The WA government will soon decide whether Black Mountain Energy can frack 20 wells near the Kimberley's Fitzroy River, but promised measures to protect the environment and the rights of local people are not yet in place.
Alcoa chief executive Bill Oplinger told Wall Street the US aluminium specialist could take strong action to boost profits from alumina, most of which it refines in Western Australia.
South West WA's power grid reached a record 91 per cent peak renewable energy share in December - driven by 1,225 MW of new battery storage - while wholesale power prices fell 13 per cent and carbon emissions dropped 15 per cent as coal and gas generation declined.
The US giant, which made $8 billion in Australia in 2024, is forcing its subcontractors to follow its example and send 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.
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:
Peter Milne
Peter Milne
Since the first story:
The WA government will soon decide whether Black Mountain Energy can frack 20 wells near the Kimberley's Fitzroy River, but promised measures to protect the environment and the rights of local people are not yet in place.
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An independent review found Black Mountain conducted a "limited and disjointed" assessment that came to "largely unsupported" conclusions.
Pilot Energy is a going concern, but its accounts report "a material uncertainty which may cast significant doubt" on that continuing.
All the info and a bit of comment on WA energy, industry and climate every Friday
