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Union rejects sixth refinery offer from Shell, talks recess

Workers from the United Steelworkers (USW) union walk a picket line outside the Lyondell-Basell refinery in Houston, Texas February 1, 2015. REUTERS/Richard Carson

By Erwin Seba

HOUSTON (Reuters) - Union leaders on Thursday rejected the sixth contract offer Royal Dutch Shell Plc (RDSa.L) made to U.S. refinery workers and a pause in negotiations was called on the fifth day of a strike, though talks are expected to resume.

The United Steelworkers union (USW), which represents workers at 63 U.S. refineries and chemical plants, had recommended locals reject the proposal, which was floated after the first big walkouts since 1980 were called.

Shell, whose U.S. unit leads negotiations for oil companies, did not provide immediate comment after the rejection.

About 4,000 workers at nine plants, including seven refineries accounting for 10 percent of U.S. refining capacity, have been on picket lines since Sunday in California, Kentucky and Texas.

The walkouts are in support of a nationwide pact that would cover 30,000 workers. Companies have called in trained non-union workers to keep plants running almost as normal.

"The USW has rejected the 6th offer from Shell," a union official said. The union also said talks were in recess, pending an information request, and would resume at some point.

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

The two camps have been in a stalemate since the USW called the strikes, saying Shell had left the negotiating table when talks broke down.

Negotiations have been tougher than in years past. A drop of more than 50 percent in oil prices since June has eroded profits at major oil companies, prompting executives to say they cannot afford to lift wages for workers.

The USW may order further walkouts at some of the other refineries and chemical plants it represents if there is no progress in the talks, the union has said.

On Wednesday, two refineries affected by the strike, Tesoro Corp's (TSO.N) Los Angeles-area refinery in Carson, California, and Marathon Petroleum Corp's (MPC.N) Galveston Bay Refinery in Texas City, Texas, reported leaks to regulators.

Strikes could complicate the ability of the companies to carry out maintenance work after the upsets, analysts say.

(Writing by Terry Wade; Alden Bentley and David Gregorio)