Australia LNG strikes: workers vote in favour of new deal

Australian offshore workers’ union consortium the Offshore Alliance confirmed the outcome of the vote from its membership across each of the Chevron facilities, saying the result was "overwhelmingly ‘YES’ in support of the Union negotiated EBAs".

The agreements cover the unionised workforces on Chevron’s Gorgon, Wheatstone Downstream and Wheatstone Platform facilities.

"Thanks to the work of our legal team and the support of our members, we now have EBAs locked in with each of the oil and gas majors," the Offshore Alliance posted on its Facebook page. 

20 October

The Offshore Alliance posted on its Facebook page that 94% of its membership across Chevron’s Western Australia LNG facilities had voted in support of a renegotiated agreement in principle. 

The vote suspends strike action, also called protected industrial action, as union members review the terms of the proposed EBAs ahead of votes on three agreements that cover workers at Chevron’s Wheatstone and Gorgon facilities.

"The Offshore Alliance is encouraging members to vote ‘Yes’ on the three enterprise agreements which deliver members secure jobs, significant improvements in employment conditions and the ability to push back on Chevron’s efforts to implement unilateral changes to the industrial rights of workers," the organisation said.

6 October

The Offshore alliance said that workers at Chevron’s Gorgon and Wheatstone Facilities had directed their union representatives to file a notice of protected industrial action after negotiations over broad-based recommendations from Australia’s Fair Work Commission (FWC) have broken down. The notice, the consortium said, is forthcoming on 9 October and would allow, but not require, worker strike action from seven days after its filing.

Chevron Australia said in an emailed statement that it is continuing to work with all parties to finalise the drafting process for a new set of wage and benefits terms for employees based on the FWC recommendation.

“Chevron Australia has consistently and meaningfully engaged in an effort to finalise Enterprise Agreements for employees at our Gorgon and Wheatstone gas facilities with market competitive remuneration and conditions. We have accepted the recommendation of the Fair Work Commission, which proposed terms to resolve outstanding claims that would form part of the proposed agreements,” the company said.

Nearly two weeks have elapsed since the FWC handed down its recommendations, which were initially accepted by both sides.

Chevron’s Gorgon and Wheatstone facilities are responsible for producing around 7% of global LNG volumes, according to reports. 

22 September

Chevron Australia said in an emailed statement that both the company and the striking workers’ unions had accepted the FWC recommendations.

“The recommendation resolves the issues that remained outstanding following conciliation sessions this week. The unions have advised Chevron Australia and the Fair Work Commission that industrial action has been suspended. The applications for Intractable Bargaining Declarations are adjourned to enable the process of finalising drafting of the agreements to occur before they are voted on by employees and, if voted up, submitted to the Fair Work Commission for approval," Chevron said.

“We are also pleased to have continued to meet all our commitments to domestic and international customers during this time," the company said.

The FWC recommendation letter, posted to the FWC website on 21 September, and attributed to the FWC commissioner Bernie Riordan, found that the two sides in the bargaining dispute are "close to achieving their desired outcome of registered enterprise agreements to cover the wages and employment conditions for employees".

The Offshore Alliance of workers union posted on its Facebook page on 21 September that workers at Chevron’s Woodside platform had voted 98% in favour of the union’s draft enterprise bargaining agreement, saying the new bargaining agreement would be registered with the FWC. 

On 20 September, the Australian Workers Union filed an application to extend the authorisation period of 30 days under which industrial (strike) action is authorised under the protected action ballot. The extension would be for a further 30-day period.

07 September

The Offshore Alliance has said workers it represents are planning to start protected industrial action at Chevron’s Gorgon and Wheatstone LNG facilities in Australia on 8 September.

Two days ago, the Offshore Alliance increased the duration of the planned strikes to two weeks, posting on Facebook that it "will have rolling 24 x 1 hour stoppages, each day for 14 days from 14 September".

01 September

The Offshore Alliance said workers on Chevron’s Australian LNG facilities have rejected a non-union settlement offer.

"Protected Industrial Action commences on all three Chevron facilities at 06:00 7 September," the Offshore Alliance posted on its Facebook page.

