Chevron Australia Pty. Ltd. said on Thursday it has accepted a working conditions recommendation made by the Australian Fair Work Commission (FWC) in hopes of ending a strike that has hit its liquefied natural gas (LNG) facilities.
Striking workers at the Wheatstone and Gorgon facilities have also decided to accept the FWC’s recommendation after “substantial improvements” in terms of employment and will now work with the Chevron Corp subsidiary. to finalize the deals, his union said Friday.
The labor court on Thursday issued a recommendation setting out working conditions on working hours, accommodation conditions, allowances, wages, promotion and job security. “The parties are close to reaching historic first business agreements for these Chevron LNG facilities in Western Australia,” FWC Commissioner B Riordan said in the decision posted on the agency’s website. “To date, a large number of issues have been resolved, without prejudice, which should form the basis of business arrangements between the parties going forward.”
Chevron Australia had said it would formally ask the FWC for the government body to exercise its option to enforce its own working conditions on both disputing parties after an impasse.
Workers on the projects have been on strike since September 8 after failing to reach a bargaining agreement with Chevron Australia despite mediation by the FWC.
Its union, the Offshore Alliance (OA) coalition between the Australian Workers Union and the Australian Maritime Union, has accused Chevron Australia of ignoring industry-wide demands for working conditions and insisting on its own terms rather than accommodate a union-initiated venture. negotiation agreement
However, in a statement emailed to Rigzone on September 11, Chevron Australia said the demands were above market level and that it saw “no reasonable prospect of settlement” between the two sides, the company would request so-called intractable trading statements from the FWC. .
But the OA said in a statement sent to Rigzone on Thursday that the disputing parties met again last week with the mediation of the FWC. And in its own statement sent to Rigzone on Thursday, Chevron Australia said it has now accepted the working conditions the FWC issued earlier in the day.
“Chevron Australia has consistently engaged in significant negotiations in an effort to finalize business arrangements on market competitive remuneration and terms. Today we were provided with a recommendation from Commissioner Riordan,” Chevron Australia confirmed in the emailed statement .
“After considering the recommendation, Chevron has accepted the recommendation to resolve all outstanding issues and finalize the agreements,” the company said. “We have informed the commissioner of our position and have written to unions and other employee bargaining representatives confirming our acceptance.”
The OA also said in a statement sent to Rigzone on Friday that its members have agreed to accept the FWC’s recommendation after a meeting on Thursday night. “Members of Chevron’s Offshore Alliance approved a recommendation made by the Fair Work Commission at a mass overnight meeting of more than 350 workers,” the emailed statement said.
“The proposed enterprise agreements, which incorporate the Commissioner’s recommendations, contain substantial improvements to terms and conditions of employment, including increased pay, job security, blocked lists, career progression and the return of all employees to a list of the 40 percent,” the union added.
“The Offshore Alliance will now work with Chevron to finalize the drafting of the three agreements and members will soon cease the current industrial action.”
The FWC’s decision came the same day the OA gathered a majority of votes endorsing a business deal with Woodside Energy Group Ltd., according to a union statement sent to Rigzone earlier Thursday. The OA had planned a strike at the North West Shelf LNG facility operated by Woodside, in which Chevron Australia also has a stake, but called it off after reaching an agreement in principle, according to a statement of the union on August 24.
“Members of the Offshore Alliance in Woodside have voted overwhelmingly in favor of a deal with the company. [Woodside] while Chevron members will meet tonight to consider a recommendation made this morning by the Fair Work Commission after the parties engaged in talks before the FWC earlier in the week,” the OA said in the statement sent by email Rigzone on Thursday.
Supply interruption
Most of the output from the Gorgon, North West Shelf and Wheatstone facilities goes to customers in Asia, who have signed long-term contracts, according to information on Chevron Australia’s website.
S&P Global reported on September 11, the first day of the strike, “A number of LNG buyers in Asia said they expect to see a limited impact on supply in the first few weeks. [of the strike]but it could feel a bigger blow if the strikes last longer.”
“The strike situation would affect Japanese buyers more, but they seem to be holding on,” said an unnamed LNG importer in China, quoted by the financial analytics and news provider.
“There will be limited impact from the strikes in the short term as inventory is high in Asia, the longer term impact could be there if the strikes continue for a prolonged period.”
Following an outage at the Wheatstone facility, Chevron said in a statement emailed to Rigzone on Monday, “Chevron Australia confirms that full production resumed last night (September 17) at the facility ·lation of Wheatstone gas after failure on 14 September”.
“During this time LNG continued to be produced at approximately 80 percent of normal rates, and vessel loading continued,” it said in the statement. “There has been no change in scheduled LNG deliveries. Domestic gas facilities and supply were not affected.”
However, the OA said in a statement on Facebook on Tuesday: “Chevron is still stretched and they’re just hoping beyond hope that they don’t lose a train or two at the Wheatstone and Gorgon facilities. Which it is almost inevitable in light of the Protected Industrial Action in its 3 facilities”.
To contact the author, please email jov.onsat@rigzone.com
