Exclusive: Exxon wants five-year Beaumont pact to avert strikes during buildout - sources

Thu Feb 12, 2015 3:31pm EST
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By Erwin Seba

HOUSTON (Reuters) - Exxon Mobil Corp's (XOM.N: Quote) push to persuade workers at its Beaumont, Texas refinery to sign a five-year contract, nearly twice as long as the last one, is part of an effort to avert labor stoppages during a possible expansion that could make it the largest such plant in the United States, sources familiar with refinery operations said.

In a bid to win support, the company has offered a $4,500 bonus to hourly workers represented by the United Steelworkers union, which normally only signs three-year deals in the refining industry, the sources said.

A longer-term contract, the sources said, would allow the company to avert walkouts if it decides to proceed with a building project that would take until 2020 to complete. It might also weaken the local's hand in future talks, they added.

As Reuters reported in July, before crude prices plunged, Exxon is evaluating a multibillion-dollar expansion to lift the refinery’s processing capacity to between 500,000 and 800,000 barrels per day from 344,600 bpd now.

The centerpiece of the plan, which would bolster the U.S. Gulf Coast's position as a top global supplier of gasoline and diesel, would be the addition of a third crude distillation unit.

"They’re talking about spending all this money for an expansion at Beaumont," said one of the sources. "They don’t want the opportunity for a strike."

A spokesman for Exxon, which often tells investors it takes a long-term view in a cyclical business, said stability is the goal of the five-year contract.

"Beaumont is negotiating with (USW) Local 13-243 to pursue a longer-term, off-pattern contract that will provide enhanced stability," said Exxon spokesman Todd Spitler. "We believe a long-term agreement will maintain Exxon Mobil's ability to compete in a range of economic conditions."   Continued...

A Exxon Mobil gas station is seen in Encinitas, California in this file photo taken on October 28, 2014.  REUTERS/Mike Blake