The Christmas Day edition of the Sunday Times carried an article revealing that Chevron was having trouble identifying the $3billion in contracts it says it will award to local businesses during the construction of its $29billion Wheatstone project.  Read the article here.

While the article doesn’t talk about where the remaining $26billion will be spent, we do know that all of the steel fabrication contracts announced so far for Wheatstone will be sourced offshore.  And, by this measure, Chevron is delivering even fewer benefits locally with Wheatstone, than it did with its Gorgon project, which is currently under construction on Barrow Island.

Chevron sourced more than 90 per cent of the 300,000 tonnes of fabricated steel for Gorgon offshore.   To date, Wheatstone has awarded contracts for more than 150,000 tonnes of fabricated steel – with 100 per cent of this skilled work going offshore.

This offshored work has included:

• Offshore platform – 57,000 tonnes – awarded to Daewoo Shipbuilding, South Korea
• Onshore LNG processing modules (outer battery limits) – 42,000 tonnes – awarded to Bohia Oil Marine Engineering and Supply, China
• Onshore LNG processing modules (inner battery limits) – 60,000 tonnes – awarded to Kencana, Malaysia

Every contract our major resources companies deliver locally is a positive outcome, but when we are assessing the benefits projects deliver to WA, we have to ensure we are winning skilled work.  While the earthworks, logistics, tunnel digging, travel and accommodation contracts Chevron is awarding locally create jobs now now, they do not provide apprenticeships or develop the capacity of local industry to create jobs that will last beyond the resources boom.

Our campaign has consistently called for stronger State Government action to secure more skilled local work from Gorgon, Wheatstone and other major resources projects.  Over this past year, the Barnett Government has taken some steps in the right direction and Mr Barnett had promised he would include tougher local content provisions in a State Agreement he would bring to Parliament for Wheatstone.

Mr Barnett had said he would introduce the State Agreement into Parliament this year, but the Bill made no appearance, meaning the vast majority of steel fabrication contracts, as well as other procurement contracts, will be awarded by Chevron before the WA community gets a chance to scrutinise the deal Mr Barnett has done with Chevron.

While the State Government continues to issue media releases talking up the local benefits Wheatstone is delivering, the truth is, we are still going backwards.  Figures released by the ABS over the last month revealed the number of manufacturing jobs in and around Kwinana fell from 14,000 to 12,000 over the last year and youth unemployment in the area has gone past 25 per cent.

The problems in the manufacturing sector are being masked by the large number of jobs being created while projects like Gorgon and Wheatstone are being built.  However, on the State Government’s own numbers, these two projects will require 12,000 people to build them and only 700 people to operate them.

The question for Mr Barnett is, once Gorgon and Wheatstone are built, what will all the people who build the projects do for work, if our manufacturing jobs have all gone offshore in the meantime?  And what will the broader impact on the WA economy be once all these construction workers are without work?”