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Pennzoil-Quaker State Company Announces Fourth Quarter Refinery Write-Down

6 January 2000

Pennzoil-Quaker State Company Announces Fourth Quarter Refinery Write-Down, Shut Down of Rouseville Refinery

    HOUSTON, Jan. 6 -- Pennzoil-Quaker State Company
today announced a $480 million pretax write-down of its Rouseville, Pa. and
Shreveport, La. refineries to be taken during the fourth quarter of 1999.
After-tax, the write-down will total $293 million.  The company also announced
that it plans to cease processing crude oil at its Rouseville refinery on
January 31 and will shut down that refinery as well as its Rouseville
packaging plant by June 2000.
    The Rouseville refinery currently supplies feedstocks to Penreco, a 50/50
industrial specialties marketing and manufacturing partnership between
Pennzoil-Quaker State Company and Conoco, under long term contracts.
Pennzoil-Quaker State Company has made alternate long term contractual
arrangements to continue the supply of these Pennsylvania grade crude oil
based feedstocks to Penreco, assuring continuity of feedstock supply to this
partnership.
    The company will convert the Rouseville facility to continue production of
wax products until June 2000 in support of its Bareco Products wax marketing
partnership with Baker Petrolite, as it pursues a sale of the Rouseville
facility and its partnership interest in Bareco.  This interim operation will
assure the continued supply of Bareco's broad line of high quality wax
products to domestic and international purchasers of paraffin,
microcrystalline and related synthetic waxes.
    "The shutdown of Rouseville is a difficult decision for us to make in
light of the tremendous historical ties our company has with this community,"
said James J. Postl, president and chief operating officer of Pennzoil-Quaker
State Company.  "Unfortunately, declining supplies of Appalachian crude oil
and rising transportation costs have made continued operation of the
Rouseville refinery economically infeasible.  In addition, our merger with
Quaker State Corporation created excess packaging capacity in our supply chain
and distribution system.  Our human resources professionals are developing a
comprehensive transfer, severance and job placement package for those affected
by these actions."
    Postl added, "The write-down of the Shreveport and Rouseville refineries
reflects the company's focus on its core automotive consumer products business
and market conditions for refineries.  Pennzoil-Quaker State Company is
committed to exiting the refining business, with the exception of its
strategically important and profitable Excel-ParaLubes joint venture."
    Pennzoil-Quaker State Company recently completed a strategic review of its
manufacturing assets and businesses, including refineries, partnerships and
packaging plants.  During the review, it evaluated the strategic and financial
advantages and disadvantages the company derives from the vertical integration
of its manufacturing and marketing capabilities.  The company will continue to
pursue divestiture options on the refineries and related businesses.
    During fourth quarter of 1999, the company will take a pretax write-down
of $480 million related to the anticipated sale or divestiture of its
refineries.  The after-tax write-down will total $293 million, reducing
Pennzoil-Quaker State's equity from $1.312 billion to $1 billion and initially
increasing its debt to equity ratio from 44.8% to 52.4%.  However, the write-
down will reduce annual pretax depreciation and amortization expense by
approximately $17 million.
    Pennzoil-Quaker State Company is a leading worldwide automotive consumer
products company, marketing over 1,300 products with 20 leading brands in over
50 countries.  The company markets Pennzoil(R) and Quaker State(R) brand motor
oils, the number one and number two selling motor oils in the United States.
Jiffy Lube, a wholly owned subsidiary of Pennzoil-Quaker State Company, is the
world's largest fast lube operator and franchiser.  Pennzoil-Quaker State
Company also markets a complete line of automotive car care products including
Axius(TM) auto accessories, Blue Coral(R) and Classic(R) waxes and washes,
Black Magic(R) and Westley's(R) tire and wheel care products, Fix-A-Flat(R)
tire sealants, Medo(R) air fresheners, Rain-X(R) glass treatments, Gumout(R),
Snap(R) and The Outlaw(R) maintenance chemicals and Slick 50(R) engine
treatments.  The company recently introduced Pennzoil Roadside(TM) Rescue(R)
Emergency Fuel Additive, a safe, conveniently packaged emergency fuel additive
that transports out-of-gas vehicles about 10 miles from the side of the road
to safety.  Pennzoil Roadside(TM) Rescue(R) was named one of Business Week's
Best Products of 1999.