U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB
                                   (Mark One)

QUARTERLY  REPORT UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
1934
                 For the quarterly period ending March 31, 2003


TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
1934

     For the transition period from __________________ to __________________


                         Commission file number 0-29613
                                                -------

                         TIDELANDS OIL & GAS CORPORATION
          ------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)


           NEVADA                                       66-0549380
-------------------------------             ------------------------------------
   (State of Incorporation)                  (IRS Employer Identification No.)



13330 Leopard St., Corpus Christi, TX                     78410
-------------------------------------       -----------------------------------
(Address of principal executive offices)                (Zip Code)



Issuer's telephone number,(   361    )      241       -          2244
                           -----------  -------------   -----------------------

                 9309 North Star Road, Corpus Christi, TX 78409
          -------------------------------------------------------------
          Former Name, former address and former fiscal year if changed
                                since last report

         Indicate  by check  mark  whether  the  issuer  (1) filed  all  reports
required to be filed by Section 13 or 15(d) of the  Exchange Act during the past
12 months (or for 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
            ---   ---


         State the number of shares outstanding of each of the issuer's class of
common  equity,  as of the latest  practicable  date: As of March 31, 2003,  the
registrant had 35,146,829 shares of common stock, par value .001 outstanding.

         Transitional Small Business Disclosure Format
         (Check One)
         Yes      No
             ---     ---

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
                                   FORM 10-QSB


                                      INDEX
                                      -----

                                                                            Page
PART I - Financial Information

Item 1 - Financial Statements
         Condensed Consolidated Balance Sheets as of
         March 31, 2003 and December 31, 2002............................... 3-4

         Condensed Consolidated Statements of Operations
         For the Three Months Ended March 31, 2003 and 2002.................   5

         Condensed Consolidated Statements of Cash Flows
         For the Three Months Ended March 31, 2003 and 2002................. 6-7

         Notes to Condensed Consolidated Financial Statements...............8-12

Item 2 - Management's Discussion and Analysis or Plan of Operation..........  13

Item 3 - Controls and Procedures............................................  15

PART II - Other Information

Item 1 - Legal Proceedings .................................................  14

Item 2 - Changes in Securities and Use of Proceeds..........................  14

Item 3 - Defaults Upon Senior Securities....................................  14

Item 4 - Submission of Matters to a Vote of Security Holdings...............  14

Item 5 - Other Information..................................................  14

Item 6 - Exhibits and Reports on Form 8K ...................................  14


Signature...................................................................  15








                                      - 2 -



<PAGE>

                          PART I-FINANCIAL INFORMATION

Item 1.  Financial Statements.  (Unaudited)

                         TIDELANDS OIL & GAS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS





                                     ASSETS
                                     ------



                                         March 31, 2003        December 31, 2002
                                       -----------------       -----------------
                                          (Unaudited)
Current Assets:
      Cash                             $         212,316       $         193,669
      Accounts Receivable                            887                  16,306
      Inventory                                   12,155                  12,155
      Prepaid Expenses                            39,150                  43,601
                                       -----------------       -----------------
         Total Current Assets                    264,508                 265,731
                                       -----------------       -----------------

Property Plant and Equipment, Net              1,091,423               1,111,617
                                       -----------------       -----------------

Other Assets:
      Deposits                                     1,183                   1,995
                                       -----------------       -----------------

         Total Assets                  $       1,357,114       $       1,379,343
                                       =================       =================



















      See Accompanying Notes to Condensed Consolidated Financial Statements
                                       -3-


<PAGE>
<TABLE>
<CAPTION>

                         TIDELANDS OIL & GAS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (CONTINUED)


                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)
                     ---------------------------------------


                                                       March 31, 2003     December 31, 2002
                                                     -----------------    -----------------
                                                        (Unaudited)
<S>                                                  <C>                  <C>
Current Liabilities:
      Accounts Payable and
          Accrued Expenses                           $       1,375,590    $       1,369,220
      Current Maturities of Long-Term Debt                     826,691              826,691
                                                     -----------------    -----------------
         Total Current Liabilities                           2,202,281            2,195,911

Long-Term Debt                                                       0                    0

Due to Related Parties                                       1,776,249            1,719,362
                                                     -----------------    -----------------

         Total Liabilities                                   3,978,530            3,915,273
                                                     -----------------    -----------------

Commitments and Contingencies                                     --                   --

Stockholders' (Deficit):
      Common Stock, $.001 par value per share,
        100,000,000 shares authorized;
        35,146,829 shares issued and
        outstanding March 31, 2003
        33,683,329 shares issued and outstanding
        December 31, 2002                                       35,148               33,684

Additional Paid-in Capital                                   6,935,441            6,715,108
Subscriptions Receivable                                       (18,000)             (18,000)
Accumulated (Deficit)                                       (9,574,005)          (9,266,722)
                                                     -----------------    -----------------

