Today’s Blog – Tuesday 30th May 2017

Editorial

One of the less reported outcomes that emerged from last week’s OPEC meeting was an explicit plan by the Saudis to divert cargoes away from the US, with Energy and Industry Minister Khalid Al-Falih saying: “Exports to the U.S. will drop measurably.”

The rationale for this move was captured well by Bart Melek, a commodity strategist at Toronto Dominion Bank, who concluded:

“With OPEC now consciously trying to reduce flows into North America, it’s suggesting a faster than expected inventory unwind.  There may be a bigger upside as we go into summer driving season.”

Our view is that there is nothing as likely to drive oil markets upwards as solid weekly “numbers” from the EIA’s inventory report.  And if the Saudis can effectively drive material draw-downs by supplying less crude to the US in the first place – then they will obtain higher prices.  The key to the success of the scheme is whether a “slop” effect will quickly or slowly emerge – that is – global demand and supply are not effected by the scheme, and will diverted Saudi cargoes have unintended price consequences elsewhere.

We think this “cunning plan” has a chance of working – at least for a while – as US inventory numbers are closely followed whereas the data quality on stocks elsewhere in the world is very poor.

Commodity prices

Not much happened in oil markets overnight, due to the Memorial Day public holiday in the US.  In London Brent rose a few cents to close at US$52.29.

Memorial Day is said to be the start of what is sometimes a great white hope for oil markets – driving season.   The Griswolds to the rescue!  However, some believe that the glory days of US driving are similar to those of the country’s comedy movies – not as good as they used to be in the 1980s.

Henry Hub was also closed for the day.

Governments, etc

Whether the US will withdraw from the Paris climate agreement will apparently be determined this week.  Media reports indicate the President is finely balanced between the opinions of the “adults” and what might in UK politics be called the “swivel-eyed loons”.

Our view is that economics rather than political gestures will determine the US’s emissions profile.  If gas prices remain low then gas will beat coal in electricity markets. And if renewables continue on the cost trajectory illustrated by last week’s Arizonan solar PV price of <US$50/Mwh, then the overall share of primary energy markets taken up by fossil fuels in total will fall.

However, expect a lot of end-of-days cries whatever the Donald decides to do (if indeed a clear decision is made).

Company news – Santos (STO)

A strange story on STO was published by the Australian Financial Review (AFR) today. Strange that is, in terms of working out who leaked what and what was their intent.  The story basically seemed to come from sources in the Government who alleged that STO is bullying some customers (including the iconic Arrium in Whyalla) to accept much higher gas prices.

We assume that behind the scenes there is a fierce dispute between STO and the Feds over the latter’s domestic gas reservation policy – and the media is a tool that is playing a role in that fight.

Company news – Origin Energy (ORG)

Speaking of parsing the media, another story in the AFR today concerned the sale or float of ORG’s upstream assets in the Lattice Energy vehicle.   ORG has launched a roadshow to push the IPO option – at a price that was said to be “more than A$1 billion”.  

This price seems to be quite a bit less than ORG’s agents were previously promulgating through media channels – where a figure closer to A$2 billion was being spruiked.

The change of tone may well indicate a change in expectations settings as feedback has been received by ORG over the trade sale value of Lattice.

Quote of the day

Apparently entering into the competition of world’s lamest threats, the Nigerian Oil Minister Emmanual Kachikwu recently said:

“If we get to a point where we feel frustrated by a deliberate action of shale producers to just sabotage the market, OPEC will sit down again and look at what process it is we need to do”.

 

 

 

 

Today’s Blog – Monday 29th May 2017

Editorial

One of our recurring themes has been that capital markets might well drive more change in the future energy mix than politicians and regulators.  In this light we note the potential significance of a recent interview with the global head of BlackRock’s infrastructure investment group, Jim Barry, who said:

“Coal is dead. That’s not to say all the coal plants are going to shut tomorrow. But anyone who’s looking to take beyond a 10-year view on coal is gambling very significantly.”

Some in the oil and gas industry might say – “that’s coal – we are much cleaner” (and indeed the strategies of the likes of Shell are to re-weight towards cleaner gas).  However, a less rosy view is that where coal goes today, oil – then gas – might well go tomorrow.

