all 2012 was an important game changer for Erbil. In practice, every oil company — the first one was ExxonMobil but later followed suit also Russia's Gazprom Neft, U.S. Chevron Corp. and France's Total — that decided to sign a deal with the K.R.G. (with better contractual terms and a safer environment than Baghdad's) was an additional step for Erbil toward at least an economic independence from Baghdad.

Were now ExxonMobil en route to Baghdad, it would be indeed a relevant setback for Erbil, which for more than a year used the American company in order to become a petro-player. A big problem, especially if the American company could get from Baghdad improved terms, which could then be a catalyst also for other companies which for the moment have forgone investing in proper Iraq. Politically speaking, the U.S. is discouraging Erbil from developing its own energy policy because the U.S. fears that this could be the first step toward the fragmentation of Iraq. In essence, Washington, desiring to avoid Iraq's fragmentation, is at least in political terms well in line with Baghdad. Some analysts point out that since its deal with Erbil, ExxonMobil would have negotiated with the K.R.G. in order just to force Baghdad to improve its contractual terms for the energy resources located in proper Iraq. In other words, the idea was to use Erbil for defying Baghdad to implement contractual improvements in the south. Time now is running out and probably ExxonMobil cannot continue to keep a foot in both camps. Recently, the U.S. company hired as a consultant Mr. James Jeffrey, a former U.S. ambassador to Iraq. Given Jeffrey's past experience, he could be closer to Baghdad than to Erbil. But it's too early to get to this conclusion.

To complicate an issue already well intricate, in mid-January British Petroleum (BP) signed a preliminary deal with Baghdad aimed at developing the Kirkuk field, which is located west of one of the blocks pertaining to ExxonMobil within the contested area. Kirkuk is an ethnically mixed city and it lies exactly at the center of the disputed area between Baghdad and Erbil. And of course, the latter is claiming oil rights with reference to the area assigned to BP. The British company up to now has developed its operations only in southern Iraq. A good reason for this behavior, without risking illegal (according to Baghdad) deals in the K.R.G., is linked to the fact that BP is the operator of the giant Rumaila oil field (17 billion barrels, i.e., around 12 percent of Iraq's oil reserves. This field, located in southern Iraq, approximately 20 miles from the Kuwaiti border, as of October 2012, produced around 1,330,000 barrels per day. BP's bond with Rumaila dates back to several decades ago and in specific it was the British company that discovered it in 1953. Rumaila is owned by the Iraqi government and it's subcontracted to BP and China National Petroleum Corporation (C.N.P.C.) under an Iraqi technical service contract. The field is operated by BP (38 percent), C.N.P.C. (37 percent) and Iraq's State Organization for Marketing of Oil (SOMO, 25 percent). Also ExxonMobil was interested into this field, but it was not successful during the bidding process.

It's obvious that a solution should be found very soon. It's not possible to have I.O.C.s supporting either the K.R.G. or proper Iraq in their Iraqi energy operations. This a condition — although it's not as dangerous as last December's deployment of the K.R.G.'s and Iraq's armies along the contested border — still adds insecurity. And in an area where politics is based on crude oil and crude oil is based on politics, I.O.C.s' commercial ventures have relevant geopolitical consequences especially when dealing with a country like Iraq, which has proven reserves of 143.1 billion barrels of crude oil and 3.2 trillion cubic meters of gas. A new legislation — if accepted by all the involved parties — could well define Iraq's energy sector, in this way partially de-escalating the current political crisis. But the problem is that this legislation has been caught up in political struggles between Sunnis, Shiites and Kurds.

The point that needs to be understood by the government of Iraq is that also losing the ExxonMobil's deal would not stop — although it would be a relevant setback for Erbil — the K.R.G. from getting more autonomy from Baghdad. The Kurdish region is now on a drive toward developing an energy sector in a much more autonomous way than just two years ago. In fact, other companies are interested in getting Kurdish acreage. This means that for a company that leaves the K.R.G. surely there will be some other valid replacements. This current situation surely presents Erbil a completely new political leverage, but at the same time risks bringing Iraq towards its political fragmentation.

