<PAGE>
<PAGE>  1

                           UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington D. C.  20549



                             FORM 10-Q
        Quarterly Report Pursuant to Section 13 or 15(d) of
                the Securities Exchange Act of 1934


For the Quarter Ended September 30, 1996 Commission File No. 1-5591


                         PENNZOIL COMPANY
      (Exact name of registrant as specified in its charter)


                Delaware                            74-1597290
      (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)            Identification No.)


                   Pennzoil Place, P.O. Box 2967
                    Houston, Texas  77252-2967
              (Address of principal executive offices)



Registrant's telephone number, including area code:  (713) 546-4000


      Indicate  by check mark whether the registrant (1) has  filed
all  reports  required to be filed by Section 13 or  15(d)  of  the
Securities Exchange Act of 1934 during the preceding 12 months  (or
such  shorter period that the registrant was required to file  such
reports), and (2) has been subject to such filing requirements  for
the past 90 days.  Yes   X  .  No     .

     Number of shares outstanding of each class of common stock, as
of latest practicable date, October 31, 1996:

     Common stock, par value $0.83-1/3 per share, 46,537,819
shares.


<PAGE>
<PAGE>  2

                                              PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------

<TABLE>
                                                     PENNZOIL COMPANY
                                        CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                                        (UNAUDITED)
<CAPTION>

                                                                       Three Months Ended                 Nine Months Ended
                                                                          September 30                       September 30
                                                                  ----------------------------      ----------------------------
                                                                     1996             1995             1996             1995
                                                                  -----------      -----------      -----------      -----------
                                                                        (Expressed in thousands except per share amounts)
<S>                                                               <C>              <C>              <C>              <C>
REVENUES                                                          $  653,688       $  600,012       $1,877,609       $1,881,965

COSTS AND EXPENSES
   Cost of sales                                                     360,013          373,665        1,071,762        1,129,101
   Selling, general and administrative expenses                       88,432          103,759          257,979          306,217
   Depreciation, depletion and amortization                           68,727           73,050          207,726          256,476
   Exploration expenses                                                8,306            4,706           30,014           25,087
   Taxes, other than income                                           13,688           12,736           41,035           41,318
   Impairment of long-lived assets (See Note 2)                         -             399,830             -             399,830
   Interest charges, net                                              43,585           48,322          137,952          144,568
                                                                  -----------      -----------      -----------      -----------
INCOME (LOSS) BEFORE INCOME TAX                                       70,937         (416,056)         131,141         (420,632)

Income tax provision (benefit)                                         5,812         (140,770)          25,704         (143,299)
                                                                  -----------      -----------      -----------      -----------
NET INCOME (LOSS)                                                 $   65,125       $ (275,286)      $  105,437       $ (277,333)
                                                                  ===========      ===========      ===========      ===========

EARNINGS (LOSS) PER SHARE                                         $     1.40       $    (5.95)      $     2.27       $    (6.00)
                                                                  ===========      ===========      ===========      ===========

DIVIDENDS PER COMMON SHARE                                        $      .25       $      .75       $      .75       $     2.25
                                                                  ===========      ===========      ===========     ============

AVERAGE SHARES OUTSTANDING                                            46,494           46,273           46,445           46,216
                                                                  ===========      ===========      ===========      ===========
END OF PERIOD SHARES OUTSTANDING                                      46,518           46,303           46,518           46,303
                                                                  ===========      ===========      ===========      ===========


<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>
<PAGE>  3

                                  PART I. FINANCIAL INFORMATION - continued

<TABLE>
                                              PENNZOIL COMPANY
                                    CONDENSED CONSOLIDATED BALANCE SHEET
                                                 (UNAUDITED)
<CAPTION>
                                                                            September 30,         December 31,
                                                                                1996                  1995
                                                                            -------------        -------------
                                                                                 (Expressed in thousands)
<S>                                                                         <C>                  <C>
ASSETS

Current assets
   Cash and cash equivalents                                                 $     33,082         $     23,615
   Receivables                                                                    198,253              335,876
   Inventories
     Crude oil, natural gas and sulphur                                            25,132               41,363
     Motor oil and refined products                                               129,933              119,830
   Deferred income tax                                                             20,351               26,452
   Other current assets                                                            68,944               57,689
                                                                            -------------        -------------
Total current assets                                                              475,695              604,825

Property, plant and equipment, net                                              2,231,251            2,418,025
Marketable securities and other investments                                       955,058              910,334
Other assets                                                                      325,261              374,592
                                                                            -------------        -------------

TOTAL ASSETS                                                                 $  3,987,265         $  4,307,776
                                                                            =============        =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Current maturities of long-term debt                                      $      1,656         $      2,263
   Notes payable                                                                      -                468,934
   Accounts payable and accrued liabilities                                       228,277              330,263
   Interest accrued                                                                49,324               35,358
   Other current liabilities                                                       80,882               81,450
                                                                            -------------        -------------
Total current liabilities                                                         360,139              918,268

Long-term debt                                                                  2,139,880            2,038,921
Deferred income tax                                                               242,043              227,941
Other liabilities                                                                 297,720              286,414
                                                                            -------------        -------------
TOTAL LIABILITIES                                                               3,039,782            3,471,544
                                                                            -------------        -------------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY                                                              947,483              836,232
                                                                            -------------        -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                   $  3,987,265         $  4,307,776
                                                                            =============        =============