         Total Stockholders' (Deficit)                      (2,621,416)          (2,535,930)
                                                     -----------------    -----------------

         Total Liabilities and
              Stockholders' (Deficit)                $       1,357,114    $       1,379,343
                                                     =================    =================
</TABLE>









      See Accompanying Notes to Condensed Consolidated Financial Statements
                                       -4-

<PAGE>
<TABLE>
<CAPTION>

                         TIDELANDS OIL & GAS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                  Three Months Ended     Three Months Ended
                                                    March 31, 2003         March 31, 2002*
                                                  ------------------     ------------------
<S>                                               <C>                    <C>
Revenues:
      Gas Processing Sales                        $                0     $          138,246
      Other                                                    5,265                  2,343
                                                  ------------------     ------------------
           Total Revenues                                      5,265                140,589
                                                  ------------------     ------------------

Operating Expenses:
      Purchases                                                    0                 89,824
      Operating Expenses                                       5,425                 53,107
      Depreciation, Depletion & Amortization                  10,656                 11,051
      Interest                                                25,675                 21,017
      Officers & Directors Salaries & Fees                    75,000                 75,000
      General and Administrative                             195,792                172,697
                                                  ------------------     ------------------
         Total Operating Expenses                            312,548                422,696
                                                  ------------------     ------------------
(Loss) From Continuing Operations                           (307,283)              (282,107)
       (Loss) From Discontinued Operations
        (Note 2)                                                   0                (96,196)
                                                  ------------------     ------------------
Net (Loss)                                        $         (307,283)    $         (378,303)
                                                  ==================     ==================

Net (Loss) Per Common Share
      Basic
      Loss From Continuing Operations             $           (0.009)    $           (0.010)
      Loss From Discontinued Operations                       (0.000)                (0.004)
                                                  ------------------     ------------------
         Total                                    $           (0.009)    $           (0.014)
                                                  ==================     ==================
Weighted Average Number of Common
      Shares Outstanding, Basic                           34,415,079             26,164,900
                                                  ==================     ==================

      Diluted
      Loss From Continuing Operations             $           (0.009)    $           (0.010)
      Loss From Discontinued Operations                       (0.000)                (0.004)
                                                  ------------------     ------------------
         Total                                    $           (0.009)    $           (0.014)
                                                  ==================     ==================
Weighted Average Number of Common
   Shares Outstanding, Diluted                            35,415,079             26,189,900
                                                  ==================     ==================
</TABLE>


*The statement of  consolidated  operations for the three months ended March 31,
2002 has been reclassified to conform with the December 31, 2002 presentation.






      See Accompanying Notes to Condensed Consolidated Financial Statements
                                       -5-


<PAGE>
<TABLE>
<CAPTION>

                         TIDELANDS OIL & GAS CORPORATION
                 STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
                                   (UNAUDITED)

                                                         Three Months Ended    Three Months Ended
                                                           March 31, 2003        March 31, 2002
                                                         ------------------    ------------------
 <S>                                                      <C>                   <C>
Cash Flows Provided (Required) By
  Operating Activities:
    Net (Loss)
      Continuing Operations                              $          (307,283)  $         (282,107)
      Discontinued Operations                                             0               (96,196)
    Adjustments to Reconcile Net (Loss)
           to Net Cash Provided (Required) By
          Operating Activities:

    Depreciation, Depletion and Amortization
         Continuing Operations                                       10,656                11,051
         Discontinued Operations                                          0                 6,782
     Issuance of Common Stock
            For Services Provided                                   109,297                78,706
     Officers' Salaries                                              60,000                60,000
   Changes in
            Accounts Receivable                                      15,419                (1,200)
  Inventory                                                               0                  (757)
              Prepaid Expenses                                        4,451               (40,100)
       Other Assets                                                     812                   125
       Accounts Payable and
              Accrued Expenses                                       68,870               (83,591)
                                                         ------------------    ------------------

Net Cash (Required)
   by Operating Activities                                          (37,778)             (347,287)
                                                         ------------------    ------------------

Cash Flows Provided (Required)
  By Investing Activities:
      Acquisitions of Property, Plant & Equipment                   (92,789)             (121,538)
      Proceeds From Disposals of Property, Plant
        and Equipment                                               102,327                     0
                                                         ------------------    ------------------

         Net Cash Provided (Required)
            by Investing Activities                                   9,538              (121,538)
                                                         ------------------    ------------------
</TABLE>








      See Accompanying Notes to Condensed Consolidated Financial Statements
                                       -6-

<PAGE>
<TABLE>
<CAPTION>

                         TIDELANDS OIL & GAS CORPORATION
                 STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS
                                   (UNAUDITED)

                                   (CONTINUED)

