Chevron Australia LNG workers threaten to resume strikes after talks breakdown

By Lewis Jackson

SYDNEY (Reuters) -Efforts to finalise a pact that ended strikes at Chevron’s two Australian liquefied natural gas (LNG) plants stumbled on Thursday, when workers voted to restart stoppages after unions accused the U.S. energy major of reneging on commitments.

Workers called off major strikes in late September after unions and Chevron accepted proposals on pay and conditions proposed by the country’s industrial arbitrator, the Fair Work Commission (FWC).

But following nearly two weeks of negotiations to turn the commission’s broad recommendations into a legally binding contract, unions on Thursday accused Chevron of “reneging” on key commitments.

At a late night meeting, workers voted to restart strike action at the Gorgon and Wheatstone facilities, responsible for around 7% of global LNG production, according to a union representative, who declined to be named.

Unions must formally provide Chevron seven days’ notice before any strikes can start. This is expected to happen on Monday, the union representative said. Following the notice period, unions have the right but not the obligation to strike.

Chevron said earlier on Thursday that it continued to work with all parties to finalise a deal based on recommendations made by Australia’s industrial arbitrator in September.

“Ideally both parties don’t want to see strikes eventuate again, and a vote to strike will act as pressure to finalise the agreements. But if trust is breaking down we could end up where we were a month ago quite quickly,” energy analyst Saul Kavonic said on Thursday.

“Overall, it is still very likely this will all resolve one way or another without a material supply disruption.”

Chevron and unions had made progress drafting the agreement, but differences remained over issues such as reimbursement for meals or travel for training, according to a second union representative involved in the negotiations.

If the two sides fail to reach a deal, the matter could go back to the commission, which had been due to begin hearings on whether to intervene and end strikes when the parties reached an 11th-hour agreement.

Those hearings were adjourned for four weeks in late September to give time to draft an agreement. Chevron would need to give seven days’ notice before resuming the matter.

Weeks of strikes at Chevron’s Gorgon and Wheatstone facilities roiled natural gas markets, though no LNG shipments were disrupted.

(Reporting by Lewis Jackson in Sydney, Urvi Dugar in Bengaluru, additional reporting by Emily Chow and Ashitha Shivaprasad; Editing by Sonali Paul, Clarence Fernandez and Sharon Singleton)