By Erwin Seba
HOUSTON (Reuters) -Negotiators for the United Steelworkers union (USW) and U.S. oil and chemical companies late Monday agreed to continue talks on a new contract after a strike deadline passed, according to a message sent to workers and viewed by Reuters.
The two sides temporarily halted negotiations ahead of the midnight deadline but plan to continue discussion on Tuesday. They agreed to a 24-hour rolling extension to give negotiators time to reach a final agreement, the USW message to workers said. That means the existing labor contract remains in place with a 24-hour notice required to end it.
The union rejected a 9% pay raise over three years, the message said. The USW represents about 30,000 oil industry workers, many of whose contracts were due to expire shortly after 12 a.m. (0600 GMT) on Tuesday.
Marathon Petroleum Corp (NYSE:MPC)., which is the lead negotiator for oil refiners, pipeline and chemical companies, did not immediately respond to a request for comment after normal business hours on Monday.
The talks have progressed slowly over the past 2-1/2 weeks but had made enough progress that both sides agreed to continue after the strike deadline, people familiar with the matter said. Company negotiators several times raised their pay offer to workers, the sources said.
The last nationwide strike by oil workers was in 2015.
At least four offers were exchanged on Monday, with the latest being a 9% pay raise over the three years of the proposed contract. The first pay offer, made last week, was for 3% over three years, the USW told members in a message last week.
Marathon has said it is committed to negotiating in good faith with the USW to produce a mutually satisfactory agreement.
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.