Pennzoil

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Not to be confused with Benzoyl.
Pennzoil
Type Private
Genre Automotive service
Headquarters Houston, Texas, United States
Products Motor oil
Services Motor oil service
Parent Royal Dutch Shell plc
Divisions Jiffy Lube
Website www.pennzoil.com
Pennzoil Place, which served as the headquarters of Pennzoil

Pennzoil is an American oil company founded in Los Angeles, California in 1913. In 1955, it was acquired by Oil City, Pennsylvania company South Penn Oil, a former branch of Standard Oil. In 1963, South Penn Oil merged with Zapata Petroleum; the merged company took the Pennzoil name. In 1968 United Gas Corporation became part of Pennzoil.[1] (Although United Gas was a larger company, pre-merger, Pennzoil had successfully used a "leveraged buyout" strategy.) During the 1970s, the company moved its offices to Houston, Texas. In 1977 a spin-off company was formed called Pogo, which stood for Pennzoil Offshore Gas Operators.[2]

Pennzoil was headquartered in Pennzoil Place in Downtown Houston during the 1970s.[3] In 1998, the company merged with onetime rival Quaker State to form Pennzoil-Quaker State. In 2002, the Royal Dutch/Shell Group purchased Pennzoil-Quaker State to form SOPUSShell Oil Products US.

Products[edit]

Jiffy Lube in Durham, North Carolina.

The following are products offered from Pennzoil:

  • Motor Oils – Pennzoil motor oil is the mainstay of the Pennzoil brand name. As of FY 2007 Pennzoil was the number one selling motor oil in the United States, competing with Castrol, Valvoline, and Havoline.
  • Gasoline – Pennzoil sells gasoline to motorists, mostly in western Pennsylvania.
  • Jiffy Lube is a wholly owned subsidiary of Pennzoil-Quaker State Company and was purchased in 1990. The company's franchise outlets in the United States and Canada offer quick oil changes, chassis lubes and other automotive services.

Gasoline[edit]

Though not much emphasis has ever been placed on gasoline, Pennzoil does sell gas.[4] In the early parts of the company's history, the gas stations were branded as Pennzip, though they were later changed to Pennzoil. For decades, Pennzoil gas stations were mostly marketed in western Pennsylvania, western New York, northern and eastern Ohio, and northern West Virginia.

In the 1990s, Pennzoil gas experienced a bit of a revival when Pittsburgh area convenience store chain Cogo's began co-branding themselves with Pennzoil. The co-branding only lasted a few years, and Cogo's switched brands to BP and Exxon in 2001.

After Shell's purchase of Pennzoil, there was the possibility that the remaining Pennzoil stations—mostly in western PA—would be converted to Shell as part of the company's aggressive movement to expand nationally. This hasn't happened, but the three company-owned Pennzoil gas stations in the New Castle, Pennsylvania area began co-branding themselves with 7-Eleven in 2003, with more emphasis placed on the 7-Eleven brand name than Pennzoil itself.

As of June 2009, only one Pennzoil/7-Eleven combination remains, as another converted to BP in 2006 while retaining 7-Eleven (a Pennzoil in Ambridge, Pennsylvania also converted to BP at the same time). On June 8, 2009, the other Pennzoil/7-Eleven was sold to private owners and became an independent, unbranded location. There is also a surviving Pennzoil station in Ashtabula, Ohio right off of Ohio State Route 11.

Motorsport[edit]

USAC National Championship drivers Al Unser and Johnny Rutherford were sponsored by Pennzoil in the Chaparral team. Rutherford won the Indianapolis 500 and the championship in 1980. From 1983 to 1990, Pennzoil sponsored the Team Penske driver Rick Mears during his CART World Series campaign, winning the 1984 and 1988 Indianapolis 500. IndyCar Series driver Sam Hornish Jr. drove for Pennzoil-sponsored Panther Racing from 2001 to 2003. Since 2011, Team Penske driver Hélio Castroneves hast been sponsored part-time by Pennzoil, most notably at the Indianapolis 500. Pennzoil's yellow car livery has been nicknamed the "Yellow Submarine".

In the NASCAR Cup Series, Dale Earnhardt, Inc. had Pennzoil sponsorship for Steve Park from 1998 to 2003. Richard Childress Racing driver Kevin Harvick had Pennzoil sponsorship from 2007 to 2010. Penske Racing took over Pennzoil sponsorship in 2011 with Kurt Busch. In 2012 it was moved to A. J. Allmendinger and in 2013 to Joey Logano.

Pennzoil is a title sponsor of the Grand Prix of Houston since 2013.

