Because winding down requires up to three days, the first shutdowns would have to take effect on Tuesday at the company's two main refineries and one petrochemical plant in southern Kaohsiung, executives said.

Direct negotiations with the oil workers' Union would continue through the week even as the shutdowns were being widened in hopes of reaching a settlement before operations ground to a complete halt, executives said.

"We still have not given up on negotiations. We still hope the strike will not take place," Chinese petroleum vice president Fang Yi-shan said at a news conference.

Fang said there would be no impact on consumers of gasoline and other retail oil products, but said a shutdown would affect downstream industrial customers who rely on a steady supply of petrochemical feedstocks,especially ethylene.

Executives said Chinese Petroleum had reserves of gasoline and other major petroleum products that could last for a month and said the one-day strike -- should it take place -- would not require any halt to unloading of crude oil supplies.

Just as it takes three days to bring down petrochemical production lines, restarting them also takes about three days, meaning a one-day strike would disrupt operations for a week.

Executives said an ethylene production shutdown alone would cost up to US$1 million a day in lost revenues.

Local media have estimated a full shutdown would cost several billion Taiwan dollars in losses to Chinese Petroleum and its downstream customers.

Union leaders met on Monday morning and then announced they had no plans to back down from the threatened strike, which hinges mainly on a dispute over holiday overtime pay.

Chinese Petroleum has sought to reduce holiday overtime pay to the standard level required by Taiwan's labour law -- 100 per cent of aworker's salary. The firm traditionally has paid 200 per cent for some but not all holidays.

Chinese Petroleum said it already had compromised, offering to keep the 200 per cent overtime level in some cases but paying part in cash and part in time off.

The union has rejected any reduction in compensation.

The economics ministry, which supervises Chinese Petroleum and other state-owned enterprises, has endorsed the labour law standard -- wary that workers at other state firms might demand pay parity with Chinese Petroleum's generous compensation.

Chinese Petroleum's workforce is expected to come under further pressure in the coming two years as the state breaks the company's petroleum monopoly and pursues privatisation, both of which will require cost-cutting and streamlining.

Would-be rival Formosa Plastics group has completed the first phases of a US$9.7 billion petrochemical complex in southern Yunlin county and is widely expected to challenge Chinese Petroleum in the retail gasolinemarket.

Chinese Petroleum's three Kaohsiung plants threatened by the strike employ about 5,000 workers -- of which 95 per cent would strike, according to union leaders.

Two of the affected plants are refining units with daily capacity of 2,70,000 and 3,00,000 barrels per day. The third is a petrochemical complex.

Chinese Petroleum's refinery at northern Taoyuan, which makes jet fuel for Taiwan's main international airport, would not be affected by the Kaohsiung work stoppage.