Shell share price: Workers reject contract offer as US refinery strike continues

Royal Dutch Shell Plc (LON:RDSA) had its seventh collective labour contract proposal rejected by leaders of The United Steelworkers union (USW) last night. The proposal was snubbed on grounds of safety concerns as the union instructed additional units to prepare to join the largest US refinery strike since 1980.

The contract proposal from Shell, which is acting as lead negotiator on behalf of oil companies including Chevron Corp. and Exxon Mobil Corp, was the first one made by the Anglo-Dutch group since 05 February. The USW, however, said in a text message reported across the media, that the offer “fails to improve safety in enforceable way […] All units instructed to reject and prepare to join (unfair labor practices) strike if called upon. Union at table ready to bargain.”

Ray Fisher, a spokesman for the FTSE 100-listed oil major, said the company had no comment beyond saying the two sides met. According to Fisher:
“We continue to be focused on reaching a mutually satisfactory agreement […] We remain committed to maintaining safe operations as part of the normal course of business. Out of respect for the bargaining process, we are unable to comment further on today’s activities.”

The debate over safety issues in the sector continues after an explosion at Exxon Mobil’s refinery in Torrance, California injured four contract workers yesterday. According to the union, the accident showed the urgency of the strike’s goal to negotiate safer working conditions.
The first large scale refinery strike in the US since 1980 has already lasted for nineteen days, with over 5,000 workers at 11 plants, including nine refineries accounting for 13 percent of US production capacity, taking part in the protest. Should the USW and all of its 30,000 members enter a full strike mode, 64 percent of US fuel output could be disrupted.
As of 12:56 GMT today, Shell shares were trading 0.26 percent up on the day at 2,124.50p. According to CNN Money, the consensus forecast amongst 37 polled investment analysts covering Royal Dutch Shell has it that investors should buy shares in the company.
As of 13:48 GMT, Friday, 20 February, Royal Dutch Shell Plc ‘A’ share price is 2,113.50p.