CVX Chevron Corporation

By Rhiannon Hoyle

U.S. energy giant Chevron and workers at two of its large natural-gas operations in Australia have backed a recommendation from Australia's workplace arbiter to end strikes affecting plants that account for roughly 7% of global liquefied natural gas supply.

The labor dispute at the Gorgon and Wheatstone liquefied-natural-gas facilities has rattled global gas markets in recent weeks, at times jolting prices sharply higher, as representatives of Chevron and Offshore Alliance--a partnership of two local unions--struggled to find common ground. Australia rivals Qatar as the world's largest exporter of LNG.

Escalating strikes at the operations began earlier this month. Analysts had cautioned disruptions to production from the sites could result in more competition for spot LNG cargoes, with some shipments typically destined for Europe-including from the U.S.-likely to be diverted to Asia. European countries have become more reliant on the supercooled fuel since Russia cut off most of the gas it used to pump to the continent.

On Thursday, a recommendation from Australia's Fair Work Commission was put to both Chevron and its workers. The U.S. oil company said later that day it had accepted the recommendation and, on Friday morning in Australia, union representatives said workers have also endorsed it.

"The Offshore Alliance will now work with Chevron to finalize the drafting of the agreement and members will soon cease current industrial action," said Brad Gandy, a spokesman for the union coalition.

Gandy said the recommendation includes substantial improvements in terms and conditions, including higher pay and improved rosters and job security.

Offshore Alliance previously said it wanted an agreement that aligns with those in place at energy companies including Shell and Japan's Inpex, while Chevron said union representatives were seeking terms that were much higher than industry standard.

"After considering the recommendation, Chevron has accepted the recommendation to resolve all outstanding issues and finalize the agreements," a spokesperson said in an emailed statement.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

September 21, 2023 20:49 ET (00:49 GMT)

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