<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>
<PAGE>  4

                                     PART I. FINANCIAL INFORMATION - continued

<TABLE>
                                                 PENNZOIL COMPANY
                                  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                    (UNAUDITED)
<CAPTION>

                                                                                          Nine Months Ended
                                                                                             September 30
                                                                                   ---------------------------------
                                                                                      1996                  1995
                                                                                   -----------           -----------
                                                                                        (Expressed in thousands)
<S>                                                                                <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                                $  105,437            $ (277,333)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
      Depreciation, depletion and amortization                                        207,726               256,476
      Impairment of long-lived assets                                                    -                  399,830
      Dry holes and impairments                                                         5,240                 7,917
      Deferred income tax                                                              14,805              (148,461)
      Non-cash and other nonoperating items                                            (9,474)               (4,978)
      Change in operating assets and liabilities                                       16,516               158,624
                                                                                   -----------           -----------
  Net cash provided by operating activities                                           340,250               392,075
                                                                                   -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                                               (400,815)             (288,801)
  Acquisition of Viscosity Oil                                                           -                  (33,642)
  Purchases of marketable securities and other investments                           (433,716)             (496,287)
  Proceeds from sales of marketable securities and other
    investments                                                                       443,469               490,056
  Proceeds from sales of assets                                                       463,360                90,964
  Other investing activities                                                           (3,214)               (5,975)
                                                                                   -----------           -----------
  Net cash provided by (used in) investing activities                                  69,084              (243,685)
                                                                                   -----------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds (repayments) of notes payable, net                                        (167,755)              165,334
  Debt and capital lease obligation repayments                                     (1,419,731)             (208,741)
  Proceeds from issuance of debt                                                    1,222,206                25,000
  Dividends paid                                                                      (34,839)             (104,009)
  Other Financing Activities                                                              252                  -
                                                                                   -----------           -----------
  Net cash used in financing activities                                              (399,867)            (122,416)
                                                                                   -----------           -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                               9,467                25,974


CASH AND CASH EQUIVALENTS, beginning of period                                         23,615                24,884
                                                                                   -----------           -----------

CASH AND CASH EQUIVALENTS, end of period                                           $   33,082            $   50,858
                                                                                   ===========           ===========

<FN>
<F1>
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>
<PAGE>  5

             PART I. FINANCIAL INFORMATION - continued


                        PENNZOIL COMPANY
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (UNAUDITED)

(1)  General -

     The  condensed  consolidated  financial  statements  included
herein  have been prepared by Pennzoil Company ("Pennzoil") without
audit  and  should  be  read  in  conjunction  with  the  financial
statements  and  the  notes thereto included in  Pennzoil's  latest
annual  report.   The foregoing financial statements  include  only
normal  recurring  accruals  and  all  adjustments  which  Pennzoil
considers necessary for a fair presentation.  Certain prior  period
items   have   been  reclassified  in  the  condensed  consolidated
financial  statements  in order to conform with  the  current  year
presentation.

(2)  Adoption of New Accounting Standards -

     In  October  1995,  the Financial Accounting  Standards  Board
issued  Statement  of Financial Accounting Standards  ("SFAS")  No.
123,  "Accounting for Stock-Based Compensation," which  established
an   elective   new   standard   on  accounting   for   stock-based
compensation.   SFAS No. 123 establishes a fair value-based  method
of  accounting  for  stock-based compensation plans  awarded  after
December  31, 1995 and encourages companies to adopt the accounting
method  set  forth  in  SFAS  No. 123  in  place  of  the  existing
accounting  method,  which  requires expense  recognition  only  in
situations where stock compensation plans award intrinsic value  to
employees at the date of grant.  Companies that elect not to follow
SFAS  No.  123 for accounting purposes must make annual  pro  forma
disclosure of its effects.
     As of January 1, 1996, Pennzoil adopted SFAS No. 123 using the
pro   forma  disclosure  method  described  in  the  pronouncement.
Accordingly,  adoption of the statement did not  affect  Pennzoil's
results  of operations or financial position.  Information required
by  SFAS  No.  123  relating to stock-based  compensation  will  be
included in footnotes to Pennzoil's audited financial statements.
     Effective  July 1, 1995, Pennzoil adopted the requirements  of
SFAS  No. 121, "Accounting for the Impairment of Long-Lived  Assets
and for Long-Lived Assets to Be Disposed Of," which is intended  to
establish  more consistent accounting standards for  measuring  the
recoverability  of  long-lived assets.  In certain  instances,  the
statement  specifies that the carrying values of assets be  written
down  to  fair values, which, for Pennzoil, resulted in write-downs
that  were  previously  not  required under  its  prior  impairment
policy.   The charges, which totaled $265.5 million ($399.8 million
before  tax),  or  $5.74 per share, as of July  1,  1995,  resulted
primarily from the more detailed impairment review procedures  that
were  required  on  Pennzoil's proved oil and  gas  properties.  In
determining  whether an asset is impaired under the  new  standard,
assets   are required to be grouped at the lowest level  for  which
there  are identifiable cash flows that are largely independent  of
the  cash flows of other groups of assets.  On this basis,  certain
fields  in  North America were deemed to be impaired  because  they
were  not  expected to recover their entire carrying value  through
the  future cash flows expected to result from the operation of the
field  and  its  eventual  disposition.   Under  Pennzoil's   prior
policy, oil and gas assets reviewed for impairment were grouped  at
a higher level.


