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French strike keeps a third of oil refining sector shut

General view of the French oil giant Total refinery of Grandpuits, southeast of Paris, October 13, 2010. REUTERS/Charles Platiau
General view of the French oil giant Total refinery of Grandpuits, southeast of Paris, October 13, 2010. REUTERS/Charles Platiau

By Gus Trompiz

PARIS (Reuters) - A strike at three of Total's five oil refineries in France held firm for an 11th day on Monday, but the risk of a repeat of fuel shortages seen during a 2010 walkout receded after staff at a fourth plant returned to work on Sunday.

The strikers, led by the CGT union, demand an improved pay offer from Total but the company has refused to reopen talks after other unions approved a deal this month.

CGT officials said votes by shift workers approved the continuation of the strike at the Gonfreville refinery in Normandy, La Mede in the south and Feyzin near Lyon.

"Our position is still the same. The fact we're just before Christmas has made our determination even greater," said Christian Votte, a CGT official at Gonfreville, the largest of the striking sites.

The three plants together represent just over a third of France's oil refining capacity and provide gasoline and diesel fuel for motorists. The end of the strike at Donges in western France, meant the share of closed capacity had fallen from just over half.

Total said the strike was not threatening fuel supply, echoing comments made by France's oil industry lobby UFIP that last week played down comparisons with the 2010 refinery strike which led to shortages at pumps.

"The current situation is not creating any major difficulty in fuel supply. All necessary measures have been taken to ensure deliveries during the holiday period," a spokeswoman said.

UFIP said on Friday that oil imports and use of depot stocks were preventing supply tensions from developing.

OIL MARKET IMPACT

The CGT has rejected Total's offer of an annual pay rise of up to 1.5 percent, an increase the company says can amount to as much as 3.5 percent including seniority and performance factors.

The CGT wants a minimum 100-euro-a-month rise for all refinery workers as well as a 1,500 euros bonus.

The Gonfreville refinery has a capacity of 247,000 barrels per day (bpd), La Mede 153,000 bpd and Feyzin 109,000 bpd, according to figures published by Total on its website.

The Donges plant, where preparations to restart production were under way, has a 219,000 bpd capacity.

France's three refineries not belonging to Total functioned normally.

While Europe's depressed refining sector had spare capacity to make up for the idled French plants, any extended strike could push wholesale European fuel prices higher, traders said.

"If the strikes continue then the other European refineries are likely to run a bit harder," Oliver Jakob, analyst at Switzerland-based Petromatrix, said.

"But the U.S. will also contribute to replace the lost product output from the French refineries."

(Reporting by Gus Trompiz, additional reporting by Ron Bousso; editing by Sybille de La Hamaide and William Hardy)

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