 

Is Iraq on the Brink of Another Civil War?

December 20, 2012

 

BEIRUT, Lebanon — At the beginning of 2013 ExxonMobil will be getting ready in order to conduct some surveying activity in the Iraqi area that is disputed between Erbil and Baghdad. This move may easily be the straw that breaks the camel's back, i.e., the event that may drag Iraq down again into the scary coils of another civil war.

Right now along the contested border are stationed on one side, the Peshmerga forces, i.e., the Kurdish armed forces, and on the other side, the Iraqi Army. Notwithstanding the fact that currently both sides are scaling back — although with no defined timetable — from this dreadful standoff, there is always the risk of the occurrence of a simple provocation, which could precipitate inadvertently the situation. Following the orders of  Prime Minister Nouri al-Maliki of Iraq and President Massoud Barzani of the Kurdistan Regional Government (K.R.G.), the troops are stationed along the border and, according to some estimates, they are as many as 60,000 soldiers. In some locations they are as close to each other as 100 meters. This proximity is risky and for the stability of the whole Middle East, which is already plagued by the Syrian events, any additional Arab-Kurdish skirmishes have been avoided.

In October 2011, ExxonMobil signed oil deals directly with Iraqi Kurdistan for six exploration blocks. ExxonMobil bypassed the central government, which is the only authority capable of approving energy deals with reference to all Iraq, the K.R.G. included. To make things worse, at least two of the six exploration blocks (the Qush and Bashiqa blocks) are located within the disputed territory that is technically part of the Nineveh governorate, but that since 2003 has been administered by Kurdish people, who occupied these lands at the beginning of the war against Former President Saddam Hussein of Iraq.

Immediately after the signature of the deals started ExxonMobil's quarrel with Baghdad, which threatened the cancellation of the American company's 20-year technical service agreement (T.S.A.) related to the development of the giant West Qurna-1 oilfield located in the Basra province in southern Iraq. Complicating the already strained relations between Erbil and Baghdad, ExxonMobil is willing not only to stop its operations in Iraqi Kurdistan, but also to plan exiting its $50 billion stake in West Qurna-1. The U.S. company has taken this decision after a careful assessment, which has shown that Erbil's contracts are much more interesting and valuable for the company's balance sheets. And similarly, other international oil companies like U.S. Chevron, Russia's Gazprom and France's Total are all giving their preference to the K.R.G. energy deals than Iraq's.

Since last November, tensions have been increasing after some clashes between forces belonging to Erbil and forces belonging to Baghdad. The initial episode (on November 16) was linked to an unpaid gasoline check (oil for a strange twist of fate is always at the core of many issues in the Middle East) in the small town of Tuz Khurmatu located in the disputed areas. It's noteworthy  to underline the futility of the episode from which severe consequences followed. In fact, in this small town a serious conflict exploded when some federal forces tried to arrest a Kurdish gasoline seller who asked protection to some Peshmerga soldiers. The futility of this event well testifies that tensions between the two parties had been simmering for months before this episode. The last of these clashes happened on Tuesday, December 18 ,when troops from Iraqi Kurdistan fired shots against an Iraqi Army helicopter north of the ethnically mixed city of Kirkuk. And it's worth remembering that in the previous two days (Sunday and Monday) at least 30 people had been killed during these clashes. The disputed areas are a strip of ethnically mixed land that separates Iraq from the Kurdish-administered territory in the north. Disputed areas include the city of Kirkuk, which has more than 10 billion barrels of proven oil reserves. 

 

 

Iraqi officials clearly stated that if ExxonMobil began its operations in the disputed area, the Iraqi Army would start hostilities because it would judge these oil operations alike to a declaration of war. "The prime minister has been clear: if Exxon lays a finger on this territory, they will face the Iraqi Army" told the Washington Post Sami al-Askari, an Iraqi M.P., who is also close to Prime Minister Nouri al-Maliki. Similarly, Deputy Prime Minister Hussain al-Shahristani of Iraq reaffirmed one more time that if ExxonMobil decided to operate in the disputed territories it would be doing a serious mistake.

