Chevron quotas push Australian engineering jobs overseas

EXCLUSIVE

Chevron is insisting that engineering companies in Australia send work to low-cost countries like India in a seeming clash with local content obligations imposed by the Western Australian government.

The revelation comes after Boiling Cold reported the $387 billion company was also sending work once conducted by its own engineers in Perth to India using criteria that did not have any preference for local content.

Chevron is also cutting its global workforce by 15 to 20 per cent, which, if applied to Australia, would result in 300 to 400 job losses.

The US oil and gas giant has set the minimum amount of work to be done overseas as high as 55 per cent, according to excerpts from a Chevron contract with a major engineering service provider seen by Boiling Cold.

The targets were not enforced in 2024, but in 2025, "workshare utilisation" is a key performance indicator (KPI) for companies providing engineering services to Chevron, according to an engineer with knowledge of the arrangements who is not authorised to speak to the media. They said the KPI would impact the contractor's financial returns and its chances of securing additional work.

"Workshare utilisation" was defined in the contract as the proportion of total hours worked in India or Colombia.

The minimum portion of work sent overseas was 40 per cent for small projects and front-end engineering design (FEED), 30 per cent for pre-FEED work and 55 per cent for detailed design.

Many Perth oil and gas engineers have contacted Boiling Cold with concerns not just about their own jobs, but the future of their profession in WA.

Chevron's push to move its contracted engineering work to low-cost countries was regarded as likely more damaging than its plan to cut its own Perth team.

Many noted that other mining, as well as oil and gas, companies operating in WA were also actively minimising the amount of engineering done in the state that owns the resources they extract.

One engineer was particularly concerned about detailed design going overseas, as performing this work was how many new graduates entered the profession.

The local branches of large global firms such as WSP, Wood and Worley perform most of the engineering work done for Chevron in Perth.

A Perth-based senior executive with a global engineering firm, not authorised to speak to the media, said these firms had their own incentives to send Chevron's work overseas as they kept much of the savings from lower wages themselves and only allocated a portion to Chevron.

Local content from a foreign giant?

WA is a vital part of Chevron's global business.

Its stakes in the two gas export plants it operates in WA - Gorgon and Wheatstone - together with a share of Woodside's North West Shelf project earned it a profit of $US5.2 billion ($8.1 billion) in 2024: 30 per cent of its global earnings.

The profits are only possible because of two deals Chevron made with the WA government: The Barrow Island Act for Gorgon and the confidential Wheatstone State Development Agreement, whose local content provisions were only made public weeks ago when tabled in Parliament.

Chevron is required to use local consultants such as engineers "when it is commercially practical" for Wheatstone and "as far as it is reasonable and economically practicable so to do" for Gorgon.

Chevron was asked whether it would amend its contracts with engineering companies to exclude work for the Gorgon and Wheatstone projects from workshare utilisation targets.

A Chevron spokesman said it was committed to meeting its local content obligations and required its contractors to comply with its Australian industry participation requirements.

“Given our operated assets in WA, Gorgon and Wheatstone, are long-term energy developments, we will continue to depend on the talent of our local workforce for decades to come," he said.

“Since 2009, together with our joint venture partners, we have spent more than $80 billion in Australia on our Gorgon and Wheatstone natural gas facilities,"

"Around 90 per cent of our annual operating expenditure is spent in Australia."

A spokeswoman for Premier Roger Cook said he had written to Chevron to remind them of their local content provisions stipulated in State Development Agreements, and his expectation that they would be fulfilled.

“Creating local jobs is a priority for the State Government as demonstrated through our Made in WA Plan," she said.

“We continue to expect large resource projects to employ Western Australians and use local businesses.”

On 18 May, Chevron had 159 jobs advertised in India and only seven in Australia, all of which were 12-week-long summer internships.

Read all of Boiling Cold's coverage of Chevron offshoring Australian engineering jobs:

Revealed that Perth-based Chevron engineers will have to train their Indian counterparts before losing their jobs to offshoring that appears to disregard WA's local content provisions.

Chevron documents show that jobs from across the company's WA operation will be sent to India, and the criteria used have no regard for local content obligations.

This story - More Chevron documents reveal the company is enforcing quotas on their contractors to push more engineering work overseas, again seemingly contrary to local content requirements.

Since the first story:

The scale of Chevron's exporting of WA jobs, its criteria for choosing which activities go to India that ignore local content requirements, and its forcing of engineering contractors to follow suit have all been made public.
The previously confidential local content provisions for Wheatstone have been tabled in Parliament.
WA Premier Roger Cook has told Chevron it must adhere to the commitments it agreed to in exchange for permission to construct two LNG plants in WA.