<PAGE>
<PAGE>  6

             PART I. FINANCIAL INFORMATION - continued

(3)  Transactions Involving Oil and Gas and Other Assets -

     In  July 1996, Pennzoil completed two related transactions with
Gulf   Canada   Resources   Limited  ("Gulf   Canada"):   (i)   the
establishment of a joint venture for the development of natural gas
reserves in the Zama area of northern Alberta and (ii) the sale  by
Pennzoil  of  its  remaining, non-strategic Canadian  oil  and  gas
assets.  After  working  capital and closing adjustments,  Pennzoil
received  net proceeds of US $192.8 million from the  sale  of  the
Canadian  oil  and gas assets to Gulf Canada.  No  material  pretax
gain  resulted from the sale, but an approximate $19 million  tax
benefit  was  recorded  in  the third quarter  of  1996.  The  sale
included  840,000  net  acres  of land,  75  percent  of  which  is
undeveloped.   The  properties sold were  located  in  Alberta  and
northwestern British Columbia and included net proved  reserves  of
approximately  35 million barrels ("MMbbls") of oil equivalent  and
in  July  1996  were producing approximately 5.5  thousand  barrels
("Mbbls") per day of liquids and 34 million cubic feet ("MMcf") per
day  of  natural  gas,  net of royalties.  Included  in  Pennzoil's
consolidated  results are revenues of $26.9 million  and  operating
income  of  $.2 million from these properties during the first  six
months of 1996.
    In July 1996, Pennzoil completed the sale of approximately half
of   its  interest  in  the  Azeri-Chirag-Gunashli  ("ACG")   joint
development  unit offshore Azerbaijan in the Caspian Sea  to  Exxon
Azerbaijan  Limited  ("Exxon"),  ITOCHU Oil Exploration  Co.,  Ltd.
("ITOCHU")  and  Unocal  Khazar,  Ltd.  ("Unocal").   The   three
companies will pay approximately $130 million to Pennzoil for  a  5
percent working interest in the ACG unit (3.0006 percent to  Exxon,
1.4705  percent  to ITOCHU and 0.5289 percent to  Unocal)  and  the
right  to  receive  51  percent of the payments  due  Pennzoil  for
reimbursement  of  costs incurred in developing a  gas  utilization
project  for  the Gunashli Field.  Cash payments are  scheduled  in
three  installments with the first installment having been made  in
two  payments consisting of approximately $83 million  received  at
closing  and another $5 million received in August 1996. Subsequent
installments  of  $22  million and $20 million  are  due  at  first
production and when the unit reaches production of 200,000  barrels
per  day, respectively.  Pennzoil retains a 4.8175 percent  working
interest  in the ACG unit.  As part of the transaction,  the  three
companies will fund all of Pennzoil's future obligations in the ACG
project,   retroactive  to  January  1,  1996,   until   all   such
expenditures  and  accrued interest are recovered  from  Pennzoil's
share  of  production from the ACG unit.  Pennzoil received  a  net
cash  payment  of  approximately $16 million  in  August  1996  for
reimbursement  of Pennzoil's obligations in the ACG  unit  incurred
from January 1996 through July 1996.  No gain or loss resulted from
this  transaction as proceeds from the sale were applied to  reduce
Pennzoil's net investment in the ACG unit.
     In addition to its interest in the ACG unit, Pennzoil holds  a
30  percent  interest in a definitive exploration, development  and
production  sharing contract covering the Karabakh  prospect,  also
located in the Caspian Sea.  The Karabakh agreement was ratified by
the Azerbaijan Parliament in February 1996.
     In the first quarter of 1996, Pennzoil substantially completed
its  domestic asset highgrading program and the related disposition
of noncore oil and gas assets commenced in 1992. Excluding proceeds
from  the two sales discussed above, proceeds from the sale of  oil
and  gas  assets  totaled $88.6 million for the nine  months  ended
September  30,  1996  with $88.1 million of those  sales  occurring
during  the  first quarter of 1996.  Gains or losses on such  sales
during the nine months ended September 30, 1996 were insignificant.
     In September 1996, Pennzoil completed the sale of Vermejo Park
Ranch to Vermejo Park, L.L.C., a Georgia limited liability company.
The  ranch is located in northern New Mexico and southern  Colorado
and  is  approximately 578,000 acres.  Pennzoil recorded  a  pretax
gain of $41.3 million from the sale in the third quarter of 1996.


