(Adds possible restart of talks, details from Shell letter)
By Erwin Seba
HOUSTON, Feb 22 (Reuters) - The largest U.S. refinery strikein 35 years entered its fourth week on Sunday as workers at 12refineries accounting for one-fifth of national productioncapacity were walking picket lines.
Sources familiar with the negotiations said talks may resumeby mid-week to end the walkout by 6,550 members of the UnitedSteelworkers union (USW) at 15 plants, including the 12refineries.
Representatives of both sides said no date has been set torestart negotiations, however.
The strike comes as U.S. workers seek more pay in astrengthening economy. Wal-Mart Stores Inc has said itsU.S. workers will get a raise to at least $9 an hour, while WestCoast port workers have reached a tentative deal for a newcontract after a months-long dispute.
The refinery work stoppage began on Feb. 1 when talks for anew three-year contract between the USW and lead oil companynegotiator Shell Oil Co broke down.
Talks were resumed but halted again after nearly reaching anagreement on Friday, said sources familiar with thenegotiations.
After the latest breakdown between the two sides,Steelworkers leaders targeted Shell, which is the U.S. arm ofRoyal Dutch Shell Plc, calling workers out at achemical plant and three refineries in the company's MotivaEnterprises joint-venture with Saudi Aramco.
The work stoppage now includes the nation's largestrefinery, Motiva's 600,250 barrel per day (bpd) Port Arthur,Texas, refinery.
USW members are also picketing at Motiva's 235,000 bpdConvent, Louisiana, and 238,000 bpd Norco, Louisiana, refineriesand the Shell chemical plant in Norco.
In a letter to striking employees at the Shell and Motivaplants, company officials said Shell has offered annual payraises of 2 percent in each of the first two years of a proposedthree-year pact and a 2.5-percent increase in the third year.
The company has also offered to study issues of workerfatigue, which has been cited as a factor in at least one fatalaccident in the past 10 years.
Shell also told striking employees the key sticking pointwas non-union contractors who perform daily maintenance. The USWwould like to see them replaced with union workers.
"Hiring flexibility is a proven way to protect our coreShell workforce and the long-term economic viability of ourworkforce," the letter said. "This strategy has served us allwell, as we have not had to conduct any layoffs in decades."
A union spokeswoman declined comment on Sunday about theletter.
The Shell letter did not address the absence of"no-retrogression" language, which keeps agreements fromprevious contracts, including several on safety, in place. Thelack of a no-retrogression clause has become a sticking point intalks, union leaders have said.
Shell spokesman Ray Fisher said no-retrogression languagehas not been a focus of the talks so far.
"The four key areas of focus in the negotiations are wages,healthcare, use of contractors and fatigue," Fisher said. "Theunion's 'no retrogression' proposal has not yet been a focusarea of our negotiations."
The USW's lead negotiator, International Vice President GaryBeevers, has told Reuters that safe staffing levels were a pointof contention in the talks.
Workers are also striking at the Shell refinery and chemicalplant in Deer Park, Texas, and at plants owned by LyondellBasell, Marathon Petroleum, and Tesoro in California, Kentucky, Texas and Washington.
Only one refinery has shut down due to the strike -Tesoro's 166,000-bpd plant in Martinez, California, which waspreviously scheduled to undergo maintenance.
The USW wants a new pact that would cover 30,000 workers at63 U.S. refineries with two-thirds of domestic capacity.
Refiners are using trained replacement workers, primarilymanagers and engineers, to keep plants running at near normalrates. (Reporting by Erwin Seba; Editing by Chizu Nomiyama, FranklinPaul and Tom Brown)