                                                      Three Months      Three Months
                                                          Ended             Ended
                                                     March 31, 2003    March 31, 2002*
                                                     --------------    --------------
<S>                                                  <C>                <C>
Cash Flows Provided (Required)
   by Financing Activities:
      Proceeds from Issuance of Common Stock                 50,000                 0
      Proceeds from Long-Term Loans                               0           131,983
      Repayment of Short-Term Loans                               0          (205,546)
      Proceeds of Loans from Related Parties                 53,654           282,563
      Repayment of Loans from Related Parties               (56,767)                0
                                                     --------------    --------------

Net Cash Provided by Financing Activities                    46,887           209,000
                                                     --------------    --------------

Net Increase (Decrease) in Cash                              18,647          (259,825)
Cash at Beginning of Period                                 193,669           397,491
                                                     --------------    --------------
Cash at End of Period                                $      212,316    $      137,666
                                                     ==============    ==============

Supplemental Disclosures of
   Cash Flow Information
      Cash Payments for Interest                     $          659    $       11,772
                                                     ==============    ==============

      Cash Payments for Income Taxes                 $            0    $            0
                                                     ==============    ==============
Non-Cash Financing Activities:
   Issuance of Common Stock:
      Operating Activities                           $      109,297    $       78,706
       Payment of Accounts Payable                           62,500                 0
      Prepayment of Consulting Contract                           0           788,334
      Prepayment of Financing Fee                                 0           832,000
                                                     --------------    --------------


      Total Non-Cash Financing Activities            $      171,797    $    1,699,040
                                                     ==============    ==============
</TABLE>




*The statement of  consolidated  cash flows for the three months ended March 31,
2002 has been reclassified to conform with the December 31, 2002 presentation.


      See Accompanying Notes to Condensed Consolidated Financial Statements
                                       -7-

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




NOTE 1 - BASIS OF PRESENTATION
------   ---------------------

         The accompanying  unaudited condensed consolidated financial statements
         for the three  month  periods  ended  March 31, 2003 and 2002 have been
         prepared in conformity with accounting principles generally accepted in
         the United States of America for interim financial information and with
         the  instructions  to Form 10-QSB and  Regulation  S-B.  The  financial
         information  as of December 31, 2002 is derived  from the  registrant's
         Form 10-KSB for the year ended December 31, 2002.  Certain  information
         or  footnote  disclosures  normally  included in  financial  statements
         prepared in accordance with accounting principles generally accepted in
         the United States of America have been condensed or omitted pursuant to
         the rules and regulations of the Securities and Exchange Commission.

         The  preparation of financial  statements in conformity with accounting
         principles  generally accepted in the United States of America requires
         management to make estimates and  assumptions  that affect the reported
         amounts  of  assets  and  liabilities  at the  date  of  the  financial
         statements and the reported amounts of revenues and expenses during the
         reporting period. Actual results could differ from those estimates.  In
         the  opinion  of  management,  the  accompanying  financial  statements
         include all adjustments  necessary (which are of a normal and recurring
         nature) for the fair presentation of the results of the interim periods
         presented. While the registrant believes that the disclosures presented
         are  adequate  to keep the  information  from being  misleading,  it is
         suggested  that  these  accompanying  financial  statements  be read in
         conjunction  with  the  registrant's  audited  consolidated   financial
         statements and notes for the year ended December 31, 2002,  included in
         the registrant's Form 10-KSB for the year ended December 31, 2002.

         Operating  results for the three-month  period ended March 31, 2003 are
         not necessarily  indicative of the results that may be expected for the
         remainder of the fiscal year ending December 31, 2003. The accompanying
         unaudited  condensed  consolidated  financial  statements  include  the
         accounts  of the  registrant  and its  wholly-owned  subsidiaries.  All
         significant   inter-company   accounts  and   transactions   have  been
         eliminated in consolidation.










                                       -8-
<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - DISCONTINUED OPERATIONS - RELATED PARTY TRANSACTIONS
------   ----------------------------------------------------

         As a result of management  activities,  the Company  segregated  losses
         from  discontinued  operations  for its  December  31,  2002  financial
         statements.   Accordingly,  we  have  restated  herein,  the  Condensed
         Consolidated  Statement of Operations  for the three months ended March
         31, 2002 to reflect these losses from discontinued operations.

         On February 18, 2003,  effective January 1, 2003, the Company sold 100%
         of the  outstanding  common  stock of  Tidelands  Gas  Corporation  and
         Tidelands Oil Corporation to an officer of the Company for the net book
         value of $48,471.