<PAGE>
<PAGE>  7

            PART I. FINANCIAL INFORMATION - continued

(4)   Acquisitions -

      In  April  1995, Pennzoil Gas Marketing Company, an  indirect
wholly owned Pennzoil subsidiary ("PGMC"), and BRING Gas Services
Corp.  ("BRING"), a subsidiary of Brooklyn Union Gas Co.,  formed
PennUnion  Energy  Services  L.L.C. ("PennUnion"),  a  50-50  gas
marketing  joint  venture.   In  September  1996,  Pennzoil  Energy
Marketing  Company,  an indirect wholly owned  Pennzoil  subsidiary
("PEMC"),  purchased  the  50% interest  in  PennUnion  owned  by
BRING.   Pennzoil is actively seeking a partner or partners  to
help develop and expand this business and anticipates reducing  its
total  ownership interest in PennUnion to 50% or below in the  near
future.
      In  September  1995, Pennzoil Products Company  ("PPC"),  a
wholly  owned  subsidiary of Pennzoil, acquired the assets  of  the
Viscosity   Oil   division  ("Viscosity")  of  Case   Corporation
("Case")  for $33.6 million. The acquisition was  financed  by  a
combination  of  cash  on  hand  and  borrowings  under  Pennzoil's
commercial paper and money market line facilities.  The acquisition
was  accounted  for  using the purchase method  of  accounting  and
results of operations of Viscosity subsequent to September 1995 are
reflected in Pennzoil's consolidated statement of income.

(5)  Accounts Receivable -

     In  September 1996, Pennzoil Receivables Company ("PRC"),  a
wholly owned special purpose subsidiary of Pennzoil, entered into a
receivables  sales  facility, which provides for the ongoing  sales
of  up  to $135 million of accounts receivable of certain Pennzoil
subsidiaries.   The facility expires in September  1997.  Sales  of
accounts receivable under this agreement totaled $128.0 million as
of  September  30,  1996.   Pennzoil used the  proceeds  to  reduce
outstanding   debt.   Fees  incurred  on  the  sale   of   accounts
receivable were not material in the third quarter of 1996 and  are
included  in other income, net.


Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations

Results of Operations

     Net income for the quarter and nine months ended September 30,
1996 was $65.1 million, or $1.40 per share, and $105.4 million,  or
$2.27  per  share, respectively.  This compares with net losses  of
$275.3  million, or $5.95 per share, for the third quarter of  1995
and  $277.3 million, or $6.00 per share, for the nine months  ended
September 30, 1995.  Effective July 1, 1995,  Pennzoil adopted  the
requirements  of  SFAS No. 121, "Accounting for the  Impairment  of
Long-Lived  Assets and for Long-Lived Assets to  Be  Disposed  Of."
Results  for the quarter and nine months ended September  30,  1995
include a charge of $265.5 million ($399.8 million before tax),  or
$5.74  per  share, as of July 1, 1995 to reflect the impairment  of
long-lived assets.
      Excluding  the net charges associated with the impairment  of
long-lived  assets  in 1995, earnings increased $74.9  million  and
$117.2 million for the quarter and nine months ended September  30,
1996,  respectively, compared to the prior year.  Results  for  the
third  quarter and nine months ended September 30, 1996  include  a
$41.3 million pretax gain on the sale of Vermejo Park Ranch and  an
approximate  $19 million tax benefit associated with  the  sale  of
Canadian  oil and gas assets.  In addition, earnings for the  third
quarter and nine months ended September 30, 1996 increased compared
to  the  prior year due to improved results from the  oil  and  gas
segment,  lower  overall  operating costs  and  lower  general  and
administrative expenses.


<PAGE>
<PAGE>  8

            PART I. FINANCIAL INFORMATION - continued


Oil and Gas

      Operating income from this segment for the quarter  and  nine
months  ended  September  30, 1996 was  $60.7  million  and  $175.5
million,  respectively.   This compares with  operating  income  of
$19.5 million and $64.9 million, respectively, for the same periods
in 1995.  The increase in operating income for both the quarter and
nine  months ended September 30, 1996 was primarily due  to  higher
natural  gas prices, lower operating and general and administrative
expenses   and   lower  depreciation,  depletion  and  amortization
("DD&A") expense.  The lower DD&A expense experienced in the  third
quarter of 1996 was primarily due to a decrease in natural gas  and
liquids  volumes resulting from the disposition of noncore oil  and
gas  properties.   The  lower DD&A expense experienced  during  the
nine months ended September 30, 1996 was primarily attributable  to
lower  DD&A  rates  as a result of the July 1, 1995  write-down  of
assets  associated with the adoption of SFAS No.  121,  "Accounting
for  the Impairment of Long-Lived Assets and for Long-Lived  Assets
to  Be  Disposed Of," and to a decrease in natural gas and  liquids
volumes  resulting  from the disposition of  noncore  oil  and  gas
properties.
      Effective July 1, 1995, Pennzoil adopted the requirements  of
SFAS  No.  121  which,  in certain instances,  specifies  that  the
carrying  values  of assets be written down to  fair  values.   For
Pennzoil,  this  resulted in write-downs  of  proved  oil  and  gas
properties  that  were  not  required under  its  prior  impairment
policy.  The pretax charge taken in the third quarter of  1995  for
the  asset  impairment of Pennzoil's proved oil and gas  properties
was $378.9 million.
     Natural  gas  price realizations averaged $1.80  per  thousand
cubic feet ("Mcf") and $1.81 per Mcf, respectively, for the quarter
and nine months ended September 30, 1996, compared to $1.32 per Mcf
and  $1.39  per  Mcf, respectively, for the same periods  in  1995.
Natural  gas volumes produced for sale were 599.6 MMcf per day  and
596.0  MMcf per day, respectively, for the quarter and  nine months
ended  September 30, 1996, compared to 662.9 MMcf per day and 687.9
MMcf  per day, respectively, for the same periods in 1995.  Liquids
production volumes were 58.4 Mbbls per day and 61.3 Mbbls per  day,
respectively,  for the quarter and nine months ended September  30,
1996,  compared  to  64.6 Mbbls per day and  69.1  Mbbls  per  day,
respectively,  for  the  same periods in  1995.   The  decrease  in
natural  gas  and liquids volumes resulted from the disposition  of
noncore oil and gas properties.
     In July 1996, Pennzoil completed two related transactions with
Gulf  Canada:  (i)  the establishment of a joint  venture  for  the
development  of natural gas reserves in the Zama area  of  northern
Alberta  and  (ii)  the  sale by Pennzoil of  its  remaining,  non-
strategic  Canadian oil and gas assets.  After working capital  and
closing  adjustments, Pennzoil received net proceeds of  US  $192.8
million  from the sale of the Canadian oil and gas assets  to  Gulf
Canada.   No  material pretax gain resulted from the sale,  but  an
approximate  $19  million tax benefit was  recorded  in  the  third
quarter  of 1996. The sale included 840,000 net acres of  land,  75
percent  of which is undeveloped.  The properties sold were located
in  Alberta  and  northwestern British Columbia  and  included  net
proved reserves of approximately 35 MMbbls of oil equivalent and in
July 1996 were producing approximately 5.5 Mbbls per day of liquids
and 34 MMcf per day of natural gas, net of royalties.  Included  in
Pennzoil's  consolidated results are revenues of $26.9 million  and
operating  income of $.2 million from these properties  during  the
first six months of 1996.


