Oil & Honor: The Texaco-Pennzoil Wars: Inside the $11 Billion Battle for Getty Oil

The absorbing inside story of the battle between Texaco and Pennzoil for Getty Oil.

Category: Bankruptcy & Restructuring

This title is part of the Business Histories list.

Of Interest:

Kingdom: The Story of the Hunt Family of Texas

The Oil Business in Latin America

Wildcatters: A Story of Texans, Oil, and Money

This book presents the absorbing drama in which Texaco attempted to takeover Getty Oil even though some accommodation had been reached between Pennzoil and Getty. It covers a period of less than two years, from the dealmaking to the judgment in which Texaco was ordered to pay $11 billion to Pennzoil. Basically, it is described as a battle between two groups - "the Good-Ol'-Boys of the oilfields and the New Good-Ol'-Boys of Wall Street. By the time the judgment was handed down, probably the most important figure in the whole story was J. Paul Getty who had been dead for some ten years.

This is a fun read. Fun enough to take to the beach, although at 500 pages it's a bit hefty to hold up while you lounge on that sandy towel. It's got all the elements of great entertainment: a trainload of money, courtroom melodrama, and a host of extremely odd characters, including a couple of Texas state court judges who could make California's Judge Ito look like Justice Brandeis. You might even throw in a biblical analogy - many pundits did - although for my money Pennzoil chair J. Hugh Liedtke was a little too wily and a lot too flush to be David-with-a-slingshot.

Everyone knows the story. In 1984 Texaco bought Getty oil for $9.98 billion, days after the Getty board had made a handshake deal with Pennzoil to sell three-sevenths of its assets for a 10 percent lower price per share. Did Texaco tortiously interfere with Pennzoil's oral contract, or was Getty free (and in fact duty-bound) to accept Texaco's higher offer? I'll leave you there on the edge of your seat.

Yes, the plot is familiar, but as they say, God is in the details, and the Pulitzer Prize-winning author, a professional journalist who covered the trial for the Wall Street Journal, gives us details aplenty. He's sieved the most intriguing and significant facts from a daunting amount of evidence: 50,000 pages of affidavits, hours of video testimony, 250 interviews,

You'll collect your favorite factoids as you read along. Mine have to do with the succession of judges, the first of whom had a close relationship with Pennzoil attorney Joe Jamail, while the second hadn't read the trial record when he took over the gavel and made his ignorance of the governing New York law seem almost a point of pride.

The flamboyant Jamail (who collected a $400 million fee for his work, of which $50 million reportedly has been given to charities) was known previously, the author tells us, for such feats as convincing a jury that the City of Houston was negligent for planting a tree that his client ran into while drunk. Here, he won the verdict for his client, in part, by exploiting that shopworn cliché of trial practice - the local good of boys versus the big city pinstripes. Is an oral agreement in principle a binding contract? Metaphorically shrugging, Mr. Jamall told the jury, "Sure looks like a deal to me." It worked like a charm.

Engrossing as the deal, trial, and verdict are, the author offers more. His first 150 pages provide useful background on the respective oil empires, and chronicles Getty's history in detail.

But don't take my word that this book is worth the money. Read what the white-shoe critics had to say when this book first came out in 1987. "A riveting drama," said the New York Times Book Review. "Pure excitement... More fun than flying on a corporate jet;" per the Dallas Times Herald, with presumably more experience in flying on corporate jets than I can claim. "A real-life script fit for TV's Dallas... Harold Robbins and Robert Ludlum let loose in the world of Texas good of boys and New York takeover specialists," opined the Washington Times.

From The New York Times Book Review

"A riveting drama."

From Dallas Times Herald

"Pure excitement...More fun than flying on a corporate jet."

From Kirkus

"A stunningly detailed reconstruction of the highest-stakes competition in corporate history... Nuanced financial journalism at its very best."

From Across the Board

"The sweep and characterization of a James Michener novel as it builds toward the verdict."

From Washington Times

"A real-life script fit for TV's Dallas... Harold Robbins and Robert Ludlum let loose in the world of Texas good ol' boys and New York takeover specialists."

Oil and honor is an exhaustive and fascinating history..., August 25, 1999
Reviewer: A reader (Amazon.com)

Oil and honor is an exhaustive and fascinating history, although it falls short of spectacularly engaging. Petzinger does an excellent job of recounting the facts and context of this chapter of financial history. Ultimately, the book is constrained by the subject -- the minutiae of merger document negotiation and court room hagling pale in comparison to the book's earlier section on the forces and personalities behind the disputed transaction. Nevertheless, the book is an excellent addition to one's financial history library.

Thomas Petzinger's first book, Oil and Honor (1987), relates the same story that won him a Pulitzer Prize nomination in 1985 as he covered the story of the buy out Getty Oil by Texaco for the Wall Street Journal.

Reading this book one can see why he received the nomination. Petzinger's writing style draws the reader in just like a good novel. It is a cliche to say that the reader will not want to put the book down. However, in this case, that cliche entirely fits. It is a great high drama.

Thomas Petzinger, Jr. has spent 20 years as a reporter, editor and columnist for The Wall Street Journal, where he created the widely read weekly column, "The Front Lines." He grew up in Youngstown, Ohio, and received his journalism degree from Northwestern University.

He is the author of The New Pioneers: The Men and Women Who are Transforming the Workplace and Marketplace as well as Hard Landing, an inside look at the airline industry following deregulation. Both titles were selected by The New York Times Book Review as notable books of the year.

Tom Petzinger is married to Paulette Thomas, also a Journal reporter, with whom he once shared the Gerald Loeb Award in business journalism. They have three children and live in Pittsburgh.