Chevron has started a redundancy wave in Western Australia as part of transition plans for its Gorgon and Wheatstone LNG projects.

The oil giant made a few jobs redundant yesterday and a steady flow of redundancies is expected over the next 12-18 months.

A review into future job requirements remains underway. While the Gorgon project is mostly built, there could be surprises in store for Wheatstone workers with this project only 57% complete as of last month.

While analysts were already expecting Wheatstone to have lower development costs than other Australian LNG projects due to the weakness in the Aussie dollar this year, the oil price downturn has also lowered costs across the industry as contractors compete for less work.

“We have been getting ready for LNG production for a number of years now,” Chevron said in relation to the redundancy news.

“As expected, the demands of our organisation will change as we move from investing in major capital projects to operations. This is the natural evolution of our business as we ramp up to build major capital projects and ramp down to become an efficient operator.

“As we transition the business over the next several years, we are undertaking a review to have the right skills and competencies in place to meet our future operations requirements. This will result in contracts ending and a number of redundancies.”

While there are no official estimates on how many redundancies will occur, there is speculation that Chevron will cut around 2000 jobs by the time Wheatstone is well into steady LNG production in 2017.

Chevron’s transition into operational phases is creating other employment opportunities.

“We are currently recruiting and training operations personnel to work on Gorgon and Wheatstone,” a Chevron spokesperson said.

The $US54 billion ($A67.6 billion) Gorgon project is targeting 15.6 million tonnes per annum of LNG capacity and will also have a 300 terajoule per day domestic gas plant to supply Western Australia’s domestic market.

The Gorgon joint venture comprises Chevron (47.3%) ExxonMobil (25%), Royal Dutch Shell (25%) and Osaka Gas, Tokyo Gas and Chubu Electric Power, which each have a holding of less than 2%.

The $29 billion Wheatstone project is targeting 8.9Mtpa with first exports in 2016 with Woodside recently closing a deal to acquire Apache’s 13% stake of this Chevron-operated project (64.14%).

Source: www.energynewsbulletin.net

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