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.
In early September 2024, engineers at Chevron's Elizabeth Quay headquarters in Perth gathered to hear how a new engineering centre in India would affect them.
They knew change was coming.
A couple of weeks before, Chevron announced it would spend US$1 billion to establish an Engineering and Innovation Excellence Centre (ENGINE) in Bengaluru, India.
It will employ 600 professionals by the end of 2025 to "support projects across Chevron’s enterprise."
The highly experienced employees who waited to hear their future are responsible for the safe and reliable operation of the vast Gorgon and Wheatstone gas export projects, which together cost $US88 billion ($137 billion).
They are two of the company's most complex and valuable assets, requiring significant and sophisticated engineering support.
The engineers heard that engineering work from across the business unit would leave Australia:
Excerpt from Chevron Australia presentation detailing areas where it will send work to India.
To make matters worse, some engineers will have to do "parallel runs" of remotely working with a new Indian engineer for three months, who may then, in part, replace them.
The news was not well received.
Beyond the immediate concern about their jobs, many Chevron engineers who have contacted Boiling Cold also worry about the future of their profession in Australia.
Many of the tasks to go to India require less experience. They cut their teeth on this sort of work as young engineers, and they wonder how future graduates can have the same learning path.
Job move criteria show no preference for WA
Boiling Cold has obtained the breakdown of what work Chevron will send to India for one of the nine areas targeted for "transition" - engineering support for ongoing operations.
Chevron document detailing what engineering work supporting operations in Australia will go to India.
Work to go to India: “Technical delivery of activities that can be done remotely, are routine and non-urgent in nature, can be standardised, are scalable, and will produce efficiency through consolidation."
Work staying in Perth:“Safe, reliable operations. Activities that require field execution, strategic direction, prioritisation and business planning."
The criteria for what work leaves Australia show no sign of incorporating the legislated local content requirement that Chevron must follow for all work on Gorgon:
"Except in those cases where the Joint Venturers can demonstrate it is not reasonable and economically practicable so to do, use labour available within Western Australia."
As the engineering to be "transitioned" to India is currently done in Perth, it could be difficult for Chevron to demonstrate that it is not reasonable and practicable for it to remain in WA.
Chevron's 2024 profit of $US5.2 billion ($8.1 billion) in Australia may factor into any assessment about whether it is economic to keep local jobs.
Chevron was asked how its split of engineering work for supporting operations between India and Australia complied with the local content requirement.
The question was not answered.
A Chevron spokesman said the company was committed to meeting its local content obligations.
"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.
Unlike Gorgon, which is governed by the Barrow Island Act, the WA Government applied local content provisions to Wheatstone in a State Development Agreement that is not publicly available.
It has been an uncertain time for Chevron's 2000 employees in Australia.
Throughout 2024 "Project Forge" searched the Australian business unit for possible headcount reductions, only to be overtaken by a global effort announced in February to slash 15 to 20 per cent of Chevron's total workforce by 2026.
Boiling Cold undertsands within weeks Chevron's Australian employees will see a new organisation chart naming the senior managers that have survived the cull.
Soon after, a full organisation chart will reveal what roles are still required and employees will be asked to apply for three of them.
The workers are expected to hear by the end of June about their new role or be told they have been made redundant.
If the global target is applied to Australia between 300 and 400 Western Australians will lose their jobs.
That is not the end of the turmoil for the surviving engineers, who later in the year will learn if they have been displaced by the new Indian employees, adding to the 2025 redundancy tally.
Those left will not be able to relax for long, because the 600 engineers to be working in India by the end of 2025 are only the "initial recruitment wave."
I worked in oil & gas in commercial and engineering roles for 20 years. Since 2016, I have written for The West Australian, WAtoday and Boiling Cold, winning five WA Media Awards.
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