Last week we noted Woodside Petroleum’s annual strategy presentation which advised the market that FIDs on new large scale LNG developments would not occur for 10 years. However, at that point the likes of BlackRock (the largest investment house in the world) but not be very keen on their investee companies committing billions to any multi-decade fossil fuel projects.

Commodity prices

Last week’s OPEC meeting delivered pretty much what the market expected – a 9 month extension of the previously agreed cuts.  The oil price response was a negative one – falls of nearly 5% during Thursday’s trading in what was generally interpreted to be a “sell the news” phenomenon.  Prices bounced back a bit on Friday, but were still down for the week, with Brent closing at US$52.15 and WTI at US$49.80.

Friday’s weekly rig count from BHI reported an increase of only two oil rigs and five gas rigs.

Henry Hub was down ~2% in the week, closing at US$3.31.

LNG and international gas

In a move that is as geopolitical as it is economic, last week Sri Lanka announced that a 50/50 consortium of India’s Petronet and an un-named Japanese company would invest in a LNG regasification plant on the strategically located Island nation.  The counterbalance this provides to China’s port and other investments in the country (as part of the ever growing web of “one belt one road” investments) was obvious.

Counter-balancing other not-necessarily-benign forces was news that LNG should be imported from the US into Poland and the Netherlands in the next week or so. Geopolitics again in terms of reducing Russian exposure – but also a response to better prices, more flexible terms, etc – i.e. a focus on the actual customer.

Company news – FAR Ltd

FAR is holding its AGM this morning and it is interesting to note for the first time in some months a public allusion to what seems is the still unresolved issue of whether the company has a pre-emptive right over last year’s sale of JV interests by Conoco to Woodside.

The presentation to the AGM noted that “preserving” such rights was a key strategic focus of the company – as is keeping open the optionality of selling down or out of pre-production assets to focus on the rather more fun part of the business – new ventures and exploration.

Company news – Central Petroleum (CTP)

CTP was due to hold an EGM next Monday to vote upon its Board recommended takeover by Macquarie Bank by way of a Scheme of Arrangement.  Recent trading in the company’s shares – at a discount to the takoever price – indicated a growing market view that the vote at the EGM might reject the Scheme.

The company has reacted today by initiating a trading halt pending news of a delay in the vote and more information to be sent to shareholders (the previous ~500 page booklet was clearly too short).  CTP shareholders seem to be economically supporting the high remuneration of Australia Post’s CEO that has recently been the focus of media attention.

Quote of the day

Departing Australia Post CEO Ahmed Fahour on what he thought was unreasonable focus on his >$5M annual salary:

‘’I was bemused at the time because there were some CEOs who were doing some things that were not so great to their secretaries and some were not running their businesses very well, and they seemed to keep their jobs and nobody seemed to care about what they were being paid.”

 

 

Today’s Blog – Thursday 25th May 2017

Editorial

The industry press has contained a fair bit of comment on how the recent regulatory relaxation that allows the direct sale of US LNG to China might shake up the global LNG industry.

Research group Rystad Energy has joined the fray – concluding that new Chinese sales will allow North American production to increase to well over 100 Bcf per day (in comparison, domestic East Coast consumption in Australia is around 700 Bcf per year). Additional volumes were thought to largely come from the prolific Marcellus/Utica Basins – at current Henry Hub prices of just over US$3/mcf.

However, an implicitly contrary view comes from the likes of Tudor Pickering Holt (TPH) – who consider that the current US gas market is currently structurally under-supplied – that is, that production is less than consumption, with a swollen inventory that is only gradually being eaten up allowing prices to stay at current levels.  The logic of this argument must then go onto say – current prices are not driving new investment – and therefore the weakness in the Rystad view is that a few extra 10s of Bcf of production per day will not magically appear at those current prices.

So – China plans to consume a lot more gas (its economy uses far less gas than the similarly sized US one) – the US could sell more gas to it – but presumably prices would have to rise in order to bring on more US production – in which case other suppliers nearer to the PRC could be able to out-compete.

There are lots of moving parts – and other views – including the one we quoted last week – that the Permian will produce a lot of “free” associated gas that will look for a home.

Commodity prices

Oil prices fell overnight as the current OPEC meeting proceeded.  Brent closed down 0.7% at US$53.83 and WTI rallied a bit later in the day to close down only 0.2% at US$51.36.