The situation might with no doubt scale back. ExxonMobil won't drill until next summer, although in early 2013 it will initiate some surveying operations. The Iraqi government in the last months has tried to convince the American government to discourage ExxonMobil from starting operations in 2013 in the K.R.G. (The company's past operations show that ExxonMobil always adheres to the letter of its contracts and that the company well respects the agreed schedule). In reality, without being too much involved into ExxonMobil's deals, American officials have partially tried a difficult mediation between Erbil and Baghdad.

Last week, President Jalal Talabani of Iraq, a Kurd, with American help was able to negotiate an agreement between Mr. Maliki and Mr. Barzani. The basic idea was first of all to lower the tone of their public speeches and then to form a committee with the goal of making safe the disputed areas. Up to now, neither site has demobilized its forces; and President Talibani is currently recovering in Germany from a stroke he suffered two days ago. This is indeed a very bad news for the appeasement process.

The real issue is that both Mr. Maliki and Mr. Barzani have some reasons not to retrench. For Mr. Barzani the existence of a common threat is useful in order to compact and unify the fractious parties within Iraqi Kurdistan, while for Mr. Maliki it's of paramount importance that all the K.R.G. energy riches are controlled by Baghdad. Erbil's budget is still very dependent upon federal funding. A good power lever for Baghdad could be to cut the 2013 federal funding envisaged for the K.R.G. And it this regard, Maliki-aligned politicians are building up a Parliament coalition oriented toward this end.

In Baghdad there is the idea that Erbil has more to lose from a civil war than Baghdad. This assumption is based on the fact that Big Oil companies are swarming into the K.R.G. because of its excellent security and improved business environment. Instead, for Baghdad a civil war won't change consistently its difficult relations with oil companies because those companies investing in the Basra region already have to compute costs linked to political instability. This assumption concerning who lose more between the two contenders is very debatable to say the least. Stability is useful for both Iraqi Kurdistan and Iraq. Energy companies operating in Iraq have already difficult challenges to overcome: daring contract terms; risk of violence; lack of infrastructure (for instance: pipelines; oil pumping; and storage facilities); and red tape. Honestly, hypothetically while waging a civil war in the north it's not very clear how Baghdad could improve the attractiveness of its energy sector in the south.

For sure Baghdad needs to change its energy policy given the recent failures it has experienced. Negotiations between Ankara and Erbil are moving ahead and there is the will to sign a massive oil deal following which a Turkish government-backed new company could be drilling for oil and gas in Iraqi Kurdistan, while at the same time it could be constructing a pipeline to transport energy riches from Kurdistan to Turkey — without utilizing any Iraqi infrastructure. If implemented this plan means no other thing that a real economic independence of Erbil from Baghdad's federal funds. And today the main linkage between the K.R.G. and proper Iraq is based on just economic transfers from Baghdad to Erbil. And as usual: Forewarned is forearmed.

     

 

Does Lukoil Enter the Fray for Kurdistan's Oil?

November 29, 2012

 

BEIRUT, Lebanon — Lukoil, Russia's second largest oil company and its second largest producer of oil, has recently bought condensate (very light oil) from Iraqi Kurdistan, notwithstanding Baghdad's position centered around the pivot point that only the central government has the right to negotiate oil deals in all Iraq. For the time being, the Russian company has not been the target of any economic reprisals by Baghdad and it maintains intact its desire of developing Iraq's southern oil fields.