Controversy[edit]

Controversy arose in November 2003 following an investigation by NBC when it was discovered via the use of hidden camera that certain Jiffy Lube service stations were charging motorists for work they had in fact not performed. 5 out of 9 shops did not do the work that was told to customers.[5]

Texaco, Inc. v. Pennzoil, Co.[edit]

In 1984, Pennzoil made an informal but binding contract with Getty Oil to purchase the company. The Texaco oil company encroached on the deal in an attempt to acquire Getty for itself.[6]

Pennzoil sued Texaco in Texas state court, alleging that Texaco tortiously induced Getty to breach the contract with Pennzoil. At first it was adjudicated by Judge Anthony J.P. Farris; it was finished by visiting Judge Solomon (Sol) Casseb of San Antonio. A jury awarded Pennzoil, represented by Joe Jamail and Baine Kerr, $7.53 billion in compensatory damages and $3 billion in punitive damages. Under Texas law, Pennzoil could secure a lien on all of Texaco's property in the state, unless Texaco posted a bond that covered the judgment, interests and costs of the lawsuit (estimated to be $13 billion).[7]

Before judgment could be entered in the Texas court and Pennzoil could obtain a lein, Texaco filed a suit in the U.S. District Court for the Southern District of New York, alleging that the Texas proceedings violated Texaco's constitutional rights. The District Court found for Texaco, and the Second Circuit affirmed.[8] Pennzoil appealed the federal court case to the United States Supreme Court. Laurence H. Tribe argued for Pennzoil, whereas David Boies argued for Texaco. The Supreme Court reversed the circuit court decision, on the grounds that the New York court should have abstained interfering with the decision of a state court.[9]

Texaco also appealed the Texas state court decision. The Texas Court of Appeals upheld the jury verdict, but found that the trial court had abused its discretion by not suggesting a remittitur (reduction of damages). It would allow the verdict to stand if Pennzoil filed a remittitur of two billion dollars, making the punitive damages award $1 billion.[10] Compensatory damages of $7.53 billion remained unaffected. Pennzoil paid Mr. Jamail $335 million and Mr. Kerr $10 million for the victory.

After Texaco filed for bankruptcy, Pennzoil agreed to settle the case for $3 billion. [11]

Early History[edit]

Pennzoil Company, also called (1889–1963) South Penn Oil Co. or (1968–72) Pennzoil United, Inc., American petroleum corporation that became an important producer of crude oil and natural gas and a major marketer of automotive products before disappearing at the end of the 20th century in a series of mergers and acquisitions.

Pennzoil’s origins can be traced to two parallel oil ventures that took place in Pennsylvania in the late 19th century. One of them, the South Penn Oil Company, was founded on May 27, 1889, as an oil-producing unit of the Standard Oil Trust, which at that time owned refineries and distribution networks but no producing oil wells. As part of Standard Oil, the South Penn Oil Company, headquartered in Oil City, Pennsylvania, expanded to become the largest oil producer in the Appalachian region. It became an independent company in 1911 when the Standard Oil Trust was dissolved.

In a parallel development, two related distributors of lubricating oils, one on the East Coast and the other on the West Coast, were founded in 1908 and 1913, respectively. Both companies bought their motor oil, which in 1916 they agreed to market as Pennzoil, from refineries that had operated near Oil City since the 1880s. Through a complex of mergers, the refiners and the growing number of Pennzoil distributors were incorporated in 1925 under the name the Pennzoil Company. That same year South Penn Oil acquired a controlling interest in Pennzoil, and operations became nationwide, from New York to California. More acquisitions followed over the years, and in 1955 South Penn Oil acquired complete ownership of Pennzoil. The company produced a range of products, though its principal products were Pennzoil-brand motor oils, and its reserves were mainly located in the older oil fields of the Northeast.

See also[edit]

References[edit]

  1. ^ "PENNZOIL". Texas State Historical Association (together with the University of North Texas's "University Libraries"). Retrieved December 19, 2013. "In 1965 the Liedtke brothers achieved the dramatic takeover of United Gas Corporation, a company five times the size of Pennzoil. Among United Gas Corporation's affiliates were the United Gas Pipeline Company of Shreveport, [...] Union Producing Company; Duval Corporation, [...] and Atlas Processing Company. In 1968 United Gas was merged into Pennzoil, and the firm was renamed Pennzoil United, Incorporated." 
  2. ^ "W.C. Liedtke; Co-Founder of Pennzoil". Los Angeles Times. 4 March 1991. 
  3. ^ "General Conditions and Legal Notices." Pennzoil. February 14, 1998. Retrieved on January 17, 2010.
  4. ^ http://articlesguidance.org/the-complete-history-of-pennzoil-y7h4s/
  5. ^ "Jiffy Lube Scam Caught On Tape". YouTube. Retrieved 24 May 2009. 
  6. ^ Beatty, Jeffrey (2008). Legal Environment. Mason, Ohio: South-Western Cengage Learning. p. 144. ISBN 978-0-324-78654-5. 
  7. ^ Pennzoil Co. v. Texaco Inc., 481 US 1, 5 (1987).
  8. ^ Pennzoil Co. v. Texaco Inc., 481 US 1, 5,6 (1987).
  9. ^ Pennzoil Co. v. Texaco Inc., 481 US 1, 10-18 (1987).
  10. ^ Texaco, Inc v. Pennzoil Co., 729 SW 2d 768, 785, 866 (1987).
  11. ^ Lewin, Tamar (December 19, 1987). "Pennzoil-Texaco Fight Raised Key Questions". New York Times. Retrieved March 3, 2013. 

External links[edit]