                                                           Tidelands Oil Corp &
                                                            Tidelands Gas Corp.
                                                             At January 1, 03
                                                           --------------------
         Cash and Cash Equivalents                         $                238
         Receivables                                                     15,419
         Inventories                                                          0
         Property, Plant, and Equipment (net)                           102,327
         Other Assets                                                     5,263
                                                           --------------------
              Total Assets                                              123,247
         Accounts Payable and Accrued Expenses                          (74,776)
         Notes Payable                                                        0
         Other Current Liabilities                                            0
         Long-Term Debt                                                       0
                                                           --------------------
              Net Assets (Deficit)                         $             48,471
                                                           ====================

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
------   -----------------------------

         A summary of  property,  plant and  equipment  at March 31,  2003 is as
         follows:


                                                                     Estimated
                                                                   Economic Life
                                                                   -------------
         Pre-Construction Costs-
           International Crossing                   $  594,109*          N/A
         Equipment and
           Leasehold Improvements                       13,788      3-10 Years
         Pipelines                                     431,560**      15 Years
         Processing Plant                              166,410**      15 Years
                                                    ----------
              Total                                  1,205,867
         Less Accumulated Depreciation                 114,444
                                                    ----------
              Total                                 $1,091,423
                                                    ==========

         *Non-depreciated   asset  sold  in  subsequent  period  -  see  Note  6
         Subsequent Events
         **Collateral for secured note payable.

                                      -9-
<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LITIGATION
------   ----------

         On January 6, 2003,  the Company was served as a third party  defendant
         in a lawsuit titled Northern  Natural Gas Company vs. Betty Lou Sheerin
         vs. Tidelands Oil & Gas Corporation, ZG Gathering, Ltd. and Ken Lay, in
         the 150th Judicial District Court,  Bexar County,  Texas,  Cause Number
         2002-C1-16421.  the lawsuit was initiated by Northern  Natural Gas when
         it sued Betty Lou Sheerin  for her  failure to make  payments on a note
         she executed  payable to Northern in the original  principal  amount of
         $1,950,000.  Northern's  suit was filed on November 13,  2002.  Sheerin
         answered  Northern's  lawsuit  on January  6,  2003.  Sheerin's  answer
         generally denied Northern's claims and raised the affirmative  defenses
         of fraudulent inducement by Northern,  estoppel, waiver and the further
         claim that the note does not comport with the legal  requirements  of a
         negotiable instrument. Sheerin seeks a judicial ruling that Northern be
         denied  any  recovery  on  the  note.   Sheerin's   answer  included  a
         counterclaim  against  Northern,  ZG  Gathering,  and Ken Lay generally
         alleging, among other things, that Northern, ZG Gathering, Ltd. and Ken
         Lay, fraudulently induced her execution of the note. Northern has filed
         a general denial of Sheerin's counterclaims.  Sheerin's answer included
         a third party cross claim against Tidelands. She alleges that Tidelands
         entered into an agreement to purchase the Zavala  Gathering System from
         ZG Gathering , Ltd.  and that,  as a part of the  agreement,  Tidelands
         agreed to satisfy  all of the  obligations  due and owing to  Northern,
         thereby relieving Sheerin of all obligations she had to Northern on the
         promissory  note in question.  She alleges that  Tidelands is liable to
         her for all of her  actual  damages,  costs of the  lawsuit  and  other
         unstated  relief.  Tidelands and Sheerin agreed to delay the Tideland's
         answer  date  in  order  to  allow  time  for  mediation  of the  case.
         Tideland's  participated in a mediation on March 11, 2003. The case was
         not settled at that time. Tideland's answered the Sheerin suit on March
         26,  2003...Tideland's  answer denies all of Sheerin's allegations.  No
         discovery   has  been   completed  at  this  time.   Based  on  initial
         investigations,   however,  Tidelands  appears  to  have  a  number  of
         potential  defenses  to  Sheerin's  claims  and  Tidelands  intends  to
         aggressively defend the lawsuit.

         In September  2002, as a pre-closing  deposit to the purchase of the ZG
         pipelines,  the Company executed a $300,000 promissory note to Betty L.
         Sheerin,  a partner of ZG  Gathering,  Ltd.  In  addition,  the Company
         issued  1,000,000  shares of its  restricted  common  stock to  various
         partners  of  ZG  Gathering,   Ltd.  The  company   believes  that  the
         aforementioned  promissory  note and shares of restricted  common stock
         will be cancelled  based upon the outcome of the  litigation  described
         above.







                                      -10-

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LITIGATION (CONTINUED)
------   ----------------------

         On December  23,  2002,  the  Company  was served as a  defendant  in a
         lawsuit  titled  El  Viejo  Ranch,   Ltd.  vs.   Tidelands  Oil  &  Gas
         Corporation,  in the 293rd Judicial  District,  Zavala  County,  Texas,
         Cause  Number  02-12-10606-ZCV.  The lawsuit was  initiated by El Viejo
         Ranch,  Ltd. on December 10, 2002.  El Viejo  contends  that a pipeline
         right of way  agreement  was breached as a result of certain  insurance
         coverage,  required to be maintained under the right-of-way  agreement,
         being allowed to lapse  resulting in  termination  of the  right-of-way
         easement.  El Viejo seeks a declaratory  judgment that the right-of-way
         agreement was properly terminated, that Tidelands is obligated to cease
         use of the pipeline,  reconvey the easement to El Viejo,  to remove the
         pipeline,  and to  remediate  the  property.  El  Viejo  also  seeks  a
         temporary injunction to enjoin Tidelands' use of the easement,  damages
         in an  unstated  amount and  recovery  of  attorneys'  fees.  Tidelands
         answered  the El Viejo  lawsuit  in early  February,  2003.  Tidelands'
         answer denies all of El Viejo's allegations.

