New Attempt to End Crippling French Port Strike

Strikers at France's Fos Lavera oil hub are meeting port and Gaz de France officials on Thursday in a fresh bid to find a way out of a 16-day strike threatening fuel supplies to motorists and exports to U.S. markets.

Some refineries could start shutting down as soon as Friday if the dispute is not resolved, operators said.

Fos Lavera is the world's third-biggest port for oil products with 64.2 million tonnes moving through it annually.

The meeting will be the third attempt to try and end the strike which started on March 14 to demand that only port staff are used to hook up liquefied natural gas cargoes at a GDF terminal due to start up at the end of 2007.

The CGT union says the meeting with GDF officials is a must to enable work to resume at the strategic port.

The meeting started at 0815 GMT but it is unclear when it will end. "These meetings are totally unpredictable so we can't make any assumptions," a port spokeswoman said.

In the best case scenario, participants will agree on a draft deal, which will be submitted to a vote by workers.

Two previous attempts to resolve the row have failed and GDF has so far rejected the workers' demand, saying only its staff are qualified to do the work for safety and technical reasons.

Ships Blocked

The strike, which is now blocking 57 ships, including 33 oil tankers, could close nearly half of French refineries by next Wednesday and halt fuel supplies to millions of motorists in southeast France, France's petroleum industry body UFIP said.

"We have never seen anything like this," said UFIP head Jean-Louis Schilansky.

Refineries dependent on the hub have started to trim output and some could be forced to shut down as early as Friday.

Their full closure would slash seven percent of European refinery capacity or 1.10 million barrels per day.

As a result fuel supplies to motorists could come to a halt at the end of next week, UFIP said.

The dispute has forced Exxon and Total to cut output by a third at their Fos Lavera-dependent refineries.

British chemical firm Ineos says it plans to shut down its 207,000 bpd Lavera refinery at the start of next week.

Royal Dutch Shell has so far been sheltered from the strike as its Berre L'Etang refinery is closed for maintenance and its Reichstett plant is just restarting after a four-week turnaround and is well supplied, the company said.

The conflict is costing oil firms $500,000 per day in compensation penalties they have to pay shippers because of blocked vessels, UFIP said.

Schilansky said oil firms' loss of earnings due to the strike was now reaching one million euros ($1.34 million) a day and would double if refineries shut down.