<PAGE>
<PAGE>  9

            PART I. FINANCIAL INFORMATION - continued


    In July 1996, Pennzoil completed the sale of approximately half
of  its  interest  in  the  ACG  joint  development  unit  offshore
Azerbaijan  in the Caspian Sea to Exxon,  ITOCHU and  Unocal.   The
three companies will pay approximately $130 million to Pennzoil for
a  5  percent working interest in the ACG unit (3.0006  percent  to
Exxon,  1.4705 percent to ITOCHU and 0.5289 percent to Unocal)  and
the  right  to receive 51 percent of the payments due Pennzoil  for
reimbursement  of  costs incurred in developing a  gas  utilization
project  for  the Gunashli Field.  Cash payments are  scheduled  in
three  installments with the first installment having been made  in
two  payments consisting of approximately $83 million  received  at
closing  and another $5 million received in August 1996. Subsequent
installments  of  $22  million and $20 million  are  due  at  first
production and when the unit reaches production of 200,000  barrels
per  day, respectively.  Pennzoil retains a 4.8175 percent  working
interest  in the ACG unit.  As part of the transaction,  the  three
companies will fund all of Pennzoil's future obligations in the ACG
project,   retroactive  to  January  1,  1996,   until   all   such
expenditures  and  accrued interest are recovered  from  Pennzoil's
share  of  production from the ACG unit.  Pennzoil received  a  net
cash  payment  of  approximately $16 million  in  August  1996  for
reimbursement  of Pennzoil's obligations in the ACG  unit  incurred
from January 1996 through July 1996.  No gain or loss resulted from
this  transaction as proceeds from the sale were applied to  reduce
Pennzoil's net investment in the ACG unit.
     In addition to its interest in the ACG unit, Pennzoil holds  a
30  percent  interest in a definitive exploration, development  and
production  sharing contract covering the Karabakh  prospect,  also
located in the Caspian Sea.  The Karabakh agreement was ratified by
the Azerbaijan Parliament in February 1996.
     In the first quarter of 1996, Pennzoil substantially completed
its  domestic asset highgrading program and the related disposition
of noncore oil and gas assets commenced in 1992. Excluding proceeds
from  the two sales discussed above, proceeds from the sale of  oil
and  gas  assets  totaled $88.6 million for the nine  months  ended
September  30,  1996  with $88.1 million of those  sales  occurring
during  the  first quarter of 1996.  Gains or losses on such  sales
during the nine months ended September 30, 1996 were insignificant.
     In September 1996, Pennzoil and a subsidiary of Enterprise Oil
plc  ("Enterprise") agreed to form a strategic alliance  to  pursue
certain exploration opportunities on 102 leases in Pennzoil's  Gulf
of Mexico portfolio where Pennzoil's working interest is 50 percent
or  more.   Enterprise  will  earn an interest  equal  to  half  of
Pennzoil's working interest in each prospect (and any leases within
the  portfolio  into  which the prospect extends)  by  contributing
funds   towards  the  costs  of  drilling  a  jointly-agreed   upon
exploration well on each prospect.  On 59 of the 102 leases  within
the  portfolio,  where  Pennzoil's average equity  is  92  percent,
Enterprise  has agreed to contribute funds to cover 100 percent  of
such costs, subject to a minimum investment of $100 million through
1998.   On the remaining 43 leases, where Pennzoil's average equity
is 80 percent, Enterprise has agreed to cover 66.66 percent of such
costs, with no minimum commitment, through 1999.  These periods may
be  extended by one year and two years, respectively, if Enterprise
elects to increase its minimum commitment from $100 million to $150
million.   During  the  next  two  to  three  years,  Pennzoil  and
Enterprise expect to drill about 20 wells under the program.
     In  April  1995, PGMC and BRING formed PennUnion, a 50-50  gas
marketing  joint venture.   In September 1996, PEMC  purchased  the
50% interest in PennUnion owned by BRING.  Pennzoil is actively
seeking  a  partner  or partners to help develop  and  expand  this
business  and anticipates reducing its total ownership interest  in
PennUnion to 50% or below in the near future.