Currently, Lukoil's Geneva-based trading arm, Litasco is the third company that has bought Kurdish condensate. The company has followed the two Dutch companies Trafigura and Vitol, which started their operations in October 2012. According to a spokesman with the Kurdistan Regional Government (K.R.G.) talking with reference to Trafigura's and Vitol's deals, the Kurdish condensate is swapped for refined products with a private Turkish company, with no cash transactions between the involved parties. Given the fact that there are no pipelines between Iraqi Kurdistan and Turkey, Kurdish oil is trucked from Iraqi Kurdistan to Turkey where it is loaded onto cargoes.

Up to now, it's not clear what will be Baghdad's reply to Lukoil's deal, especially bearing in mind that Lukoil was considered by the Iraqi government the most plausible purchaser of ExxonMobil's stake in West Qurna-1 oil field, which is located north of the Rumaila oil field, west of Basra (southern Iraq). ExxonMobil is now in talks for selling its stake in West Qurna-1 because of its energy deals with the Kurdish authorities. Deals that Exxon signed without having previously gotten the authorization from the central government. In fact, Baghdad considered ExxonMobil's Kurdish deals illegal and dismissed the American company's contract for West Qurna-1. Other companies that are facing the ire of Baghdad following their relations with the K.R.G. are U.S. Chevron, Russia's Gazprom and France's Total.

Also Trafigura's and Vitol's deals motivated harsh responses from Baghdad, but according to some Iraqi sources it seems now that this time with Lukoil Baghdad will be obliged to maintain a different stance. In any case, the involvement of both Trafigura and Vitol already means that Baghdad would have serious difficulties retaliating because it depends on these two firms for quite a substantial proportion of its refined oil imports (gasoline and diesel). Not buying from these two companies would immediately imply that Baghdad has to pay much higher prices for similar products on the market. Iraq has an insufficient oil refining capacity and suffers shortages of electricity. For this reason, gasoil is used to generate power. Following the war, internal riots and scarce investments, the country is now forced to import fuel for its energy requirements, and it's nowadays one of the biggest buyers of oil products in the Middle East.

"After checking with concerned parties, we got confirmation that LUKOIL has not purchased any kind of crude for the benefit of the K.R.G." said an official from Iraq's state oil marketer State Oil Marketing Organization (SOMO). Until now, the Iraqi government has not released any comment. Another hint that Iraq's position with reference to these oil deals could be softened is linked to the fact that last week it was announced that SOMO had finalized a term deal with British Petroleum (BP) and Vitol (the latter company is a regular supplier of gasoil to Iraq). The deal was related to the purchase of up to 1.097 million tons of gasoil for deliver in 2013. The two companies are likely to ship the gas either from Bahrain or from Kuwait, two countries where they have term contracts.

Industry sources told Reuters that Litasco had chartered the tanker "Cielo di Napoli" to load about 19,000 tons of Kurdish condensate from the port of Toros at Ceyhan in Turkey. The tanker "Cielo di Napoli" sailed on November 21. Lukoil's trading company won its contract outbidding competing bids from Trafigura and Azerbaijan's Socar and bought the condensate in a public tender (with a $3.00 discount to naphtha prices) thanks the intermediary role played by Powertrans.

The condensate trade with Turkey started last July following an agreement with Ankara. The basic idea was to augment the quantity of refined products (kerosene and diesel) for Erbil. Notwithstanding Ankara's blessing, these truck deliveries were immediately considered illegal by Baghdad. According to Kurdish sources, Kurdistan's export volumes were 12,000 barrels per day in October 2012, but deliveries seem now to have increased and to continue to increase. Obviously, it's a tiny fraction of Kurdish oil in comparison to Kurdish oil exports to Iraq, which following last September's agreement between Baghdad and Erbil were set at 200,000 barrels per day during the last quarter of the year. Iraqi Kurdistan obtained an agreement with Baghdad and was  entitled to receive 17 percent of refined products in Iraq. Trade with Turkey should come under that specific quota.

