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Oil companies, union to continue talks on worker contract

By Erwin Seba

HOUSTON (Reuters) -Union and energy company negotiators met on Tuesday without reaching agreement on a new labor contract covering 30,000 U.S. workers at oil refineries, chemical plants and pipelines.

Marathon Petroleum (NYSE:MPC) and the United Steelworkers union (USW) on Monday averted a potential strike by agreeing to a 24-hour rolling extension of the existing contract a half-hour before a strike deadline.

Tuesday’s negotiations concluded with both sides agreeing to continue talks at a later date. The union on Monday rejected a 3-year deal that Marathon called its best and final offer.

The offer was a “comprehensive final settlement,” said Marathon spokesman Jamal Kheiry. Marathon is negotiating on behalf of itself, BP (NYSE:BP), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Phillips 66 (NYSE:PSX), Shell (LON:RDSa), and Valero. “We hope the union will reconsider our offer,” Kheiry said on Tuesday.

At least four offers were exchanged on Monday, with the last including a 9% pay raise over the 3-year contract, people familiar with the matter said. The first offer, made last week, called for 3% over three years, the USW told members in a message last week.

USW International President Tom Conway said on Tuesday he hoped company negotiators would recognize the risks taken by USW members who worked through the COVID-19 pandemic.

“USW members were on the front lines of the pandemic, ensuring that our nation could meet its energy needs while company executives were safely tucked away, working from home,” Conway said in a statement.

Under the extension terms, the existing labor contract remains in place with a 24-hour notice required by either side to end it. The existing 3-year contract, negotiated in 2019, provided an 11% pay increase over three years.

If a strike is called, it likely will follow the pattern of the 2015 work stoppage, which began on Feb. 1 of that year and expanded to 12 refineries, accounting for a fifth of U.S. crude oil processing capacity, and three chemical plants.

© Reuters. FILE PHOTO: A Marathon Petroleum banner outside a refinery in El Paso, Texas, U.S., October 1, 2018. REUTERS/Julio-Cesar Chavez/File Photo

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