The weekly EIA report had a strong crude draw of 4.4 mmbbls (or 4.8 including SPR sales); weaker than expected gasoline draw of 0.8 mmbbls and distillate down by 0.5 mmbbls.  All up this appeared to be quite bull-ish to us – but the bears took the day with a view that gasoline disappointed.

Henry Hub closed down nearly 1% at US$3.20.

Disruption

The ongoing global news flow of rapidly declining bulk EV solar production costs continues.  An Arizonan utility has just contracted to purchase electricity at ~US$40/Mwh whilst across the planet an Indian deal (the reporting is somewhat confusing on units and currencies) has been done at what seems to be an even lower one.  These are still higher than the record sub US$30/Mwh recorded in the UAE last year – but are still very low.

Fossil fuels for new build power stations generally cannot compete with this on a simple per Mwh metric – only by recognising their dispatchability can they do so (which is hard to price – and becoming worth less as storage technologies themselves deliver lower costs).

Company news – Shell

Our readers are all expert players of bullsh** bingo – and would see many chances to bang the table with the following quote from Shell’s VP of Upstream Unconventionals – reported in a recent TPH daily note:

“Rather than physically separate the organization or acquire an independent and bolt it on as others have done, Shell has elected to fully integrate its unconventional unit in the global structure.  Shell’s perceived slow start was a function of the objective recognition that building unconventional capability was the critical first step to success…. the team is not trying to distance from its integrated parent, but rather take advantage of the strengths global scope and scale provide – balance sheet, technical reach and bench strength, etc.”

Observers in Queensland as to how Shell actually operate in the CBM space might note a small gap between corporate theory and on-ground ultra-high cost reality….

Quote of the day

Following the demise of suave 007 actor, James Bond, a quote from The Man with the Golden Gun that provided good practice material for Steve Coogan and Rob Brydon in The Trip:

Bond – When I kill, its on the specific orders of my government. And those I kill are themselves killers.

Scaramanga –  Now, Come, come, Mr. Bond. You disappoint me. You get as much fulfillment out of killing as I do, so why don’t you admit it?

Bond I admit killing you would be a pleasure.

 

Today’s Blog – Wednesday 24th May 2017

Editorial

The Trump administration has now put a more fulsome (i.e. longer than the earlier one page effort) budget to Congress.  Unexpectedly this contained US$16.6B of revenue over the next 10 years from selling down half of the crude stored in the strategic petroleum reserve (SPR).

We think that the White House’s budget proposals will not carry a lot of weight over on Capitol Hill and therefore consider that a lot of water would have to flow under the bridge before this ever happened.  The former colleagues of the Secretary of State – as well as the rest of the not-afraid-to-lobby US oil industry – and the Defence establishment – might have something to say about this new long term overhang on oil markets.

Some would say – “its only 100,000 bopd, that won’t move markets“.  However, we think the psychological impact would be higher than the arithmetical one.

Also coming out from Washington was news of a move which we have flagged before – the opening up of what many consider to the most prospective conventional crude oil ground in the world – the coastal strip of Alaska’s Arctic National Wildlife Refuge.  The potential billions of barrels located here are much more material than half of the SPR. However, even if non-legislative opposition to exploration/development here is overcome, it would likely be 10 years to bring it to market.

Given the high cost location, likely strong social opposition (including potentially significant shareholder groups) – and this timeframe – this oil might never be developed for economic and social rather than legal reasons.

And over-riding all of that is the echo of Sheikh Yamani’s famous comment – “the Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil”.  If the impressive solar/wind cost reduction trajectory continues – how will that affect Board decision making on making FIDs in ~10 year’s time on massive projects such as this?

Commodity prices

Crude prices have risen steadily over the last two days, closing last night at US$54.19 in London and US$51.47 in New York.  There is now a strong consensus that the imminent OPEC meeting will deliver a 6-9 month cut extension – and last night the API estimates of inventory reductions were bullish.

Henry Hub has oscillated +/- 2% over the last two days – closing at US$3.23 last night.

LNG and international gas

We recently reported on a successful flow test on sub-sea methane hydrates currently being undertaken by the Japanese Government.  The Chinese have now gone one-up on that – announcing a much higher (but still uncommercial) flow rate of what we understand was ~0.5 mmmscf/day.  They even published a picture of the flare – always a good sign of confidence.

