WA Premier Roger Cook's core "Made in WA" election policy will be tested by his use of local content provisions to keep Chevron's WA engineers working in WA.
Chevron's jobs to India plan to face WA government scrutiny
WA Premier Roger Cook's core "Made in WA" election policy will be tested by his use of local content provisions to keep Chevron's WA engineers working in WA.
Due to legislated local content provisions, Chevron has to demonstrate to the WA government that it is impractical to keep performing engineering in Australia before it proceeds with moving many roles from Perth to India.
Chevron's plan is an early test of whether WA Premier Roger Cook, who is the responsible minister for Chevron's agreements with the state, can deliver on the "Made in WA" slogan that dominated his recent successful re-election campaign.
The US oil and gas giant is spending $US1 billion ($1.6 billion) to have 600 engineering and other professionals working in India by the end of 2025 to "support projects across Chevron’s enterprise."
In February, Chevron announced it would cut its global workforce by 15 to 20 per cent by 2026, aiming to slash its annual operating costs by up to $US3 billion ($4.7 billion).
Chevron employs 2000 people to operate its Gorgon and Wheatstone gas projects in WA, according to its recent annual filing to corporate regulator ASIC.
If Australia suffers the same headcount cut as the global operation, between 300 and 400 local workers will lose their jobs.
A Chevron Australia spokeswoman said the cost savings would come from optimising its portfolio, using technology to increase productivity, and changing how and where work is performed.
She said the new centre in India would provide engineering and artificial intelligence solutions to its global operations, including Australia.
“We’re working through what changes will be required for our Australian operations," she said.
"We will communicate further with our people when decisions have been made."
Boiling Cold understands the communication has already started. Its Perth-based engineers were told earlier this year that some of their roles would be moved to the Engineering and Innovation Excellence Center (ENGINE) in Bengaluru
However, the Barrow Island Bill 2003, which allowed Chevron to build its Gorgon gas export plant on the secluded nature reserve, has provisions to protect local content.
Chevron must "use labour available within WA" except where it can demonstrate "it is not reasonable and economically practicable to do so," according to Schedule 1, Section 15(1)(a) of the Act.
As the work is already done in Australia, it could be difficult for Chevron to argue it is unreasonable for that to continue.
In 2024, Chevron made a profit of $US5.2billion ($8.1 billion) in Australia from revenue of $US11.2 billion (17.7 billion): about $2 million an hour.
If 100 Australian engineering jobs moved to India saving $200,000 a role, the total saving of $20 million a year is equal to ten hours of revenue.
If the work is not performed in WA, the Act requires it to be done in Australia, and only if that "is not reasonable and economically practicable" can the work be done overseas.
Another clause in the Barrow Island Act applies similar local contact provisions to Chevron's use of consultants and suppliers.
Chevron's other WA gas export project, Wheastone, is governed by a confidential State Development Agreement that has local content provisions, but the details are not publicly available.
A spokeswoman for Premier Roger Cook said the US company had informed it of its plan to cut jobs globally and move some engineering roles to India.
"The State Government expects Chevron will continue to fulfil its obligations, including local content provisions, as stipulated in its relevant State Development Agreements," she said.
"Creating local jobs is a priority for the State Government as demonstrated through our Made in WA Plan,
"We expect large resource projects to employ Western Australians and use local businesses.”
The Chevron spokeswoman said since 2009, the company and its joint venture partners have spent more than $80 billion in Australia on the Gorgon and Wheatstone natural gas facilities.
"Around 90 per cent of our annual operating expenditure is spent in Australia," she said.
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016 I have written for The West Australian, The Saturday Paper, RenewEconomy, Michael West, Boiling Cold and WAtoday.
Peter Milne
