[StBernard] Exxon, Valero Receive Union Strike Notices for Refineries

[Westley Annis]

Exxon, Valero Receive Union Strike Notices for Refineries

By Barbara J Powell - Jan 31, 2012 3:41 PM CT

Exxon Mobil Corp. (XOM) and Valero Energy Corp. (VLO) received notices from
the United Steelworkers union of its intent to strike at refineries in
Montana and Texas if a national labor contract expires tonight without an
agreement.

The 24-hour notices were for Exxon's Billings, Montana, plant and Valero's
Port Arthur, Texas, refinery, according to the companies.

USW negotiators and Royal Dutch Shell Plc (RDSA), bargaining in Austin,
Texas, on behalf of the companies, have failed to reach agreement on a new
three-year contract after 14 days of talks. The national contract expires at
midnight Houston time.

Valero will continue to operate its Port Arthur refinery in the event of a
work stoppage, while closing its Memphis refinery, Chief Executive Officer
Bill Kleese said today on a conference call with analysts and investors. He
confirmed the Port Arthur notice today at the same time.

Rachel Moore, an Exxon spokeswoman in Fairfax, Virginia, confirmed the
strike notice for Billings in an e-mail. Exxon's labor agreements with the
USW also expire tonight at its refineries in Beaumont, Texas; Torrance,
California; and Chalmette, Louisiana.
Deadline Nears

As the deadline nears for contracts covering 30,000 workers at 69
refineries, companies are deciding whether to shut refineries or operate
them with nonunion workers if the union should declare a general strike.
During negotiations three years ago, both sides agreed to three, 24-hour
rolling extensions of the contract before a deal was finally worked out.

LyondellBasell NV (LYB) will continue to run its Houston refinery if there's
a strike, David Harpole, a spokesman for the company in Houston, said in an
e-mail.

"We remain optimistic that a mutually satisfactory agreement can be
reached," he said. "Trained personnel will be in place at the refinery and
ready to assume operations if necessary."

BP Plc (BP/) said in a statement that it would cut output at its Whiting,
Indiana, plant to "a level that maintains safe winter operations." The
company said it wouldn't hire replacement workers because "that would
disrupt the progress BP has made with the USW in continuing to improve
safety and operational performance."

The USW is seeking higher wages, stronger protections for health and safety
and a safety officer assigned to each facility. Shell has offered wage
increases, changes to contract language related to health and safety
practices, while not agreeing to have a safety process person at each plant,
union sources familiar with the negotiations have said.