<PAGE>
<PAGE>  10

               PART I. FINANCIAL INFORMATION - continued


Motor Oil & Refined Products

      Operating income from this segment for the quarter  and  nine
months ended September 30, 1996 was $9.5 million and $39.7 million,
respectively.   This compares to operating income of $11.9  million
and $39.6 million, respectively, for the same periods in 1995.
      The  decrease  in  operating income  for  the  quarter  ended
September  30,  1996  from  the  comparable  period   in  1995  was
primarily  attributable  to  lower refining  margins  and  to  pre-
operating  expenses  related  to  the  start-up  costs   of   Excel
Paralubes,  a  joint  venture partnership  with  Conoco,  Inc.  for
construction and operation of a new lube base oil plant  near  Lake
Charles, Louisiana. Construction was completed in October 1996 with
product  shipments to begin in December 1996.  The  lower  refining
margins  were primarily the result of higher crude oil  prices  and
higher  operating  expenses.  Higher domestic  marketing  operating
results  offset  lower  refinery margins,  resulting  in  operating
income  for  the  nine  months  ended  September  30,  1996   being
essentially flat compared to the same period last year.
      In September 1995, PPC acquired the Viscosity Oil division of
Case for $33.6 million. Viscosity is a leading supplier of premium-
quality lubricants to the North American off-road industry  and  it
supplies  lubricants  to  substantially  all  of  the  Case  dealer
network,  with locations in all 50 states and Canada.  In addition,
Viscosity supplies virtually all of the factory fill lubricants for
Case's  North  American  manufacturing  plants.   As  part  of  the
acquisition, a long-term supply agreement was entered into  whereby
Pennzoil  will supply the aftermarket lubricant products that  Case
will continue to sell to its dealerships.  The agreement also calls
for  Pennzoil  to  supply  factory-fill lubricants  to  Case.   The
acquisition  was  financed by a combination of  cash  on  hand  and
borrowings under Pennzoil's commercial paper and money market  line
facilities.


Franchise Operations

     The franchise operations segment, operating through Pennzoil's
wholly  owned  subsidiary  Jiffy Lube International,  Inc.  ("Jiffy
Lube"),  recorded  operating  income  of  $6.2  million  and  $16.0
million,  respectively,  for  the quarter  and  nine  months  ended
September  30, 1996.  This compares with operating income  of  $5.4
million  and $10.3 million, respectively, for the same  periods  in
1995.  The increase in operating income for the three months  ended
September  30, 1996 is primarily due to lower selling, general  and
administrative ("SG&A") expenses partially offset by startup  costs
associated with 27 company-operated centers opened since  June  30,
1996.   Results  for  the  nine months  ended  September  30,  1995
included   net  charges  of  $6.0  million  related  to  litigation
settlements.  Results for the first nine months of 1996 reflect the
first quarter impact of severe winter weather-related costs in  the
northeastern part of the United States where Jiffy Lube has a  high
concentration  of company-operated stores as well  as  the  startup
costs  associated  with 68 company-operated  centers  opened  since
December 31, 1995.  These costs were partially offset by lower SG&A
expenses for the nine month period as compared to the prior year.
     Domestic systemwide sales reported on a comparable store basis
for  the  three  months  ended September 30,  1996  decreased  $4.2
million  and for the nine months ended September 30, 1996 increased
$6.9  million,  from comparable periods in 1995. There  were  1,332
domestic  lube  centers (including 514 Jiffy Lube  company-operated
centers)  open as of September 30, 1996.  Total domestic systemwide
sales  increased 4.9% to $180 million for the quarter and increased
6.4% to $523 million for the nine month period.


<PAGE>
<PAGE>  11

                PART I. FINANCIAL INFORMATION - continued


      Beginning in 1995, Jiffy Lube and the Sears Merchandise Group
("Sears")  agreed  to  open fast-oil change  units  in  Sears  Auto
Centers over a three year period.  Under the agreement, Jiffy  Lube
remodels,  equips and operates service areas within the Sears  Auto
Centers,  while Sears continues to utilize the remaining  bays  for
its operations.  As of September 30, 1996, there were 88 Jiffy Lube
units  open  and  operating within Sears Auto Centers.   Sears  and
Jiffy  Lube  will  continue to review the market  and  work  toward
agreement on the final plans for additional units.