Methane hydrate resources are massive – and often “owned” (nine-dash line anyone?) by major consumers.  A low probability tail-risk maybe for the industry – but massive in its disruptive effect on existing conventional gas resources if it was to come good.

Company news – Woodside Petroleum (WPL)

WPL provided the market with an updated corporate strategy presentation yesterday. This was a cautious focus on dollars rather than barrels in the short term (hurray! say many shareholders) and a clear indication that no greenfields LNG projects would be FID’ed for 10 years (a timeframe however that plays into our question above).

As we flagged last week, over the medium term, WPL shareholders could arguably make more money from the success of its infrastructure management skills over its E&P ones – but does it make sense to maintain the current corporate structure to do this?

Company news – Origin Energy (ORG)

The Australian Financial Review (AFR) today provided an update on the parties who are said to be interested in a trade sale of ORG’s upstream Lattice Energy business.  No new operator names emerged – although the apparent interest of various US PE groups in partnering with ASX listed companies was emphasised.  None of the mooted buyer combinations appeared to have a particularly compelling competitive advantage however.

Calling all Chinese billionaires – please come and buy us!

Quote of the day

Although we have expressed some doubts above on the White House’s budget passing skills, we have to acknowledge The Donald nailed it with yesterday’s tweet:

“I won’t call them monsters, because they would like that term. They would think that’s a great name. I will call them from now on losers, because that’s what they are. They’re losers. And we’ll have more of them, but they’re losers. Just remember that.”

 

 

 

Today’s Blog – Monday 22nd May 2017

Editorial

A couple of news stories from late last week illustrate the still very strong demand for “low risk” infrastructure assets – and that such assets are not necessarily risk-free.

Origin Energy (ORG) has just announced the sale of a suite of pipeline assets in central Queensland to Chinese/Singapore Government owned energy infrastructure company Jemena.  The price is A$392M.  In a classic example of how numbers can be manipulated, the parties differ on what multiple of EBITDA this price represents – the seller says it is 17 and the buyer says it is much less.

A certain infrastructure asset sale at an even higher EBITDA multiple took place in 2015 – the acquisition of the Iona Underground Gas Storage business by QIC from Energy Australia for A$1.7B.  On Friday news emerged that QIC has initiated court action in Victoria over this transaction – basically saying that Energy Australia wilfully misled in in the sale process for this asset and it is now seeking nearly A$1B in compensation.

That is, more than half the value of this “low risk” infrastructure asset is in dispute.  The parties involved here are pretty gold plated – as are their advisers such as Lazard on the sell side – and Management on both sides.  There seems to have been either a gross failure of due diligence or deception on a hugely material scale.  Boards across the country would presumably be wondering what horrors might emerge from proposed transactions their Management teams are recommending to them.

In our view this dispute has consequences beyond the rather small scale of media coverage it has attracted to date.   For instance, energy regulators and politicians should be thinking about whether there is less gas deliverability capacity from Iona than previously thought – and what that means for meeting e.g. peak winter demand in Victoria.

Commodity prices

Crude had a good week last week – rising 5% to close at US$53.61 in London and US$50.33 in New York (a three week high).  With an OPEC meeting imminent, the Saudis particularly have been issuing strong signals of a significant extension – and possibly even deepening of the current production cuts.

Meanwhile, over in the US oil patch, the rig count just continues to climb. Friday’s BHI weekly report indicated a rise of 8 oil rigs and 8 gas rigs.

Henry Hub had a poorer week than crude – down 5% – closing at US$3.26.

LNG and international gas

We have previously noted that the only global LNG project to make a FID last year was the rather obscure (and smaller scale) Woodfibre project in British Columbia.  This was facilitated by a degree of vertical integration into Chinese gas markets that its Indonesian billionaire owner delivered through various business interests.

Last week Reuters reported on ongoing developments in this vertical integration process, with plans for a small scale (2 mtpa) regas facility in Guangzhou being developed by Woodfibre and a local gas retailer.  The owners of the other “100” projects looking for FID might take note of what it takes to move forward gas resources into long LNG markets at present.

Governments, etc

Balance of power holder in the Senate, and all round expert in everything, Nick Xenephon, has added his input to the local Australian gas crisis debate.  According to him, the price here should be A$5 and its all the fault of the gas companies holding back developments – “use it or lose it!” he has cried.

