(Adds comments from both sides)
By Erwin Seba
HOUSTON, Feb 3 (Reuters) - Negotiations were gettingunderway late on Tuesday between Royal Dutch Shell Plc and union leaders over a new wage contract for U.S. refineryworkers who have been on strike for three days, both sides said.
The two camps have been at an impasse since the union calledwalkouts early on Sunday for the first time since 1980 at nineplants with about 10 percent of U.S. refining capacity, sayingShell left the negotiating table when talks broke down.
The meeting on Tuesday evening is being held as both sidesuse increasingly strident language to talk about the dispute,ramping up their rhetoric in private and public.
Executives have made clear they will try to hold firm,saying they cannot afford to lift wages because crude priceshave sunk 50 percent since June, eroding their profits.
Other executives have suggested Shell, acting as the leadnegotiator for oil companies, gave away too much in negotiationsheld in years past.
Meanwhile, the USW has said further walkouts may be orderedat some of the other 63 refineries and chemical plants itrepresents if progress is not made.
"Shell and USW are meeting Tuesday evening to continuecontract negotiations in hopes of coming to a satisfactoryagreement for both parties," company spokesman Ray Fisher said.
Shell has declined to comment on the details of the talks.
Late on Monday, Shell reopened communication with the UnitedSteelworkers union (USW) though the union said no progress wasmade.
Since bargaining first started on Jan. 21, the union hasrejected five offers from Shell.
The union is seeking annual pay increases of 6 percent,double the size of those in the last agreement. It also wantswork that has been given in the past to non-union contractors tostart going to USW members, a tighter policy to preventworkplace fatigue and reductions in members' out-of-pocketpayments for healthcare.
The strikes were the first ordered in 35 years in support ofa nationwide pact that would cover 30,000 workers.
Most affected refineries are running near normal, withoperators having called on trained managers, retirees andoperators from non-union plants to replace workers.
But one plant, Tesoro Corp's 166,000 barrel-per-dayMartinez, California, refinery, was being fully shut down aspart of it was already in the middle of maintenance work, thecompany has said.
While refiners are promising little or no disruption toproduction, wholesalers and other buyers have snapped upsupplies.
Traders have said the strike contributed to higher pricesfor gasoline futures, which were around $1.60 a gallonlate on Tuesday.
Refinery outages can reduce purchases of crude, and U.S. oilprices slipped 2 percent to below $51.90 after a stringof sharp gains. (Writing by Terry Wade; Additional reporting by JessicaResnick-Ault; Editing by Alden Bentley, Bernard Orr)
