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Latest Development Regarding The USW Refinery Strike

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Screen Shot 2015-01-06 at 21.26.38By: MICHEAL KAUFMANPublished: Mar 7, 2015 at 10:04 am EST

The biggest oil refinery strike in the US in over three decades has entered its 35th day, with no agreement between the United Steelworkers (USW) union and Royal Dutch Shell plc (ADR) (NYSE:RDS.A) been reached so far.

The two parties had a meeting on Wednesday, but the talks ended without reaching a mutually acceptable agreement. Towards the end of the meeting, the two parties decided to hold talks next week. Further negotiations can start as early as March 9.

Over 6,500 oil workers, who are associated with the USW labor union, have been on a strike since February 1, as negotiations between the union and Shell were not successful in January. USW has been looking to negotiate terms with Shell over a new, three-year contract, which would apply to all of USW’s oil workers employed in the US.

The union is seeking safer working conditions as workers currently undergo fatigue, which could potentially lead to accidents on the job. USW is also for oil refiners to hire only union members for daily maintenance work, which is currently being performed by non-unionized workers.

Shell, which is representing other oil sector employers like Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM), has made seven offers to the USW since Feb 1 but no agreement has been reached yet.

The strike currently affects 15 plants in the US, including 12 refineries. The initial strike covered nine refineries but the strike was then spread to three other refineries, owned by Motiva Enterprises LLC. Motiva is a 50-50 joint venture between Shell and Saudi Aramco.

The refineries currently facing the strike can potentially disrupt as much as 20% of the total US oil refining capacity. A full-scale USW strike has the potential to affect up to 60% of US refining capacity.

In this week’s developments, some of the striking workers at Shell’s Deer Park refinery have decided to go back to work. The USW was paying striking workers much less than what they received from their employers, which could be the reason behind their decision to resume work. Nevertheless, it has flared feelings of betrayal among the workers who are still on strike.

Earlier on Friday, hundreds of striking workers held a protest outside Shell’s headquarters in Houston, which is the US subsidiary of Royal Dutch Shell. Reuters has reported that police officers moved in to guard the entrances of the headquarter building to avoid the protestors from entering. According to Reuters, the protestors moved back following police orders, before they marched toward the headquarters of LyondellBasell Industries NV (NYSE:LYB).

The two parties could meet for face-to-face negotiations as early as Monday.

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