Chevron's (CVX) Australian LNG Operations Face Labor Strikes
Chevron Corporation’s (CVX) liquefied natural gas (LNG) operations in Western Australia are in jeopardy as workers at the Gorgon and Wheatstone facilities vote to resume strikes, per a Reuters report. This comes after unions claim that Chevron reneged on its commitment to accept the recommendations put forth by the Fair Work Commission (FWC).
According to the report, workers at Chevron's LNG facilities have chosen to recommence strikes, following a similar decision made by their colleagues in a meeting held less than 24 hours earlier. The Offshore Alliance, a union coalition representing the workers, announced that night-shift workers from both the Gorgon and Wheatstone facilities supported the strike.
The alliance, representing nearly 500 members of the Australia Workers' Union and National Maritime Union employed at Chevron's operations, announced its intention to file a notice of further Protected Industrial Action. Under Australian labor law, the union must provide at least seven days' notice before the strike’s resumption. Unions have indicated their intention to submit this notice on Monday, indicating a likely disruption to Chevron's operations in the coming weeks.
Per the report, CVX has not yet issued a public response to the escalating labor dispute. However, the company emphasized its commitment to reaching a resolution in collaboration with all parties involved. Chevron aims to finalize a deal based on recommendations put forth by Australia's industrial arbitrator, the FWC, in September.
The ongoing labor dispute poses a substantial risk to Chevron's LNG operations in Western Australia. Potential disruptions in production and supply could have significant ramifications for the company's finances. Additionally, the dispute highlights broader challenges facing the LNG sector in maintaining stable labor relations since the two facilities at Gorgon and Wheatstone account for approximately 10 percent of the global LNG production.
Zacks Rank & Key Picks
Chevron currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Matador Resources Company MTDR and Pioneer Natural Resources Company PXD, each currently sporting a Zacks Rank #1 (Strong Buy), and Core Laboratories Inc CLB, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador Resources is among the leading oil and gas explorers in the shale and unconventional resources in the United States. The company’s prime intention is to create more value for shareholders and generate lucrative returns from the capital invested in unconventional plays. MTDR has witnessed an upward earnings estimate revision for 2023 and 2024 over the past seven days.
Pioneer Natural Resources is a leading upstream energy firm with primary operations in the Permian basin, which is among the lucrative oil shale plays in the United States with fewer risks. Pioneer's total holding of more than 1 million net acres in the Permian basin will support long-term oil production growth. PXD has witnessed an upward earnings estimate revision for 2023 and 2024 in the past seven days.
Core Laboratories’ strong presence in the emerging shale plays and its global footprint will provide for steady growth rates going forward. CLB’s technology-heavy portfolio of proprietary products and services gives it the opportunity to optimize production from the new and existing fields. It has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 60 days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Chevron Corporation (CVX) : Free Stock Analysis Report
Core Laboratories Inc. (CLB) : Free Stock Analysis Report
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
