The Chevron logo is pictured after the US government granted a six-month license, allowing Chevron to boost oil production at a US-sanctioned Venezuelan facility, in Caracas, Venezuela December 2, 2022. Reuters/Gaby Ora/File Photo Licensing Rights Receive
- Unions plan to stop some work from Sept 7
- Chevron’s Ops-Analyst Stopped ‘Adding Inefficiencies’
SYDNEY/SINGAPORE, Aug 29 (Reuters) – Chevron’s (CVX.N) two major liquefied natural gas (LNG) production facilities in Australia may have to halt work for up to 10 hours a day next week, as unions on Tuesday called a dispute had threatened labor action. Over pay and conditions.
Chevron’s Gorgon and Wheatstone projects account for more than 5% of global LNG capacity, and European natural gas prices rose on news of possible strikes.
Workers at the Gorgon and Wheatstone downstream facilities plan to stop work for seven hours in two blocks on 7 September, 10 hours on 8 September and 11 hours on 9 September, according to a document on planned actions reviewed by Reuters. Will increase for hours.
A short three-hour stoppage has been planned at the Wheatstone production platform from September 7, the document said, detailing further interruptions in work until September 14.
“Members will participate in rolling stoppages, restrictions and limits that will increase each week until Chevron agrees to our bargaining claim,” the Offshore Alliance said in a Facebook post on Tuesday.
“As (industrial action) tapers off, Chevron will have to pay the price for its LNG exports,” said a coalition of the Maritime Union of Australia and the Australian Workers’ Union.
A Chevron spokeswoman declined to comment on the Offshore Alliance’s latest position, citing a previous statement that the company “will continue to take steps to maintain safe and reliable operations in the event of a disruption.”
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The unions still have the option of calling off the strike if their conditions are met. Unions warned last week that the work stoppage could cost Chevron billions of dollars in losses.
A similar action last year by the same union coalition against Shell (SHEL.L) at the Prelude floating LNG site in northwestern Australia caused the company to lose nearly $1 billion in exports in the two months it took to reach a payment agreement .
The Dutch September natural gas contract, which was trading about 3.5% higher on Monday at 36 euros per megawatt hour (MWh) before the industrial action news, rose 10.4% to 38.40 euros/MWh, up 2.40% from Friday.
‘Draconian early action’
Energy analyst Saul Kavonic said the planned work disruption would “increase inefficiencies” in Chevron’s operations and could prevent the projects from maintaining full production.
He said, “A ten-hour work stoppage: this is a far more drastic initial industrial action than the unions had planned for Woodside.”
“But it is unlikely to impact production to the extent that it would turn the dial up for global markets.”
International energy companies operating in Australia, which are unable to make decisions solely at the local level, see a faster increase in industrial activity than domestic companies, he said.
Last week, the Offshore Alliance and Woodside (WDS.AX) resolved labor disputes at Australia’s largest LNG facility, the North West Shelf, after talks over higher pay, job security and a worker-friendly roster, avoiding industrial action. Did.
Australia is the world’s biggest exporter of LNG, which is mainly used for power and heating in Asia as many countries try to reduce their reliance on coal or oil.
Concerns over potential industrial actions at Woodside and Chevron’s LNG facilities – which account for a tenth of global supply – have fueled extreme price volatility in global LNG markets in recent weeks.
Reporting by Renju Jose and Lewis Jackson in Sydney and Florence Tan in Singapore; Written by Alasdair Pal; Editing by Chris Reese, Sri Navaratnam and Tom Hogg
Our Standards: The Thomson Reuters Trust Principles.
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