Summing up, there is no doubt that Vitol's and Trafigura's role is very important with reference to Iraq's fuel imports. But Lukoil's role in Iraq has — and according to Baghdad should have in the future — a much more relevant responsibility for the development of the country's oil sector. In fact, Baghdad, following the quarrel with ExxonMobil, which had invested into Iraqi Kurdistan, started promoting the takeover of West Qurna-1 by Chinese and Russian energy companies. The American company seems rather to be more interested into the contractual terms offered by the K.R.G. and into pulling out of Iraq's $50-billion West Qurna-1 project. Lukoil's move into Iraqi Kurdistan — the Russian company is already one of the largest investors in Iraq — could be a real attempt at winning contracts in the semiautonomous region of Iraqi Kurdistan (three governorates out of eighteen for the whole Iraq) without Baghdad's preventive authorization, but especially without losing contracts in the other energy-rich areas of the country.

Energy analysts point out that up to now the difference between Erbil's oil contracts and Baghdad's was very noteworthy for a company's balance sheet and that it was difficult to resist Erbil's calling. And being Lukoil Baghdad's preferred candidate for substituting ExxonMobil in southern Iraq, the company could be successful in signing up to contracts with Erbil's government without real possibilities of economic reprisals with reference to its southern contracts.

In fact, in December 2009, Lukoil together with Norway's Statoil was awarded the rights to develop the West Qurna-2 giant oil field. Lukoil is planning to invest about $25 billion during a timeframe of twenty years. This field according to current estimates should be able to produce 500,000 barrels per day in 2014, and then, in the following years, should raise its production up to 1.8 billion barrels per day. No doubt that it would be difficult for Lukoil to work to another big project like West Qurna-1 replacing ExxonMobil while it is also developing West Qurna-2. In this regard, despite a certain interest toward West Qurna-1, the Russian company last week declared that it would decide about its possible involvement in West Qurna-1 by the end of the year. In brief, the company is taking time. Together West Qurna-1 and West Qurna-2 could be producing around 6 percent to 7 percent of world's oil production.

Having closed the doors of southern Iraq to ExxonMobil and the other Big Oil companies involved in Kurdistan could really jeopardize Baghdad's production targets unless valid and reliable substitutes are found quite soon. The exploration auction held in May 2012, which had very few takers in the licensing round, is a clear reminder that current the technical service contracts (T.S.A.s) offered by Iraq are not so appealing for Big Oil companies, which prefer Kurdistan's production sharing agreements (P.S.A.s). The latter contracts offer to an oil company a defined share of the production, which may be added to the company's balance sheets. Thanks to this, a company's valuation increases and the company may obtain more easily bank loans. The offered share stays the same, either if project costs and/or oil prices move upwards or downwards. Instead, Baghdad's T.S.A.s are not very attractive and companies have to undertake the exploration projects while it is much more difficult to raise debt to finance their operations. In this case, only large companies are able to undertake these projects, but, given the fact that it's possible to find better alternatives on the market, it goes by itself that Iraq's T.S.A.s are not easily subscribed right now. Moreover, the business environment and bureaucracy are less chaotic in Iraqi Kurdistan than in Iraq. In the end, Big Oil's moves in Iraqi Kurdistan are much more understandable and rational than it could appear at first sight.




 

Rising Tension in Lebanon After Friday's Car Bombing

 

October 21, 2012

BEIRUT, Lebanon — Tension has been rising sharply in Lebanon after Friday afternoon's car bombing (October 19), which exploded close to Sassine Square in Beirut's Ashrafieh, a Christian central neighborhood. The bomb detonated in a narrow street that is in the proximity of the headquarters of Saad Hariri's 14 March Alliance. The explosion was well heard around the city — from adjacent areas like Gemmayze and Mar  Mikhael to the far hilly neighborhood of Baabda. The blast took the life of eight people, wounded scores and completely ripped off at least two buildings.

The target of the bomb was the head of the Lebanese intelligence branch of the Internal Security Forces (I.S.F.), Brig. Gen. Wissam al-Hassan, a Sunni Muslim who was profoundly anti-Syrian and who was very close politically to Saad Hariri. Mr. al-Hassan was probably going to be the I.S.F. next head. A couple of months ago he had been behind the investigation that was later the basis for prosecuting the former Lebanese information minister, Michael Samaha and two Syrians for complotting in order to foment religious hatred in Lebanon.

