Oil and Honor: THE TEXACO-PENNZOIL WARS by Thomas Petzinger Jr. (Putnam’s: $19.95; 486 pp.)

The questions before the jury in Pennzoil Co. vs. Texaco Inc., 151st Judicial District, Harris County, Tex., were three: (1) Did Pennzoil have an initial agreement to buy shares in Getty Oil? (2) Did Texaco knowingly interfere with this agreement? (3) If so, what sum of money would compensate Pennzoil for its damages?

The jury answered yes to the first two questions, and to No. 3:

“Seven billion, five hundred thirty million, as its actual damages, plus $3 billion in punitive damages, plus interest, for a grand total of $11,120,976,110.83.

“Judge Casseb signed the judgment with a 39-cent ball-point pen and, in barely a moment, was gone, leaving the courtroom, and the world, in a state of disbelief.”

No one’s disbelief was greater than that of the Wall Street Journal’s man in Houston, who had been chronicling the case for an oil industry series that won him a Pulitzer Prize nomination. The jolt of what he considered to be a 39-cent decision charged him to search and research the truth behind it, walking in at least 45 men’s moccasins via long interviews, and living through the trials or transcripts of the 19 separate legal cases the Pennzoil-Texaco dispute generated.

If anyone ever had the golden opportunity to write the great American nonfiction novel, it would be this man: Thomas Petzinger Jr., local deputy bureau chief for the leading U.S. financial newspaper on the scene when and where the world’s biggest damages were awarded in a case involving one of oil’s oldest fortunes in the nation’s single most controversial business activity.

Yet even in the hands of an honest craftsman like Petzinger, this peculiarly American genre of writing fails to deliver the impossible product it promises: a work confined to facts that nonetheless works as a narrative. Facts will not be made to act that way.

Some facts lock themselves in the future beyond the reach of the narrative. Unable to know in advance that Casseb’s verdict would be upheld in nine subsequent trials, Petzinger chooses the unifying theme of Rebel vs. Yankee, with the emphasis on Rebel. “When the Old Good-Ol’ Boys of Texas hauled the New Good-Ol’ Boys of Wall Street before a home-town jury, the outcome was almost inevitable.”

Other facts stop the narrative. This is the effect of the book’s otherwise fascinating Part One; “The Men.” One by one, we are introduced to them: “The Founders”--Old Man J. Paul Getty, tomcatting founder of an oil company and museum bearing his name; Good-Ol’Boy J. Hugh Liedtke, beer-drinking builder of Pennzoil; epithetless John McKinley, vice-free chairman of Texaco; and then “The Sons,” the Getty sons: three down--one by suicide, one by disinheritance, one by drug addiction--and one to go, dreamy Gordon, 40% owner of the Getty Trust, now head-to-head with “The Managers”--competent Getty Oil President Sid Petersen and careful Getty Museum head Harold (SEC) Williams; and finally for each party an investment banker: eye-fluttering (signifies disdainful) Geoff Boisi of Goldman Sachs for Petersen; brainy Bruce Wasserstein of First Boston for McKinley; and for Gordon, Kidder Peabody’s darkly handsome Marty Siegel.

The Marty Siegel? Uh-oh. Another narrative problem: Petzinger’s draft was completed before Wall Street’s insider trading scandals broke, so the best the author and publisher could do, just before printing, was insert a page that reads:

“In November, 1986, Marty Siegel was visiting Marty Lipton when a federal marshal invaded the premises. He handed a subpoena to Siegel, who burst into tears. The jig was up.

“It had been Marty Siegel, the government would claim, who had tipped off takeover speculator Ivan Boesky to the tension building in Getty Oil. . . .”

Although this reality meteorite does not devastate Petzinger’s book (as it did Boesky’s, whose “Merger Mania” had to be recalled), it does compromise it. Prior to this insert, Petzinger had made no attempt to portray Siegel’s character, restrained as he was by the boundaries of his genre. Siegel had not granted an interview with Petzinger, nor had he apparently with any previous reporter. Deprived of fact by his source and of speculation by his genre, Petzinger was reduced to describing Siegel’s appearance.

But even when Petzinger got his interviews, and intimate ones (the book’s extremely candid quotes prove that he achieved rapport with players on both sides), he was constrained by the rules of his poesy. Like Homer’s Achilles and Odyssey, as appraised by the great philologist Erich Auerbach, Petzinger’s characters “are splendidly described in many well-ordered words; epithets cling to them, their emotions are constantly displayed in their words and deeds--but they have no development.” A striking example is Gordon Getty, the book’s main character, who remains an idiot-savant throughout.

In Parts Two “The Deals” and Three “The Case,” Petzinger describes an intricate network of business relationships, financial negotiations, and juridical maneuvering with playwright’s omniscience and an actor’s verve. Liedtke’s attorney Joe Jamail never confers with his “oil patch” client unless it’s over drinks, while McKinley’s “white shoe” attorney Dick Miller enters coffee in hand. Jury ringleader Jim Shannon is a “died-in-the-wool survivor of the sixties”--hardly one who inspires confidence for a case of the 1980s.

But this was indeed a case for the 1980s, and its impact will be lasting. During the last decade, the volume of major merger activity has more than doubled, from 1,500 (million-dollar-plus) deals in 1980 to 4,000 last year, while their total value has quintupled--from $33 billion in 1980 to $190 billion last year. One reason for this growth is the increased ability and eagerness of lenders to lend and advisers to advise. A book unhampered by twin constraints of nonfiction fact and novelistic flow might have decried the lure of cash and counsel to those who would make sleeping dogs into stars. Or exposed something else systemic--anything!

The managers of Getty, Pennzoil, and Texaco, and the professionals who served them (Siegel aside), were just doing their jobs--maximizing shareholder wealth. Yet their actions had the opposite effect: Texaco has filed for Chapter 11, and Pennzoil is just another member of the creditor’s committee. And their share prices? Texaco’s has dropped nearly 65% this year, and Pennzoil’s is ominously still.

Clearly, in the invisible realms beyond the facts and form of “Oil and Honor,” something is terribly wrong. Petzinger may sense it; but if he can’t show it, he won’t tell it. The burden of the Pennzoil-Texaco paradox is too great for the tenuous frame of a nonfiction novel, even one written by a master like Thomas Petzinger Jr.