Pennzoil history

In 1911 the Supreme Court ordered the dissolution of Standard Oil Company (New Jersey). South Penn began life on its own as one of the leading drillers of crude oil in a region that was largely played out.

In the meantime, Suhr had merged his refining outfits in 1914 into a single company called Germania Refining Company, soon changed for patriotic reasons to Penn-American Refining Company.

Soon thereafter, through a 1915 advertisement in the Saturday Evening Post, Quaker State became a nationally known brand.

Racial tensions resulted in serious rioting in 1917, when black United States Army soldiers were stationed in the city; nearly 20 people were killed.

To capitalize on Pennzoil's growing popularity, Suhr changed the name of his two marketing companies in 1921 to the Pennzoil Company (California) and the Pennzoil Company (Pennsylvania).

In 1924 the Eastern Refining Company purchased the Quaker State brand name and renamed itself the Quaker State Oil Refining Company.

1925: South Penn, the former Standard Oil producer, buys 51 percent of Pennzoil's stock.

The immediate effect of this surge in production was to depress the price of Pennsylvania crude to an all-time low in 1933, but its long-term effect on Pennzoil's future history was to be much more profound.

In 1936 Quaker State signed an agreement with the Standard Oil Company to act as the company’s exclusive sales agents for the its oil products in 13 Midwestern states.

In 1940 the company introduced a motor oil with greater chemical stability, which it called Stabilized Quaker State Motor Oil.

Quaker State’s original charter said nothing about drilling and production of oil products, and until 1944, Quaker State bought its supply of oil from independent producers.

After 1945 the growth of the United States car industry and the size of car engines themselves prompted innovations in oil products production.

One such wildcatting firm, Zapata Petroleum Corporation, was founded in 1953 by two brothers, J. Hugh and William Liedtke, John Overbey, and a young man named George Bush, later to abandon oil for the richer field of politics.

In 1954 Quaker State introduced an oil product with anti-wear, anti-rust, anti-corrosive, and high detergency ingredients.

More acquisitions followed over the years, and in 1955 South Penn Oil acquired complete ownership of Pennzoil.

By 1960, sales for Quaker State were on average surpassing the $50 million mark, representing an eightfold increase in the 30 years since the company was first established.

1962: J. Hugh Liedtke becomes president of South Penn.

Pennzoil was still a relatively small player among the oil giants, with sales in 1963 of only $77 million and a net profit of about $7 million.

In 1964 Quaker State decided to diversify its business, and it purchased Truck-Lite Company, based in Falconer, New York, which made fancy lights fitted onto trucks, trailers, and tractors.

He offered to buy one million shares of United at $41 per share; five million shares were promptly tendered, and Pennzoil bought all of them in 1965 for a total purchase of 42 percent of United's stock, borrowing $215 million of the $225 million required.

In 1970 sales for the company topped $120 million, with profits of $10.7 million.

In 1970, sales for the company topped $120 million, with profits posted at $10.7 million. It opened the Congo Refinery at Newell, West Virginia, in 1972, which represented at the time the most modern, specialized, lubricant refinery on the continent.

1974: Liedtke spins off his United Gas Pipe Line Company, a subsidiary of United Gas.

Providing a company-wide increase of 75 percent in refining capacity, the Congo refinery allowed sales for Quaker State to reach $300 million in 1975.

In May 1976 the Valley Camp Coal Company, based in Cleveland, Ohio, was purchased for around $50 million, offering vast coal reserves in the eastern and western United States.

By 1980 Pennzoil sales had passed $2 billion, the bulk of it generated by the company's traditional strength in the refining and sale of motor oil.

On January 4, 1984, the J. Paul Getty interests agreed to merge Getty Oil Company with Pennzoil, but two days later this agreement was breached by the announcement of another agreement, selling Getty Oil to Texaco Inc.

After winning a jury verdict of $10.5 billion in 1985, Pennzoil eventually settled for a $3-billion payment from Texaco.

As Quentin Wood said of this expansion in 1986: “We’re working hard to take advantage of opportunities to leverage our brand name into a growing number of products and services.

Liedtke was aware, however, that Texaco was a wealthy company even for the oil business, able to sustain a huge cash loss, and by the end of 1987 Texaco agreed to pay Pennzoil $3 billion to have done with the case.

In a high-profile corporate war, in 1988 Pennzoil accepted a settlement of $3 billion from Texaco after the latter was found guilty of interference in Pennzoil's failed merger with Getty Oil.

Liedtke, therefore, in 1989 spent the bulk of the money, $2.1 billion, for a big chunk of a larger oil concern, in this case 8.8 percent of Chevron.

While some shareholders sued and tried to change takeover policies, other analysts pointed out Pennzoil had done very well since CEO James Pate took over in 1990.

The recession also produced disappointments for Quaker State in 1991.

Pennzoil began to reduce its Chevron holding in October 1992, when it exchanged 48 percent of its shares (worth about $1.2 billion) for Chevron PBC, which owned 240 million barrels of oil and gas reserves in and around the Gulf of Mexico.

McKay, Jim, “Quaker State Taps Soup Company Veteran as CEO,” Pittsburgh Post-Gazette, June 11, 1993.

Steigher, Gary, “What’s at Stake? The Botton Line: Quaker State Goes after Bigger Share,” Derrick, February 18, 1994.

Mohnkern, Glen, “Quaker State: It’s Over,” Derrick, April 29, 1995.

In 1996, Pennzoil also repositioned some products: it changed the name of its line of synthetic oils to Performax 100, and it broadened its Wolf Head line from a regional product to a national one.

In June 1997, Union Pacific Resources Group Inc.--an energy exploration and production company based in Fort Worth, Texas--launched a $4 billion hostile takeover bid of Pennzoil that the company board opposed, intent on its desire to let Pate's restructuring play itself out.

shock, barbara. "pennzoil ceo defends soundness of stretegy despite lukewarm reception from wall street." the oil daily, 17 april 1998.

Devon Energy Corp. of Oklahoma bought PennzEnergy in August 1999.

Also in 2000, Pennzoil-Quaker State completed expansion projects in South Africa, Spain, and Puerto Rico.

The company continued selling off ancillary assets and businesses throughout 2001: a packaging plant for lubricants and its Louisiana-based refinery in the first quarter of the year.

By August 2002, Pennzoil-Quaker State had agreed to a takeover by Shell Oil Company, a unit of Royal Dutch/Shell and was awaiting completion of the merger in the second half of the year.

Hurricane Ike, though responsible for far fewer deaths, caused similar damage to Houston shortly after making landfall in nearby Galveston in September 2008.