Other

      Other operating income for the quarter and nine months  ended
September   30,   1996  was  $51.6  million  and   $77.4   million,
respectively, compared with $10.5 million and $58.4 million for the
same  periods in 1995.  The increase in other operating income  for
the  quarter  and nine months ended September 30, 1996 compared  to
the  same period in 1995 was primarily due to the gain on the  sale
of   Vermejo   Park   Ranch  and  to  higher   investment   income.
     In  September  1996, Pennzoil completed the sale  of  Vermejo
Park Ranch to Vermejo Park, L.L.C., a Georgia limited liability
company. The  ranch is located in northern New Mexico and southern
Colorado and  is  approximately 578,000 acres.  Pennzoil  recorded
a $41.3 million pretax gain on the sale in the third quarter of 1996.
     Other operating income for the nine months ended September 30,
1995  includes  a   favorable resolution of a Texas  franchise  tax
issue  which resulted in Pennzoil receiving a $23.2 million  refund
in  the  second  quarter of 1995.  In addition,  Pennzoil  received
approximately $1.5 million in interest in 1995 associated with  the
franchise tax refund.
      Pennzoil's  other  income includes dividend  income  of  $9.8
million  and  $27.9 million for the quarter and nine  months  ended
September  30,  1996, respectively, from its investment  in  common
stock  of  Chevron Corporation ("Chevron"). In July  1996,  Chevron
increased the amount of quarterly dividends paid to holders of  its
common  stock  from  $.50 per share to $.54  per  share.   Pennzoil
beneficially  owns approximately 18 million shares of common  stock
of Chevron.
      Net  interest expense for the quarter and nine  months  ended
September  30,  1996  decreased  $4.7  million  and  $6.6  million,
respectively,  from  the same periods in 1995 primarily  due  to  a
reduced  amount  of  outstanding  debt  and  increased  capitalized
interest.


Capital Resources and Liquidity

      Cash  Flow.  As of September 30, 1996, Pennzoil had cash  and
cash  equivalents of $33.1 million.  During the nine  months  ended
September  30,  1996,  cash  and cash  equivalents  increased  $9.5
million.   Cash  flows  from  operating activities  totaled  $340.3
million during the first nine months of 1996.

     Accounts  Receivable. In September 1996, PRC, a  wholly  owned
special purpose subsidiary of  Pennzoil, entered into a receivables
sales facility, which provides for the ongoing sales of up to  $135
million  of  accounts receivable of certain Pennzoil  subsidiaries.
The  facility  expires  in  September  1997.    Sales  of  accounts
receivable  under  this  agreement totaled  $128.0  million  as  of
September   30,  1996.   Pennzoil  used  the  proceeds  to   reduce
outstanding   debt.    Fees  incurred  on  the  sale  of   accounts
receivable were not material in the third quarter of 1996  and  are
included in other income, net.

     Debt Instruments and Repayments. In May 1996, Pennzoil entered
into  a  revolving  credit facility with a  group  of  banks  which
provides  for  up  to  $600 million of unsecured  revolving  credit
borrowings  through  May 1997, with any outstanding  borrowings  at
such  time being converted into a term facility terminating in  May


<PAGE>
<PAGE>  12

             PART I. FINANCIAL INFORMATION - continued


1998.   Pennzoil  has  the  option, subject  to  the  extension  of
additional credit by new or existing banks, to increase the size of
the  facility  by  $100  million.  This revolving  credit  facility
replaces  and supersedes the previous revolving credit facility  of
Pennzoil.  As of September 30, 1996, borrowings under this facility
totaled $75.0 million.
      As  of   September  30,  1996,  borrowings  under  Pennzoil's
commercial  paper and short-term variable-rate credit  arrangements
totaled  $301.2 million, all of which, beginning with the execution
of   the   aforementioned  revolving  credit  facility,  has   been
classified  as long-term debt.  Such debt classification  is  based
upon  the availability of committed long-term credit facilities  to
refinance  such  commercial  paper and  short-term  borrowings  and
Pennzoil's  intent to maintain such commitments in  excess  of  one
year  subject  to  overall  reductions  in  debt  levels.   Similar
borrowings  totaling  $468.9 million were reflected  as  short-term
debt as of December 31, 1995.
     In July 1996, Pennzoil completed the sale of its non-strategic
Canadian oil and gas assets to Gulf Canada.  Pennzoil received  net
proceeds   of  US  $192.8  million,  which  were  used  to   reduce
outstanding   debt  under  Pennzoil's  Canadian  revolving   credit
facilities.
     In   July  1996,  Pennzoil  completed  the   sale   of
approximately  half  of its interest in the ACG  joint  development
unit  offshore  Azerbaijan in the Caspian Sea,  and  in   September
1996, completed the sale of Vermejo Park Ranch.  Pennzoil used  the
proceeds  from  both  of  these sales to partially  fund  its  1996
capital spending program and to reduce outstanding debt.


      Price  Risk Management.  Pennzoil has a price risk management
program  that  permits  utilization  of  agreements  and  financial
instruments  (such  as  futures, forward and option  contracts  and
swaps  and  collars)  to  reduce the price  risks  associated  with
fluctuations  in  crude oil and natural gas  prices.   The  primary
purpose of the program, as it relates to 1996 crude oil and natural
gas  production,  is to help provide Pennzoil with sufficient  cash
from  operations  in  1996  to fund its  capital  spending  program
without  increasing debt.  As of September 30, 1996,  Pennzoil  had
entered   into   transactions  that   committed   an   average   of
approximately 309 MMcf per day of natural gas for the remainder  of
1996  to  be  sold  at  fixed prices (New York Mercantile  Exchange
("NYMEX")-based)  ranging  from $1.76 to  $2.12  per  Mcf,  with  a
weighted  average price of $1.88 per Mcf, and Pennzoil had  entered
into  transactions  that committed an average of  approximately  37
Mbbls per day of crude oil for the remainder of 1996 to be sold  at
fixed prices (NYMEX-based) ranging from $16.75 per barrel to $17.40
per  barrel,  with a weighted average price of $16.94  per  barrel.
Pennzoil has not materially hedged crude oil or natural gas  prices
beyond  1996.   Pennzoil will constantly review and may  alter  its
hedged positions as conditions change.


