Chevron's (CVX) LNG Facility Faces Unions' Strike Warnings
Chevron Corporation’s (CVX) unions at liquified natural gas (LNG) facilities in Australia cautioned that work stoppages due to strikes could cost the company billions of dollars if labor demands over wages and conditions were not satisfied. Workers at a neighboring Woodside facility voted to approve a deal struck by the same unions, per media reports.
On Thursday, workers at the Wheatstone and Gorgon projects of Chevron approved a strike request from the Offshore Alliance of unions. Approximately one-tenth of the global LNG supply comes from the North West Shelf, coupled with the Gorgon and Wheatstone projects.
The Offshore Alliance of unions shared a Facebook post regarding Chevron's top management team, saying, "Their stupidity is about to cost them $billions in lost production and profit." Additionally, the unions threatened to take industrial action and condemned the company for bringing a proposition up for a vote without first going through the negotiation process.
A vote to authorize a strike garnered support from more than 99% of the current 450 workers. The strike authorization might include refusal to load tankers or vessels, bans on certain tasks and a full strike. Results of a second vote to authorize a strike by workers at a different Wheatstone facility are anticipated on Aug 28 (afternoon).
Chevron must get seven working days' notice before a strike from the Offshore Alliance, which is made up of the Maritime Union of Australia and the Australian Workers' Union.
According to energy analyst Saul Kavonic, Chevron could face some low-level industrial action that is unlikely to significantly disrupt supplies.
Zacks Rank & Key Picks
Chevron currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are USA Compression Partners, LP USAC, currently sporting a Zacks Rank #1 (Strong Buy), and Global Partners GLP and Evolution Petroleum Corporation EPM, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
USA Compression Partners is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USAC has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.
Global Partners is a Delaware limited partnership, formed by affiliates of the Slifka family. The partnership owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. GLP is one of the largest wholesale distributors of distillates. It has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields, and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
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