NOTE 5 - OTHER
------   -----

         On  February  4,  2003,  the  company  issued  200,000  shares  of  its
         restricted common stock for $50,000.

         On February 6, 2003,  the Company  authorized  the  issuance of 500,000
         shares of its common  stock valued at $62,500 to payment of prior legal
         fees.

         On February 24, 2003,  issued 163,500  shares of its restricted  common
         stock for an employee bonus valued at $15,697.

         On March  10,  2003  issued  stock  options  for  2,000,000  shares  of
         restricted common stock at $.22 per share, expiring March 10, 2005.

         On March 10,  2003,  the Company  approved  the  issuance of  3,596,169
         shares  of  common  stock  for  officers'  accrued  salaries  valued at
         $791,157.

         On March 31, 2003,  the company issued 600,000 shares of its restricted
         common stock for consulting fees valued at $93,600.

NOTE 6 - SUBSEQUENT EVENTS
------   -----------------

         In  April  2003,  the  Company  completed  negotiations,  with  several
         entities  hereafter known as Impact Energy Services  (Impact),  for the
         sale of 75% interest of Reef International, LLC and Reef Marketing, LLC
         for $1,960,867.  In addition, Impact will contribute additional funding
         up to $6,039,133  for the  construction  of our multiple  international
         pipelines from South Texas to Mexico.


                                      -11-

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6 - SUBSEQUENT EVENTS (CONTINUED)
------   -----------------------------

         Upon the commencement of operations, the pipeline will be owned by Reef
         Ventures,  L.P. (a Texas limited  partnership) of which Tidelands Oil &
         Gas  Corporation  will hold a 25%  interest.  During  the  construction
         period  of the  natural  gas  pipeline,  the  Company  will  receive  a
         management  fee of $155,000,  and an  additional  management  fee to be
         determined  during the construction  period of the "liquids"  pipeline.
         After the  construction  period the Company  will be a limited  partner
         with no direct management responsibilities for the limited partnership.
         Impact will receive a priority return of 150% of all actual  investment
         in the project before other partners receive their respective shares.

         In addition,  "Impact" has received the right for two years to purchase
         restricted  common stock of the Company equal to 19% of the outstanding
         shares of the common stock of the Company. The initial number of shares
         is 6,830,000 at a maximum cost of $.35 per share.






























                                      -12-


<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation.

Business Overview

         Tidelands Oil & Gas Corporation (the  "Company"),  formerly known as C2
Technologies,  Inc., was  incorporated  under the laws of the State of Nevada on
February 25, 1997. C2 Technologies, Inc. changed its name to Tidelands Oil & Gas
Corporation  on  November  19,  1998.  The Company  has six  subsidiaries  named
Tidelands Oil Corporation  (TOC) and Tidelands Gas Corporation  (TGC), Rio Bravo
Energy, LLC, Sonora Pipeline,  LLC, Reef  International,  LLC and Reef Marketing
LLC.

         The Company's  plan of operations  has been  refocused  towards our gas
processing plant and pipeline interest along with a new  international  pipeline
crossing.

         Tidelands Oil Corporation  was formed in May 1985.  Since inception and
through the second quarter of 2001, Tidelands Oil Corporation had devoted all of
its  efforts to  acquiring  control of leases  which  comprised a portion of the
Sacatosa Field in Maverick County,  Texas.  The Company  discontinued all of its
activities related to oil and gas producing  properties during 2001.  Management
proceeded  to  dispose  all  Company  interests  in its oil and gas  properties,
terminated all leases,  disbanded all joint ventures and settled  related claims
and disputes.  After liquidating all of the properties  Tidelands sold Tidelands
Oil Corporation for book value to Royis Ward a director of the company.

         Tidelands Gas Corporation was formed on August 29, 1996.  Tidelands Gas
Corporation was formed primarily for the purpose of acquiring the Delhi Pipeline
System for use as a gas  transportation  outlet  for the  shallow  gas  reserves
underlying  Tideland's  leases.  After  liquidating  all of the oil & gas leases
Tidelands elected to sell Tidelands Gas to Royis Ward for book value.

         Tidelands Oil & Gas Corporation  organized two Texas Limited  Liability
companies, Rio Bravo Energy, LLC and Sonora Pipeline, LLC.

