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 Shortly after talks between union and oil company representatives
ended on Friday night, the union notified Motiva Enterprises
[MOTIV.UL] of a strike by its members at the company's 600,250
barrel per day (bpd) refinery in Port Arthur, Texas.
The USW also gave notices on Friday of strikes to begin in 24 hours
at Motiva's 235,000 bpd Convent, Louisiana and 238,000 bpd Norco,
Louisiana refineries and the Shell Oil Co chemical plant in Norco,
the union said.
"The industry’s refusal to meaningfully address safety issues
through good faith bargaining gave us no other option but to expand
our work stoppage," USW International President Leo Gerard said in a
statement.
Motiva is a 50-50 joint venture of Royal Dutch Shell Plc and Saudi
Aramco [SDABO.UL]. Shell's U.S. arm Shell Oil Co is the lead oil
company negotiator in talks with the USW for a national agreement on
safety, pay and benefits.
A Shell spokesman said the company was disappointed by the Port
Arthur walkout and strike notices to the Louisiana plants.
"We believe this move sets the wrong tone for both parties to move
forward and reach an agreement," said Shell spokesman Ray Fisher.
"We remain committed to continued safe operations and productive
negotiations."
If no agreement is reached between Shell and the USW by early Sunday
morning, a total of 6,550 workers at 15 plants, including 12
refineries accounting for 18.5 percent of U.S. production capacity,
will be walking picket lines in the largest national refinery strike
since 1980.
This is the first expansion of the strike since Feb. 6, when workers
at BP Plc-operated refineries in Indiana and Ohio were told to begin
a work stoppage the following day.
Workers are already on strike at Shell's 327,000 bpd joint-venture
refinery in Deer Park, Texas, and an adjoining chemical plant. The
Deer Park workforce walked out when the strike began on Feb. 1.
The strike may complicate operations at the Port Arthur refinery,
which failed to restore its second largest crude distillation unit
(CDU) to full production after restarting on Friday following a
three-day shutdown to fix leaking piping, sources told Reuters.
The 195,000 bpd CDU is one of three at the refinery that do the
initial refining of crude oil coming into the plant and provide
feedstock for all other production units.
The refinery's largest CDU, which has a rated capacity of 325,000
bpd is running at about 200,000 bpd, the sources said, because a
60,000 bpd hydrocracking unit is shut due to a malfunction. The
hydrocracker produces motor fuel, primarily diesel, which has become
a lucrative export for U.S. refiners.
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Motiva is also overhauling the 92,000 bpd gasoline-producing fluidic
catalytic cracking unit at the refinery. It is scheduled to restart
in the first half of March. It was shut in early January.
Shell and the union have been meeting continuously since talks
resumed on Wednesday following a week-long break for the company to
reply to an information request and a counterproposal from the USW.
Union negotiators rejected the seventh contract offer from Shell on
Thursday night.
Earlier this week, the USW's lead negotiator, International Vice
President Gary Beevers, told Reuters that safe staffing levels at
refineries and chemical plants were a sticking point in the talks.
Another sticking point is the absence of no-retrogression language,
which preserves agreements from previous contracts not addressed in
negotiations this year.
In addition to the two BP-operated plants, workers are striking at
refineries and plants owned by Lyondell Basell, Marathon Petroleum
Corp, and Tesoro Corp in California, Kentucky, Texas and Washington
state.
Only one refinery has shut down due to the strike.
Tesoro's 166,000-bpd plant in Martinez, California, was scheduled
prior to the strike for a partial shutdown to perform a planned
multi-unit overhaul. Company officials decided to idle the entire
plant after the walkout began and said production would not resume
during the work stoppage.
The USW is seeking a three-year, industrywide pact that would cover
30,000 workers at 63 U.S. refineries that together account for
two-thirds of domestic capacity.
Companies have called on temporary replacement workers to keep
plants running at nearly normal levels.
(Reporting by Erwin Seba; Editing by Nick Macfie and Clarence
Fernandez)
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