Oil refiners, workers narrow differences in labor contract talks

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HOUSTON (Reuters) -Negotiators for the United Steelworkers union (USW) and U.S. oil and chemical companies were edging toward agreement on a new contract late Monday, people familiar with the talks said, cautioning that differences remain.

The two sides were hoping to avoid a possible strike after midnight if no agreement is reached. Union officials also could choose to extend the strike deadline if progress toward a new agreement is made, the people said.

The USW represents about 30,000 oil industry workers, many of whose contracts expire shortly after 12 a.m. (0600 GMT) on Feb. 1.

Marathon Petroleum Corp (NYSE:MPC)., which is the lead negotiator for oil refiners, pipeline and chemical companies, declined to comment on Monday.

The last nationwide strike was in 2015.

So far, the talks with Marathon have progressed slowly over 2-1/2 weeks. Company negotiators have offered increases in pay-raise proposals, the sources said.

At least three offers were exchanged on Monday, with the latest being a 7.5% pay raise over three years, the people said. The first pay offer, made last week, was for 3% over three years, the USW told members in a message last week.

Marathon has previously said it is committed to negotiating in good faith with the USW to produce a mutually satisfactory agreement.

Union officials did not reply to requests for comment on Monday.

The current contract, negotiated in 2019, provided an 11% increase in pay for refinery workers over three years.

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

Strikes at several of the refineries continued for weeks after the nationwide strike ended in mid-March, with the longest at Marathon’s Galveston Bay Refinery in Texas City, Texas, ending in early July 2015.

During the 2015 strike, only one refinery shut down but others cut production to 50% of capacity.