         Rio Bravo  Energy,  LLC was  formed on August 10,  1998.  It was formed
primarily to operate the Chittim Gas Processing  Plant.  Rio Bravo Energy,  LLC.
purchased  the Chittim gas  processing  plant from Conoco,  Inc.  This plant was
purchased  by Rio Bravo in 1999 and  processed  natural  gas from  Conoco  Oil's
Sacatosa Field which consists of approximately 3000 wells. The gas plant has the
capability  to  fractionate  the natural gas into  commercial  grade propane and
butane. However in October 2002 Rio Bravo temporarily shut down the plant due to
low volume of gas and plans to reopen the plant sometime in the third quarter of
2003  utilizing  gas  produced  from third party  producers  before going to our
international  crossing.  This would  maximixe all of the capacity of the plant.
Therefore  allowing more liquids to be stripped from the gas, thus complimenting
our propane/butane terminal and crossing into Mexico.

         Sonora  Pipeline,  LLC  was  formed  in  January  1998.  It was  formed
primarily to operate the Sonora pipeline  network which delivers  natural gas to
the Rio Bravo Chittim Gas Processing  Plant.  Sonora's pipeline network consists
of approximately 80 miles of gas pipeline.

         Sonora will transport gas produced from other  operators in the area to
the Rio Bravo gas plant.  Rio Bravo will operate the gas plant.  It will process
the natural gas into gas products such as natural gasoline, propane, butane. Rio
Bravo will also market the gas products.

         Rio Bravo intends to ship all propane and butane products to Mexico and
to sell natural  gasolines to domestic  customers.  We believe the plant will be
operating at full capacity  with our  fractionating  facilities  also running at
maximum capacity.

         The Texas Railroad Commission  regulates all aspects of the production,
transportation and processing of petroleum products.

         Reef International,  LLC was formed to obtain permits and construct two
international  pipeline  crossings between Texas and Mexico.  The pipelines when
constucted will transport natural gas to Piedra Negras,  Mexico for distribution
by CONAGAS (Cianacional DE Gas, S.A. DE C.V.). Reef intends to transport propane
and butane into Mexico via its  propane/butane  terminal to be constucted on the
U.S.  side of the river.  Reef has been  successful  in  obtaining  presidential
permits  for  both  the  natural  gas  and  the  propane/butane  crossigs.  Reef
Marketing,  LLC  was  formed  as a  marketing  company  to  market  all  gas and
propane/butane into Mexico.


                                      -13-
<PAGE>

As previously  disclosed in our quarterly report for the period ending September
30, 2002, we executed a Purchase and Sale Agreement with ZG Gathering,  Ltd. for
the purpose of acquiring  their  pipeline  system.  Although,  the agreement was
formally  executed,  ZG failed to deliver us  control  of the  pipeline  system,
including,  but not limited to,  financial  and other  records  necessary to the
operation of the system,  including  monthly  revenues.  We are seeking judicial
rescission and cancellation of the purchase and sale agreement.

RESULTS OF OPERATIONS

REVENUES: The Company reported revenues of $5,265 from continuing operations for
the three months ended March 31, 2003 as compared with revenues from  continuing
operation's  of $140,589 for the three months ended March 31, 2002.  The revenue
reductions were due to the temporary closing of our Gas Processing Plant.

TOTAL COSTS AND EXPENSES:  Total costs and expenses from  continuing  operations
decreased  from  $422,696  for the three months ended March 31, 2002 to $312,548
for the three months ended March 31, 2003.

COST OF  SALES:  The  cost  of  sales  (purchases)  from  continuing  operations
decreased  from $89,824 for the three months ended March 31, 2002 to -0- for the
three  months  ended March 31,  2003.  The  reduction  of $89,824 was due to the
temporary closing of our Gas Processing Plant.

OPERATING  EXPENSES:   Other  operating  expenses  from  continuing   operations
decreased  from  $53,107 for the three months ended March 31, 2002 to $5,425 for
the three months  ended March 31,  2003.  The decrease of $47,682 was due to the
temporary closing of our Gas Processing Plant.

SELLING GENERAL AND ADMINISTRATIVE EXPENSES:  Selling general and administrative
expenses from continuing operations increased from $172,697 for the three months
ended March 31, 2002 to $195,792 for the three months ended March 31, 2003.  The
increase of $23,095 was primarily due to increased consulting fees.

INCOME TAX:  The pre-tax loss  decreased  from  ($378,303)  for the three months
ended March 31, 2002 to ($307,283)  for the three months ended March 31, 2003; a
decrease of $71,020.

LIQUIDITY AND CAPITAL RESOURCES:  Capital  expenditures  during the three months
ended March 31, 2003  totaled  $92,789 as compared  with  $121,538 for the three
months ended March 31, 2002. The decrease of $28,749 consists primarily of lower
pre-construction costs regarding our proposed international crossing to Mexico.

