Shell, U.S. oil workers to talk more on fourth day of refineries strike

By Erwin Seba

HOUSTON (Reuters) - Negotiations will resume on Wednesday between Royal Dutch Shell Plc (L:RDSa) and union leaders as they haggle over a new wage contract for striking U.S. refinery workers, the company said.

The two camps have been at an impasse since the United Steelworkers union (USW) called walkouts early on Sunday for the first time since 1980 at nine plants with about 10 percent of U.S. refining capacity, saying Shell left the negotiating table when talks broke down.

Most affected refineries are running near normal, with operators having called on trained managers, retirees and others from non-union plants to replace workers.

But one plant, Tesoro Corp's (N:TSO) 166,000 barrel-per-day Martinez, California, refinery, was shutting down as part of it was already undergoing maintenance work, the company has said.

Talks have been difficult as a drop of more than 50 percent in oil prices since June has eroded profits of major companies, prompting executives to say they cannot afford to lift wages for workers.

The union said talks late on Tuesday made "no progress." Shell called them "productive."

The union has said further walkouts may be ordered at some of the other 63 refineries and chemical plants it represents if advances are not made.

"Bargaining continued today, no progress to report, will resume tomorrow," read a text message the union sent to its members.

Shell sounded more positive. "Productive discussion today. Shell and USW agreed to resume talks on Wednesday," company spokesman Ray Fisher said.

The company has declined to detail the nature of the negotiations.

Since bargaining first started on Jan. 21, the union has rejected five offers from Shell.

The union is seeking annual pay increases of 6 percent, double the size of those in the last agreement. It also wants work that has been given in the past to non-union contractors to start going to USW members, a tighter policy to prevent workplace fatigue and reductions in members' out-of-pocket payments for healthcare.

The strikes were the first ordered in 35 years in support of a nationwide pact that would cover 30,000 workers.

Refiners are promising little or no disruption to production, but wholesalers and others have snapped up supplies.

Traders have said the strike contributed to higher prices for gasoline futures on Tuesday, though they were down a few cents early on Wednesday at $1.56 a gallon.

Refinery outages can reduce purchases of crude, and U.S. oil prices were down 3 percent at $51.48 after a string of big gains.