Shell, union in deal to end refinery strike

AMSTERDAM - Oil major Shell and trade unions have reached a deal to end a strike over pensions that has hit production at Europe's biggest refinery, a union spokesman says.

"We have a deal," FNV union spokesman Egbert Schellenberg said after almost three days of strikes that forced the company to scale down production in its Pernis refinery near Rotterdam by around 50 per cent, threatening fuel supplies in Europe.

"We have to confirm the text of the agreement, afterwards we will ask the strikers to end the strike." Production at Pernis would resume by the end of the day, Schellenberg said.

"Shell has met the demands of the unions to offer workers the opportunity to retire at around 60," Evert Jan van de Mheen, negotiator from the CNV union, said in a statement, adding that in return workers would start paying towards their pension.

Workers launched their protest on Monday evening after management let an ultimatum to reach a deal pass.

More strikes had been due to begin on Thursday afternoon at Shell's joint venture gas production NAM - the biggest Dutch gas producer and a 50-50 Shell/ExxonMobil joint venture - in Den Helder and at NAM gas cleaning site in Emmen.

"We reached a deal five minutes before 4pm and I reached my colleague on the phone to cancel the strike there," the FNV spokesman said.

A row over pensions and changes in early retirement sparked the strike at Pernis, the first by Shell workers in the Netherlands since 1979. Shell had said the refinery would be completely shut down in a week if the strike had continued.

Shell had wanted to raise the retirement age to 65 from 60 and force workers to contribute to their pensions. Unions at Pernis, which employs 600 people, had said they wanted no change to the company's present pension scheme.

Pensions have been a sticking point in recent wage negotiations in the Netherlands after the government last year abolished tax benefits for traditional early retirement schemes and tightened unemployment and work disability benefits.

The issue galvanised Dutch union members, who turned out by the hundreds of thousands last year to protest, winning concessions that still allow some workers to retire as early as 60. The standard retirement age in the Netherlands is 65.

In the current round of wage negotiations, some unions have sought to compensate for government cutbacks in wage deals.

The closure of the 418,000 barrels per day refinery has had little effect yet on European oil markets. But if the refinery had stayed shut for long, traders expected it to push down the price of crude oil which it needs to run.

Pernis is a major supplier of transport and heating fuels to Europe and exports petrol to the United States.

Production at most units in the refinery had been cut back by 50 to 80 per cent of capacity, a source among striking workers at the plant said earlier on Thursday.

The Pernis cutbacks had so far had only a limited impact on European oil markets amid heavy imports of diesel and jet from Asia and the Middle East Gulf. "It looks like the market will remain in the doldrums, short of a cold weather spell that would lift demand," a heating oil trader said.

Fuel oil traders took a similar view. "The strike had a small impact on fuel oil barges last week," a European trader said. "Now it won't affect the market at all, I think."

- REUTERS