<PAGE>
<PAGE>  13

                          PART I. FINANCIAL INFORMATION - continued
<TABLE>
                                                        (UNAUDITED)

The following tables show revenues and operating income by segment,
other components of income and operating data.

<CAPTION>
                                                                      Three Months Ended                Nine Months Ended
                                                                         September 30                      September 30
                                                                 ----------------------------      ----------------------------
                                                                    1996             1995             1996             1995
                                                                 -----------      -----------      -----------      -----------
                                                                             (Dollar amounts expressed in thousands)
<S>                                                              <C>              <C>              <C>              <C>
REVENUES
   Oil and Gas                                                   $  186,797       $  166,700       $  566,097       $  557,719
   Motor Oil & Refined Products                                     426,475          380,801        1,258,141        1,159,802
   Franchise Operations                                              78,626           76,791          226,617          216,790
   Other                                                             55,352           15,353           90,640           70,809
   Intersegment sales                                               (93,562)         (39,633)        (263,886)        (123,155)
                                                                 -----------      -----------      -----------      -----------
        Total revenues                                           $  653,688       $  600,012       $1,877,609       $1,881,965
                                                                 -----------      -----------      -----------      -----------


OPERATING INCOME (LOSS)
   Oil and Gas                                                   $   60,715       $   19,548       $  175,522       $   64,931
   Motor Oil & Refined Products                                       9,459           11,891           39,667           39,550
   Franchise Operations                                               6,152            5,416           15,988           10,314
   Impairment of long-lived assets                                     -            (399,830)            -            (399,830)
   Other                                                             51,609           10,475           77,411           58,389
                                                                 -----------      -----------      -----------      -----------
        Total operating income (loss)                               127,935         (352,500)         308,588         (226,646)

Corporate administrative expenses                                    13,413           15,234           39,495           49,418
Interest charges, net                                                43,585           48,322          137,952          144,568
                                                                 -----------      -----------      -----------      -----------
Income (loss) before income tax                                      70,937         (416,056)         131,141         (420,632)

Income tax provision (benefit)                                        5,812         (140,770)          25,704         (143,299)
                                                                 -----------      -----------      -----------      -----------

NET INCOME (LOSS)                                                $   65,125       $ (275,286)      $  105,437       $ (277,333)
                                                                ============     ============      ===========      ===========


RATIO OF EARNINGS TO FIXED CHARGES                                                                       1.76             -
                                                                                                   ===========      ===========
AMOUNT BY WHICH FIXED CHARGES EXCEED EARNINGS                                                      $      -         $  424,080
                                                                                                   ===========      ===========
</TABLE>


<PAGE>
<PAGE>  14

                                 PART I. FINANCIAL INFORMATION - continued
<TABLE>
                                                          (UNAUDITED)

<CAPTION>
                                                                    Three Months Ended                   Nine Months Ended
                                                                       September 30                         September 30
                                                               ------------------------------      ------------------------------
                                                                   1996              1995              1996              1995
                                                               ------------      ------------      ------------      ------------
<S>                                                            <C>               <C>               <C>               <C>
OPERATING DATA
--------------

OIL AND GAS
  Net production
    Crude oil, condensate and natural
      gas liquids (barrels per day)                                58,442            64,604            61,274            69,139
    Natural gas produced for sale (Mcf per day)                   599,615           662,923           595,967           687,863

  Weighted average prices
    Crude oil, condensate and natural
      gas liquids (per barrel)                                 $    14.85        $    14.00        $    14.85        $    14.46
    Natural gas (per Mcf)                                      $     1.80        $     1.32        $     1.81        $     1.39


MOTOR OIL & REFINED PRODUCTS
  Sales (barrels per day)
    Gasoline and naphtha                                           21,332            19,586            21,043            20,168
    Distillates and gas oils                                       25,984            24,681            26,711            27,148
    Lubricating oil and other specialty products                   24,638            22,156            23,768            23,435
    Residual fuel oils                                              4,221             3,140             4,120             3,654
                                                               -----------       -----------       -----------       -----------
          Total sales (barrels per day)                            76,175            69,563            75,642            74,405
                                                               ===========       ===========       ===========       ===========

  Raw materials processed (barrels per day)                        54,330            50,650            53,302            53,492

  Refining capacity (barrels per day)                              62,700            62,700            62,700            62,700

FRANCHISE OPERATIONS
  Domestic systemwide sales (in thousands)                     $  179,980        $  171,627        $  523,394        $  491,839
  Same center sales (in thousands)                             $  166,658        $  170,884        $  495,295        $  488,355
  Centers open (U.S.)                                               1,332             1,165             1,332             1,165


</TABLE>


<PAGE>
<PAGE>  15


                            SIGNATURE



          Pursuant to the requirements of the Securities Exchange
Act  of  1934, the Registrant has duly caused this report  to  be
signed   on   its  behalf  by  the  undersigned  thereunto   duly
authorized.




                                   PENNZOIL COMPANY
                                      Registrant




                                   S/N Michael J. Maratea
                                   Michael J. Maratea
                                   Vice President and Controller




November 12, 1996