Now, apart from the rather distant (and somewhat more than A$5 to develop and deliver) Browse resources, we look forward to Xenephon telling us where these cheap resources are.  Then we could take a class action against the companies involved for wilfully missing out on profits for shareholders.

Company news – Santos (STO)

Late last week STO sent emails to its shareholders inviting them to “support Australian natural gas”.  Details were scant, but presumably this represents a timely effort to counter the scaremongers, lock-the-gaters, anti-frackers, etc, who otherwise have been much better at using modern social media to advance their agenda than has been the industry itself.

Quote of the day

Presumably the following recent quote will not be on the front page of the forthcoming Aramco prospectus:

“We are planning to be leaving totally the dependency [on oil] that we have been living for the last 40, 50 years. Hopefully by even 2030, I wouldn’t care if the oil price is zero, although I would like it to be $100 and $150.” – Mohammed Al-Jadaan, finance minister of Saudi Arabia

Today’s Blog – Thursday 18th May 2017

Editorial

As we have previously reported, BHP has come under public attack from a small but influential shareholder – US activist investor Elliot Associates.  Based on public comment from BHP and financial media commentary, it seems that the most likely fall-out from the attack is an accelerated sell-off of BHP’s US shale gas/oil assets – likely by trade sale rather than spin-out/IPO.

Today’s Australian Financial Review (AFR) reports that BHP has concluded that the success of US shale is highly unlikely to be replicated elsewhere – due to the nearly unrivalled quality of the US rocks – and also the country’s amazing petroleum infrastructure (not only pipelines, but knowledge of the sub-surface, access on the surface, oil-field people, the deep and cheap service sector, etc).

BHP’s analysis is not new – but is interesting to juxtapose with ongoing current interest by others in Australian shale plays in the Northern Territory (interest in shale in the Cooper Basin seems to have largely come and gone).

The connection by the NT to the East Coast (and the upcoming need by Darwin LNG for replacement feedstock) has driven parties such as Origin Energy (ORG), Santos (STO) and a host of smaller companies to invest in shale the NT.  Unfortunately their efforts have been retarded by a typical so-called moratorium – but there are signs that this will be partially lifted.

If BHP is correct these parties are wasting their time and money.  It is easy to see that surface and infrastructure access will be orders of magnitude tougher in the NT than in say Texas.  The question might then become – the price of gas in Australia is higher than at Henry Hub – does that sufficiently compensate?

Commodity prices

Crude prices rose slightly (by ~0.5%) overnight, with Brent closing at US$52.03 and WTI at US$49.07.  The weekly inventory report was quite strong (and was the 6th in a row with a fall in crude stocks): crude was down 1.8 mmbbls, gasoline was down by 0.4 mmbbls and distillate was down by 1.9 mmbbls.

Henry Hub had a bad day – down nearly 5% to US$3.19 (somewhat lower than Australian ~A$10 gas prices the NT companies named above would point out).

LNG and international gas

Another day, another delay and/or outage in an Australian LNG project.  Icthys, Prelude, Wheatstone and Gorgon – all  have current problems.  It seems that the most reliable liquefaction plants are those on Curtis Island – that however lack the high quality feedstock the above listed assets possess.

Disruption

Over the last 24 hours alone a number of media commentators, financial blogs – and most interestingly, from hard nosed industry people – have referenced a new paper by (inter alia) energy disruption supremo, Tony Seba, called The Disruption of Transportation and the Collapse of the Internal-Combustion Vehicle and Oil Industries.

This is a good summary of the thinking on how the disruption patterns seen in many other industries could hit the massive oil and gas sector, the number of countries who almost solely live off it, the motor manufacturing sector, etc.

If even only some of this comes to pass, then this time (dare we say it) – “it really is different”.

Company news – Beach Energy (BPT)

The AFR today reported that BPT had added to the ranks of investment bankers acting for it in its potential purchase of ORG’s upstream Lattice Energy assets.

What the article did not mention was the view of BPT’s largest shareholder – Seven Group – a company that does not seem to have a lot of financial capacity to take part in a large BPT rights issue – but would presumably not want to dilute its substantial (near controlling?) shareholding.  Could it vend in e.g. the ill-starred Longtom asset for stock and maintain its position?