Workers at Gorgon and Wheatstone downstream facilities plan to stop work for seven hours over two separate shifts on 7 September, increasing the stoppage to 10 hours on 8 September and 11 hours on 9 September. The Wheatstone production platform will see a three-hour stoppage from 7 September.

29 August

The Offshore Alliance said its members voted to set strike dates at all three of Chevron’s Australian LNG facilities in a 100% vote.

24 August

The Offshore Alliance said it had reached an agreement in principle with Woodside Energy in Australia for a new enterprise agreement for worker wages and committed to avoiding strike action.

"The Union has committed to not filing a Notice of Protected Industrial Action, with the final drafting of the Agreement being provided by Woodside for review by the Union lawyers on Monday," the Offshore Alliance said in a post on its Facebook page.

The agreement covers workers on Woodside’s Goodwyn Alpha North Rankin Complex and Angel field facilities, and the Offshore Alliance said it would release details of the settlement after meeting with its members.

According to the Offshore Alliance, ballot results from worker votes at Chevron’s Wheatstone Downstream and Gorgon facilities will be published on Thursday afternoon and the Wheatstone Platform ballot results will be published on Monday afternoon.

21 August

The Offshore Alliance said it has given Woodside Energy one week’s notice of protected industrial action (PIA) on the company’s offshore LNG facilities.

The Offshore Alliance, which brings together the Australian Workers’ Union and Maritime Union, said industrial action, protected by law in Australia, could begin seven days after the deadline of close of business on 23 August if its workers’ bargaining points were not adequately resolved by that point. 

"They will lose billions of LNG export revenue if they take us on, as our members are up for the fight. This is an impending dispute which will ultimately stop Woodside’s LNG exports while maintaining domestic gas supply," the Offshore Alliance said in a post on its Facebook page. 

The workers’ unions are also encouraging members across Chevron’s Australian facilities to back industrial action, with ballots open on the Wheatstone platform and downstream facility as well as the Gorgon facility. 
Talks continue between unions and energy companies that, combined, supply an estimated 10% of global LNG market volumes.

15 August

Howe Robinson Partners and others are reporting there was a spike in the price of LNG driven by fears of a shortage if strikes take place among Australian LNG producers.

In a critical time for the LNG spot market, a looming strike risk in Australia has cast uncertainty over global supply. As negotiations continue between unions and major players such as Chevron and Woodside, European importers are on track to meet their capacity, but any disruption in LNG flows will spark worry and consternation among importers worldwide in a tight energy market.

With Australian unions issuing strong warnings to employers and the stakes so high, industry observers are anxiously awaiting the outcome of the talks between unions and energy producers, conscious that continued access to one-tenth of the world’s LNG supply hangs in the balance.

Driving the fear of the strike is its disruption to Northern Hemisphere imports of LNG ahead of the winter months. In part, the fear is a return to the spot rates run that took place in the months between Russia launching a war on neighbour Ukraine in early 2022 and Europe pivoting away from Russian energy flows in response. In this respect, European importers are on schedule to meet the self-imposed required capacity of 90% well before the winter deadline of 1 November 2023. And, with markets on edge, energy flows have tightened prior to the looming strikes as Asian importers have sought to bank their own reserves of gas.

Unions in Australia have threatened to commence strike action pending the results of negotiations on pay and conditions, with negotiations set to continue with Chevron and Woodside. Strikes could potentially disrupt exports out of the Gorgon, Wheatstone and North West Shelf. These projects together deliver around 41.4M tonnes of LNG per year.

The Offshore Alliance had warned the companies not to test its members’ resolve. It highlighted a 76-day dispute that ended last September at a cost of A$1.5Bn (US$975M) for rival Shell at its Prelude facility.

The possible disruption to about 10% of the world’s LNG supply has fanned concerns that Europe would need to outbid Asia for the fuel upon which it has come to depend in the absence of Russian piped gas.

The question remains unanswered, and with the LNG spot market on the cusp of a seasonal change from the summer to winter setting in the Northern Hemisphere, a small disruption in the market could have a large impact.

The strike has not materialised as yet, and LNG spot prices have fallen back slightly on reports of talks taking place to avert these strikes and a reasonable supply of LNG already in storage among some of the largest importers. But negotiations are far from being final.