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Shell and union extend contract talks

ROYAL Dutch Shell Plc and the union representing refinery workers extended talks on a new contract for at least 24 hours, delaying a possible strike that may affect almost two-thirds of its United States' capacity.

The groups made "sufficient progress" during talks on Saturday, Lynne Baker, a United Steelworkers spokeswoman, said in a telephone interview. "When you go to rolling 24-hour extensions, it appears they want to reach a settlement, which will keep the union working without disrupting refinery operations," said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

The negotiations cover workers at 86 plants representing about 64 percent of US refining capacity, including operations owned by Exxon Mobil Corp, Valero Energy Corp, BP Plc and Chevron Corp as well as Shell. Gasoline futures prices soared almost 10 percent last week on concern over a walkout. "The USW has agreed to extend the existing contract given that negotiations continue to be productive and progress is being made," Stan Mays, a Shell spokesman, said in an e-mail. "Shell is committed to resolving the remaining issues at the negotiating table. We are optimistic that a mutually satisfactory agreement can be reached with the USW."

On January 30 the union rejected Shell's third offer, which included giving workers a three-year contract with a US$500 signing bonus and 2.5 percent wage increases in the second and third years, according to a January 28 memo distributed by the union, Bloomberg News reported. Employees would receive a 75 cent-an-hour increase in the first year.

No fourth offer was made, Baker said. Members authorized a strike in October.

The contract expired at 12:01am yesterday.

The last national refinery strike happened in 1980 with the walkout lasting for about three months. Union workers received a 23 percent raise in pay and benefits over two years.


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