 

Previously, Mr. al-Hassam directed an investigation into the deaths of the Prime Minister, Rafic Hariri and 21 other people in February 2005. His analysis pointed out strongly toward Syria and Hezbollah's direct implication into the murderous attack. At this regard, it should be noted that the Syrians at the time of the blast still had a military presence in Lebanon. Until last Friday, Mr. al-Hassam had been able to escape several assassination attempts. "He used to move around according to exceptional safety measures and he had his family installed in Paris because he felt himself as a target" added Samir Geagea, a prominent Lebanese politician, senior member with the March 14 Alliance.

Immediately after the blast, many anti-Syrian a politician, like Saad Hariri and Druze leader Walid Jumblatt, started accusing President Bashar al-Assad of Syria to be behind the explosion. And Mr. Hariri's coalition also requested the government, which is run by Prime Minister Najib Mikati, to resign because of its inability to maintain internal security in the country. In fact, Lebanese politicians (especially those belonging to the opposition) are scared by the possible direct involvement of Lebanon into the current Syrian turmoil. It's worth remembering that the Syrian Army withdrew from Lebanon only in 2005, after a 29-year occupation. On Saturday, Mr. Mikati offered to resign so as to create a government of national unity, but President Michel Suleiman requested him to stay in power and to find a way out from this political crisis.

Late Friday, some protests started in Beirut and Tripoli, especially in Sunni-inhabited areas. Currently, people are burning tires and are blocking several roads. On Sunday morning, a fifteen-year-old boy was killed by a random gunfire while confrontations between supporters and opponents of Syria's president occurred in Tripoli. While thousands of Lebanese attended peacefully (but, unequivocally chanting against the government and Syria) the funeral of Mr. al-Hassam in Beirut's Martyrs' Square in the early afternoon of Sunday, then later some people started storming with stones and metallic rods the government offices located nearby. The police retaliated with warning shots and tearing gas.

With reference to the current turmoil in Syria, the Muslim community in Lebanon is almost perfectly split between Shias, who support President Bashar al-Assad of Syria, and Sunnis, who support Syrian rebels (Druze people are much less numerous). Before Friday afternoon's car bombing, tension had already risen in Lebanon for almost a week, following last Sunday's (October 13) Martyrs' Square's sit-in. On that occasion, the powerful Salafist Sheikh al-Assir from Saida (Sidon) — he gained a lot of popularity some months ago after that he and his followers had blocked the road between Sidon and Beirut — held a Sunni sit-in in Martyrs' Square, which is the same square where today was celebrated the funeral. While on stage, he hurled all his anger toward Syria's president and Hezbollah. The Sunni rally ended peacefully, but later Sheikh al-Assir's convoy was pelted with stones in central Beirut on its way back to Saida.

The situation looks quite unstable right now and there is now fear that the country may fall back to a cycle of sectarian violence and reprisals, which it has undergone in the past four decades. The only real hope is that Friday's car bombing was only an isolated sort of reprisal against a man who was deeply anti-Syrian and who, as said above, had already escaped some assassination attempts. Instead, were this car bombing the first piece in a series of terrorist attacks, the situation could really push Lebanon into another civil war.

At the beginning of al-Hassan's funeral, politicians, the military and security officials attended at the I.S.F. headquarters a ceremony held with full military honors. There, President Suleiman said that the government and Lebanese people must work "shoulder to shoulder" to overcome these sad events. And then he added: "I tell the judiciary do not hesitate, the people are with you, and I tell the security be firm, the people are with you, with you. And I tell the politicians and the government do not provide cover to the perpetrator." Beautiful words, indeed.

The next days will now prove whether Lebanon will continue with the peaceful normality of the last four years or it will revert to the previous turmoil.