CVX Chevron Corporation

By Rhiannon Hoyle

U.S. energy giant Chevron and workers at two of its large natural-gas operations have agreed on a deal recommended by 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 in Australia rattled global gas markets in recent weeks, at times jolting prices sharply higher, as representatives of Chevron and local unions struggled to find common ground. Australia rivals Qatar as the world's largest exporter of LNG.

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, Offshore Alliance union representatives said workers had also endorsed it.

"The unions have advised Chevron Australia and the Fair Work Commission that industrial action has been suspended," a Chevron spokesperson said in emailed remarks on Friday. The spokesperson said the company has continued to meet its supply commitments to customers locally and globally.

Escalating strikes at the operations began earlier this month. Analysts had cautioned disruptions to production could result in more competition for spot LNG cargoes, with European countries having become more reliant on the supercooled fuel since Russia cut off most of the gas it used to pump to the continent.

Workers and the company had been at odds over wages and a number of other conditions. Offshore Alliance, a partnership of two local unions, 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.

Brad Gandy, a spokesman for the union coalition, said the recommended deal includes substantial improvements in terms and conditions, including higher pay and improved rosters and job security. "The Offshore Alliance will now work with Chevron to finalize the drafting of the agreement," he said.

Once drafted, labor agreements will be voted on by workers and, if endorsed, will be submitted to the Fair Work Commission for approval, the Chevron spokesperson said.

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

(END) Dow Jones Newswires

September 22, 2023 04:29 ET (08:29 GMT)

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