Total debt increased from $3,915,273 at December 31, 2002 to $3,978,530 at March
31, 2003 of which $1,483,160 was unpaid officers and director's  salaries,  fees
and expense  reimbursements and $293,089 was loans from officers.  Total debt as
of March 31, 2003 and December 31, 2002  expressed as a percentage of the sum of
total debt and shareholders' equity was 293.2% and 283.6% respectively.

Net loss for the three months ended March 31, 2003 was  ($307,283) a decrease of
18.8% from the net loss of  ($378,303)  for three  months  ended March 31, 2002.
Diluted net loss per common  share  decreased  35.7% to  ($0.009)  for the three
months ended March 31, 2003.  The net loss per share  calculation  for the three
months ended March 31, 2003 included an increase in actual and equivalent shares
outstanding.

FORWARD-LOOKING STATEMENTS:

We have included  forward-looking  statements in this report.  For this purpose,
any  statements  contained in this report that are not  statements of historical
fact may be  deemed to be  forward  looking  statements.  Without  limiting  the
foregoing,  words  such as "may",  "will",  "expect",  "believe",  "anticipate",
"estimate",  "plan" or "continue" or the negative or other variations thereof or
comparable  terminology  are  intended to identify  forward-looking  statements.
These statements by their nature involve  substantial  risks and  uncertainties,
and actual  results  may differ  materially  depending  on a variety of factors.
Factors that might cause  forward-looking  statements to differ  materially from
actual  results  include,  among other  things,  overall  economic  and business
conditions,  demand  for the  Company's  products,  competitive  factors  in the
industries  in which we compete or intend to compete,  natural gas  availability
and cost and timing,  impact and other  uncertainties of our future  acquisition
plans.


                                      -14-
<PAGE>

Item 3.  Controls and Procedures.

(a)      Evaluation of Disclosure Controls and Procedures.

         Within the 90 days prior to the date of this  Quarterly  Report for the
period ended March 31, 2003, we carried out an evaluation, under the supervision
and with the participation of our management,  including the Company's  Chairman
and  Chief  Executive   Officer  and  the  Chief  Financial   Officer,   of  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  pursuant to Rule 13a-14 of the Securities  Exchange Act of 1934 (the
"Exchange Act"), which disclosure controls and procedures are designed to insure
that  information  required to be  disclosed by a company in the reports that it
files under the  Exchange Act is recorded,  processed,  summarized  and reported
within required time periods specified by the SEC's rules and forms.  Based upon
that evaluation, the Chairman and the Chief Financial Officer concluded that our
disclosure  controls and  procedures  are  effective in timely  alerting them to
material  information  relating  to the  Company  required to be included in the
Company's period SEC filings.

(b)      Changes in Internal Control.

         Subsequent to the date of such  evaluation as described in subparagraph
(a)above,  there were no significant  changes in our internal  controls or other
factors that could significantly affect these controls, including any corrective
action with regard to significant deficiencies and material weaknesses.

                           PART II- OTHER INFORMATION

Item 1.  Legal Proceedings.

         On January 6, 2003,  we were  served as a third  party  defendant  in a
lawsuit titled Northern  Natural Gas Company vs. Betty Lou Sheerin vs. Tidelands
Oil & Gas  Corporation,  ZG Gathering,  Ltd. and Ken Lay, in the 150th  Judicial
District Court, Bexar County, Texas, Cause Number 2002-C1-16421. The lawsuit was
initiated by Northern Natural Gas when it sued Betty Lou Sheerin for her failure
to make  payments on a note she  executed  payable to  Northern in the  original
principal amount of $1,950,000.  Northern's suit was filed on November 13, 2002.
Sheerin  answered  Northern's  lawsuit  on January  6,  2003.  Sheerin's  answer
generally  denied  Northern's  claims  and raised the  affirmative  defenses  of
fraudulent inducement by Northern,  estoppel,  waiver and the further claim that
the not does not comport with the legal requirements of a negotiable instrument.
Sheerin  seeks a judicial  ruling that  Northern  be denied any  recovery on the
note. Sheerin's answer included a counterclaim  against Northern,  ZG Gathering,
and Ken Lay generally alleging, among other things, that Northern, ZG Gathering,
Ltd. and Ken Lay,  fraudulently  induced her execution of the note. Northern has
filed a general denial of Sheerin's  counterclaims.  Sheerin's answer included a
third party cross claim against  Tidelands.  She alleges that Tidelands  entered
into an agreement to purchase the Zavala Gathering System from ZG Gathering Ltd.
and that,  as a part of the  agreement,  Tidelands  agreed to satisfy all of the
obligations  due  and  owing  to  Northern,  thereby  relieving  Sheerin  of all
obligations she had to Northern on the promissory note in question.  She alleges
that  Tidelands  is liable to her for all of her  actual  damages,  costs of the
lawsuit and other  unstated  relief.  Tidelands and Sheerin  agreed to delay the
Tideland's  answer  date in order  to allow  time  for  mediation  of the  case.
Tideland's  participated  in a  mediation  on March 11,  2003.  The case was not
settled at that time.  Tideland's  answered  the Sheerin suit on March 26, 2003.
Tideland's  answer  denies all of Sheerin's  allegations.  No discovery has been
completed  at this time.  Based on  initial  investigation,  however,  Tidelands
appears to have a number of potential  defenses to Sheerin's claims.  Tideland's
intends  to  aggressively  defend  the  lawsuit.  At  this  early  stage  in the
litigation,  and in light of our continuing  investigation  of the facts and the
issues in the case,  we cannot give a more  definitive  evaluation of the extent
Tideland's liability exposure.