Quote of the day

From the Disruption report noted above:

“Oil demand will peak at 100 million barrels per day by 2020, dropping to 70 million barrels per day by 2030. That represents a drop of 30 million barrels in real terms and 40 million barrels below the Energy Information Administration’s current “business as usual” case. This will have a catastrophic effect on the oil industry through price collapse (an equilibrium cost of $25.4 per barrel).”

 

 

Today’s Blog – Wednesday 17th May 2017

Editorial

Your blogster has just returned from a couple of days at Australia’s peak conference for the oil and gas industry – APPEA – this year held in Perth.  Our key takeaways:

  • Numbers were still significantly down from the boom years and the foreign contingent was particularly low.  In our view this reflects not only the current low oil price – but also the low probability of any large new LNG projects being developed in Australia in the near future.  Or indeed ever.
  • We are collecting bets on which IPO would you least like to invest in: the sale by a Medieval theocracy of a non-controlling stake in Saudi Aramco – or – the sale by aggressive PE firms of a depleting Western Australian gas business for more than they paid for it a few years ago – or – the sale by Origin Energy (ORG) of some generally late life Australian gas assets whose upside seems likely to be contracted away to ORG.  Hmmm.
  • To us the elephant that is being studiously ignored in the petroleum industry room is the enormous cost cutting made in rival renewable energy technologies in recent years.  The industry resists the “this time its different” mantra and assumes the old cycle will be renewed as it always has before.  But sometimes things are different – ask Kodak.

Commodity prices 

Crude prices rose strongly on Monday – due to news about Saudi Arabia and Russia agreeing to extend the current OPEC/non-OPEC freeze into 2018.  Last night prices closed at US$51.30 in London and US$48.66 in New York.

A comment in Houston based industry adviser, Tudor Pickering Holt’s daily email captured well the bullish view on the what the OPEC freeze has achieved:

“When OPEC started this price turmoil in Nov’14 they were sending a message to 1) US tight oil, 2) heavy oil, 3) Arctic, and 4) deepwater   So far, US tight oil is the only area to show signs of life and we wonder if OPEC believes that 11 counties in W. TX and S.E. NM can supply a 100mmbpd global oil market over the medium/long term.”

Henry Hub closed at US$3.23.

LNG and international gas

At APPEA the two old geo-politcal foes (but now sharers of secrets in the Oval Office it would appear), the USA and Russia, spruiked their respective LNG messages.

The US, as represented by Tellurian (fronted by Pommie ex-BG exec Martin Houston rather than an actual good-old-boy), said that US gas prices were heading down sharply, due to a wall of “free” associated gas from the Permian.  Hence US LNG would be the cheapest in the World.

The Russians, owner of the world’s largest low cost conventional cost resources, spoke of ambitious timetables for more pipeline gas (to e.g. China) and LNG from Sakhalin, the Arctic, etc.

The US case is bullish – but the Russian one relies on a more “efficient” economy and society than Moscow’s kleptocracy arguably possesses.

Governments

The NT Government gave some support at APPEA to those looking for a lifting of its fracking moratorium – albeit with more hints that any lifting will be localised rather than general.  If this happens, the winners and losers seem unlikely to be determined scientifically….but rather by a licence holder’s lobbying skills and the compromises that politicians will likely make with local indigenous groups.

Company news – Santos (STO) and Oil Search (OSH)

The Muruk exploration well in PNG (now with numerous successful side-tracks) keeps on delivering for its partners (STO, OSH and Exxon).  Results this week indicated great reservoir quality and still more volumetric upside, with the gas-water contact not yet hit.

The other 100 global LNG projects looking for customers/FIDs will not like the sounds of this.

Company news – Woodside Petroleum (WPL)

WPL have continued to promote the use of Browse gas through the North West Shelf liquefaction facilities when the existent feed-stock starts to run-off.  Whether WPL will derive more money from being an infrastructure owner rather than a sub-surface resource owner is open to question.

No doubt its Board is actively considering a break-up that could deliver substantial shareholder value, with the minor consequence of reduced senior management and Director compensation.  Wait a minute!

Quote of the day

News from an anonymous source on NATO’s preparation for dealing with Trump might resonate with industry people’s recollections of some of their own previous chief executives:

“It’s like they’re preparing to deal with a child – someone with a short attention span and mood who has no knowledge of NATO, no interest in in-depth policy issues, nothing”.