Shell makes sixth offer to U.S. oil workers amid strike

February 05, 2015 | Company Operations, Employment, United States & Canada

Houston, Texas U.S | – Royal Dutch Shell Plc made a sixth contract offer to the United Steelworkers union on behalf of oil companies amid the biggest U.S. refinery strike since 1980.

Shell, representing several oil companies in bargaining, made the offer to the USW during negotiations Wednesday and the union will respond Thursday, Lynne Hancock, a USW spokeswoman, said by e-mail. Talks continued Wednesday, Shell said in a statement. The union, representing employees at more than 200 refineries, terminals, pipelines and chemical plants, began a strike at nine sites Sunday after talks with Shell broke down.

The plants on strike account for 10 percent of U.S. refinery capacity. One site is shutting and a full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel output. Union leaders haven’t called a strike nationally since 1980, when a stoppage lasted three months. Shell and union officials began negotiations on Jan. 21 amid the biggest collapse in oil prices since 2008.

The union has already rejected five national contract offers made by Shell on behalf of companies including Exxon Mobil Corp. and Chevron Corp. The USW has been asking employers for better health-care benefits and measures to prevent fatigue and keep union workers rather than contract employees on the job.

10 Percent

The refineries on strike can produce 1.82 million barrels of fuel a day, data compiled by Bloomberg show. They span the U.S., from Tesoro’s plants in Martinez and Carson, California; and Anacortes, Washington, to Marathon Petroleum Corp.’s Catlettsburg complex in Kentucky to three sites in Texas, according to the USW’s statement.

In Texas, Shell’s Deer Park complex, Marathon’s Galveston Bay plant and LyondellBasell Industries NV’s Houston facility are affected, according to the union.

U.S. benchmark West Texas Intermediate oil added 85 cents to $49.30 a barrel in electronic trading on the New York Mercantile Exchange at 10:02 a.m. London time. Gasoline for March delivery gained 3.39 cents to $1.5156 a gallon.

Lyondell, Marathon, Shell and Tesoro have said they have contingency plans in place to keep refineries operating. The walkout also includes Marathon’s Houston Green cogeneration plant in Texas and Shell’s Deer Park chemical plant.

Shut Plant

Tesoro said Wednesday that it was shutting process units at the Golden Eagle refinery near Martinez, California, since half of its capacity was already offline for maintenance. The plant will be fully down by early Friday, when workers there plan to form their picket line, three people familiar with the schedule said, asking not to be identified because the information isn’t public.

Tesoro requested a meeting on Thursday in front of a federal mediator with USW local contract negotiators representing workers at Carson, Dave Campbell, secretary-treasurer of the USW local representing the company’s Carson and Wilmington refineries, said on Wednesday. The request follows a complaint that the USW filed against the company on Tuesday with the National Labour Relations Board, saying it has failed to bargain with workers there, he said.

The remaining USW-represented sites not on strike are operating under rolling, 24-hour contract extensions, according to the union.