Workers at energy giant Chevron’s (NYSE:CVX) Gorgon and Wheatstone liquefied natural gas (LNG) plants in Australia have threatened to go on a two-week strike from September 14. The news comes as the dispute over salaries and working conditions between the workers and the company has escalated.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Chevron’s Dispute with Workers
The Offshore Alliance, comprising the Australian Workers’ Union and Maritime Union of Australia, notified Chevron of strikes at the Gorgon and Wheatstone facilities starting on September 14 and continuing for two weeks. Further, there will be work stoppages of about 10 hours a day from Thursday.
The Alliance has called for a strike despite the ongoing mediation talks being hosted by the Fair Work Commission (FWC), Australia’s industrial arbitrator, since Monday.
In response to Chevron’s statement about the negotiations being “intractable,” the Alliance said on social media, “Our bargaining claims will look more and more reasonable as Chevron’s Gorgon and Wheatstone LNG exports dry up.”
The Alliance further added that Chevron will agree to its demand but not before losing a few billions of dollars, which it thinks is fine as the company has “plenty of loose change.”
Impact of a Potential Strike
The ongoing dispute between Chevron and workers has sparked volatility in natural gas markets. Australia is the world’s largest LNG exporter. A strike could cause major disruption in LNG supplies, given that Gorgon and Wheatstone account for about 7% of the global LNG supply and 47% of the domestic gas supply in Western Australia, as per data cited by the Australian Financial Review.
Given the magnitude of the impact of a strike, Chevron is having active discussions and stated that it is looking for a solution that is in the interests of both workers and the company.
Is Chevron a Good Stock to Buy?
Chevron generated solid profits last year, thanks to elevated oil and gas prices due to the Russia-Ukraine conflict. However, the company recently reported a decline in its second-quarter earnings, as energy prices have cooled down from the levels witnessed last year.
With nine Buys and four Holds, Wall Street has a Moderate Buy consensus rating on Chevron stock. The average price target of $191.92 implies 17% upside potential. Shares have declined more than 8% year-to-date.
