April 29 (Bloomberg) -- Ineos Group Holdings Plc's resumed production at its Grangemouth refinery today as workers ended a two-day strike which shut a pipeline that carries 40 percent of the U.K.'s oil and disrupted fuel supplies across Scotland.

Workers at the refinery returned to work at 7 a.m. local time, Pauline Doyle, a spokeswoman for the Unite union which organized the labor action, said by phone today. The strike over pensions began April 27. A full resumption of the facility may take as much as three weeks, according to Ineos.

``The focus at the moment is to get the refinery back to full capacity as quickly and safely as possible,'' Richard Longden, a spokesman for Ineos, said in a telephone interview. ``Our estimate is between two to three weeks.''

Ineos has restored power and steam supplies from the refinery to BP Plc's neighboring Kinneil processing plant, allowing the Forties Pipeline System to resume operations. The refinery stoppage forced BP to close the link, a network that carries 700,000 barrels a day of crude from as many as 70 North Sea Fields, almost half the U.K.'s production.

Companies including ConocoPhillips, Apache Corp. and Marathon Oil said they are restoring production from fields which supply the Forties pipe today. The pipeline which will return to full capacity in ``several days,'' Joanne McDonald, a spokeswoman for BP, said earlier.

The pipeline shutdown may cost producers 50 million pounds ($99 million) a day, industry group Oil and Gas U.K. said last week.

Crude Prices

Crude oil prices in New York fell more than $3 a barrel after BP restarted the pipeline. The U.K. strike helped push prices to a record $119.93 a barrel yesterday while European diesel and jet fuel prices reached records last week in the run- up to the strike action.

Grangemouth supplies about 95 percent of the fuel used in central Scotland. The plant has refined oil for around 80 years and the last time the entire facility was shut was during World War II, according to Ineos, which bought the plant from BP in 2005.

Ineos took delivery last night of a 15-million-liter shipment of diesel and will continue to import fuel to minimize the disruption to supplies, Longden said. The closure caused fuel shortages in Scotland and Northern England.

Tanker Arrivals

Seven tankers carrying fuel will arrive this week, the Scottish Government said April 26. That will keep motorists supplied while Grangemouth returns to full production.

``There is no shortage of supply in petrol, oil or gas,'' U.K. Energy Minister Malcolm Wicks said in an interview today. ``We're getting supply from different quarters so there is no problem, but it is an economic loss to the U.K. as well as the company and we want to see the situation settled as soon as possible.''

Cargoes of Forties oil loading in May have been delayed by as much as three days by the pipeline shutdown, according to shippers of Forties oil.

The closure also cut natural gas pumped from fields that produce both oil and gas with as much as 3 billion cubic feet (85 million cubic meters) a day of gas production affected. That's equivalent to 30 percent of the U.K.'s gas demand at this time of year.

Unite may ``potentially'' call another strike if the dispute is not settled, spokeswoman Catherine Bithell said in a telephone interview today. No strike is planned at present, she said.

Union Talks

Ineos Chief Executive Jim Ratcliffe and the joint general secretaries of Unite, Tony Woodley and Derek Simpson, met in London today to negotiate a resolution to the dispute. Talks were ``constructive and meaningful,'' Ineos spokesman David East said in a telephone interview. A ``proposal'' will be considered by the company and the union in the coming days, he said.

More than 1,000 members of the Unite union stopped work in protest against changes to the pension plan that would have introduced employee contributions for the first time. The refinery was shut before the labor action started.

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Last Updated: April 29, 2008 13:09 EDT