                                      -15-
<PAGE>

         On December 23, 2002, we were served as a defendant in a lawsuit titled
El Viejo Ranch, Ltd. vs. Tidelands Oil & Gas Corporation,  in the 293rd Judicial
District,  Zavala County, Texas, Cause Number  02-12-10606-ZCV.  The lawsuit was
initiated by El Viejo Ranch, Ltd. on December 10, 2002. El Viejo contends that a
pipeline  right of way agreement  was breached as a result of certain  insurance
coverage,  required to be maintained  under the  right-of-way  agreement,  being
allowed to lapse resulting in termination of the right-of-way easement. El Viejo
seeks a  declaratory  judgement  that the  right-of-way  agreement  was properly
terminated,  that Tidelands is obligated to cease use of the pipeline,  reconvey
the easement to El Viejo, to remove the pipeline, and to remediate the property.
El Viejo also  seeks a  temporary  injunction  to enjoin  Tidelands'  use of the
easement,  damages  in an  unstated  amount and  recovery  of  attorneys'  fees.
Tidelands'  answered the El Viejo lawsuit in early  February,  2003.  Tidelands'
answer denies all of El Viejo's allegations.

Item 2.  Changes in Securities.

         Recent Sales of Unregistered Securities
         ---------------------------------------

         During the first  quarter of 2003,  the  Company  offered  and sold the
following  securities pursuant to exemptions from the registration  requirements
of the Securities Act of 1933, as amended (the "Securities Act").

         On February 4, 2003, we sold 200,000  common shares to S. Merdinger for
$50,000.

         On February  24, 2003,  we  authorized  the issuance of 163,500  common
shares to S. Simon employee bonus valued at $15,697.

         On March 31, 2003, we authorized  the issuance of 600,000 common shares
to S. Merdinger for consulting services valued at $93,600.

         The shares issued above were issued in a private transactions  pursuant
to Section 4(2) of the  Securities  Act of 1933,  as amended,  (the  "Securities
Act"). These shares are considered restricted securities and may not be publicly
resold unless  registered for resale with appropriate  governmental  agencies or
unless exempt from any applicable registration requirements.

Item 3.  Defaults Upon Senior Securities.

         None.

Item 4.  Submission of Matters to a Vote of Security Holders.

         No matter was submitted to a vote of the security holders,  through the
solicitation  of proxies or  otherwise,  during the first  quarter of the fiscal
year covered by this report.

Item 5.  Other Information.

         On March 10, 2003, we agreed to grant 500,000 common stock options each
to Micheal Ward,  Royis Ward,  Ahmmed Karim and Samuel Simon. The options may be
exercised at any time before the  expiration  date of March 1, 2005.  The option
price is Twenty-two Cents ($0.22) per share. Michael Ward, Royis Ward and Ahmmed
Karim are Tideland's officers and directors.

         On March 10, 2003,  we  authorized  the  issuance of  3,596,169  common
shares  for  accrued   officers   salaries   totaling   $791,157  or  twenty-two
Cents($0.22)per share.

Item 6.  Exhibits and Reports on Form 8-K.

         (a) Exhibits

         99.1     Chief Executive  Officer-Section 302 Certification pursuant to
                  Sarbane-Oxley Act.
         99.2     Chief Financial Officer- Section 302 Certification pursuant to
                  Sarbane-Oxley Act.
         99.3     Chief Executive  Officer-Section 906 Certification pursuant to
                  Sarbane-Oxley Act.
         99.4     Chief Financial Officer- Section 906 Certification pursuant to
                  Sarbane-Oxley Act.

         (b) Reports on Form 8-K.  During the first  quarter of 2003 we filed no
reports on Current Report Form 8-K.



                                      -16-
<PAGE>

SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: May 14, 2003

TIDELANDS OIL & GAS CORPORATION



 /s/ Michael Ward
-----------------
By: Michael Ward
Title: President


 /s/ Royis Ward
---------------
By: Royis Ward
Title: Secretary/Treasurer


 /s/ Ahmmed Karim
-----------------
By: Ahmmed Karim
Title: Vice President





















                                      -17-