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 September 30, 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.)



1862 West Bitters Rd., Bldg.#1, San Antonio, TX            78248
-----------------------------------------------   ------------------------------
(Address of principal executive offices)                  (Zip Code)



Issuer's telephone number,(   210    )      764       -          8642
                           -----------  -------------   -----------------------


        Former Name, former address and former fiscal year if changed s
                                ince 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 September 30, 2003, the
registrant had 42,397,107 shares of common stock, par value 0.001 outstanding.

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

<PAGE>
                          PART I-FINANCIAL INFORMATION


                         TIDELANDS OIL & GAS CORPORATION
                                   FORM 10-QSB


Item 1.  Financial Statements.  (Unaudited)


                                      INDEX

                                                                            Page
PART I - Financial Information

Item 1 - Financial Statements
         Condensed Consolidated Balance Sheets as of
         September 30, 2003 and December 31, 2002 ...........................3-4

         Condensed Consolidated Statements of Operations
         For the Three Months Ended September  30, 2003 and 2002...............5

         Condensed Consolidated Statements of Operations
          For the Nine Months Ended September 30, 2003 and 2002................6

         Condensed Consolidated Statements of Cash Flows
         For the Nine Months Ended September 30, 2003 and 2002...............7-8

         Notes to Condensed Consolidated Financial Statements...............9-12

Item 2 - Management's Discussion and Analysis or Plan of Operation.........13-14

PART II - Other Information

Item 1 - Legal Proceedings ...................................................15

Item 2 - Changes in Securities and Use of Proceeds............................15

Item 3 - Defaults Upon Senior Securities......................................16

Item 4 - Submission of Matters to a Vote of Security Holdings.................16

Item 5 - Other Information....................................................16

Item 6 - Exhibits and Reports on Form 8K .....................................16

Signature.....................................................................17





                                      - 2 -



<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS





                                     ASSETS
                                     ------



                                         September 30, 2003    December 31,2002
                                         ------------------   ------------------
                                             (Unaudited)
Current Assets:
      Cash                               $          213,661   $          193,669
      Accounts Receivable                               887               16,306
      Inventory                                      12,155               12,155
      Prepaid Expenses                               47,227               43,601
                                         ------------------   ------------------
         Total Current Assets                       273,930              265,731
                                         ------------------   ------------------

Property Plant and Equipment, Net                   480,219            1,111,617
                                         ------------------   ------------------

Investment - Reef Ventures, L.P.                     98,629                 --
                                         ------------------   ------------------

All Other Assets                                      3,800                1,995
                                         ------------------   ------------------

         Total Assets                    $          856,578   $        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)
                     ---------------------------------------


                                                     September 30, 2003     December 31, 2002
                                                     ------------------    ------------------
                                                         (Unaudited)
<S>                                                  <C>                   <C>
Current Liabilities:
      Accounts Payable and
        Accrued Expenses                             $          854,529    $        1,369,220
      Current Maturities of Long-Term Debt                      325,000               826,691
                                                     ------------------    ------------------
           Total Current Liabilities                          1,179,529             2,195,911

Long-Term Debt                                                        0                     0

Due to Related Parties                                           23,908             1,719,362
                                                     ------------------    ------------------

           Total Liabilities                                  1,203,437             3,915,273
                                                     ------------------    ------------------

Commitments and Contingencies                                      --                    --

Stockholders' (Deficit)
      Common Stock, $.001 par value per share,
        100,000,000 shares authorized;
         42,397,107 shares issued and
         outstanding September 30, 2003
         33,683,329 shares issued and outstanding
         December 31, 2002                                       42,398                33,684

Additional Paid-in Capital                                    8,220,382             6,715,108
Subscriptions Receivable                                        (18,000)              (18,000)
Accumulated (Deficit)                                        (8,591,639)           (9,266,722)
                                                     ------------------    ------------------

           Total Stockholders' (Deficit)                       (346,859)           (2,535,930)
                                                     ------------------    ------------------

           Total Liabilities and
             Stockholders' (Deficit)                 $          856,578    $        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
                                                   September 30, 2003    September 30, 2002*
                                                   ------------------    ------------------
<S>                                                <C>                   <C>
Revenues:
      Gas Processing Sales                         $                0    $          261,234
      Other                                                   103,830                (1,767)
                                                   ------------------    ------------------
           Total Revenues                                     103,830               259,467
                                                   ------------------    ------------------

Operating Expenses:
      Purchases                                                     0               171,290
      Operating Expenses                                       11,791                47,218
      Depreciation and Amortization                            11,153                11,343
      Interest                                                  9,675                12,143
      Officers and Director's Salaries & Fees                  69,000                75,000
      General and Administrative                              284,780               440,135
                                                   ------------------    ------------------
         Total Operating Expenses                             386,399               757,129
                                                   ------------------    ------------------
(Loss) From Continuing Operations                            (282,569)             (497,662)
(Loss) From Asset Abandonment                                    (850)                    0
Litigation Settlement                                               0              (492,000)
(Loss) From Discontinued Operations
        (Note 2)                                                    0               (72,358)
                                                   ------------------    ------------------
Net (Loss)                                         $         (283,419)   $       (1,062,020)
                                                   ==================    ==================

Net (Loss) Per Common Share
      Basic
      Loss From Continuing Operations              $            (0.01)   $           (0.015)
      (Loss) - Extraordinary Item                               (0.00)               (0.015)
      Loss From Discontinued Operations                         (0.00)               (0.002)
                                                   ------------------    ------------------
         Total                                     $            (0.01)   $           (0.032)
                                                   ==================    ==================
Weighted Average Number of Common
      Shares Outstanding, Basic                            41,390,507            32,799,579
                                                   ==================    ==================

      Diluted
      Loss From Continuing Operations              $            (0.01)   $           (0.015)
      (Loss) - Extraordinary Item                                0.00                (0.015)
      Loss From Discontinued Operations                         (0.00)               (0.002)
                                                   ------------------    ------------------
         Total                                     $            (0.01)   $           (0.032)
                                                   ==================    ==================
Weighted Average Number of Common
   Shares Outstanding, Diluted                             43,640,507            32,799,579
                                                   ==================    ==================
</TABLE>



*The statement of  consolidated  operations for the three months ended September
30,  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
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                   Nine Months Ended     Nine Months Ended
                                                   September 30, 2003    September 30, 2002*
                                                   ------------------    ------------------
<S>                                                <C>                   <C>
Revenues:
      Gas Processing Sales                         $                0    $          637,825
      Other                                                   123,922                 2,807
                                                   ------------------    ------------------
           Total Revenues                                     123,922               640,632
                                                   ------------------    ------------------

Operating Expenses:
      Purchases                                                     0               409,022
      Operating Expenses                                       26,484               165,548
      Depreciation and Amortization                            32,473                33,656
      Interest                                                 43,316                56,154
      Officers and Directors Salaries & Fees                  219,000               225,000
      General and Administrative                              660,447             1,107,100
                                                   ------------------    ------------------
         Total Operating Expenses                             981,720             1,996,480
                                                   ------------------    ------------------
(Loss) From Continuing Operations                            (857,798)           (1,355,848)
(Loss) From Asset Abandonment                                    (850)                    0
Extraordinary Items - Gain on Partial Sale
  Of Subsidiary                                             1,533,731                     0
Litigation Settlement                                               0              (492,000)
(Loss) From Discontinued Operations
  (Note 2)                                                          0              (246,426)
                                                   ------------------    ------------------
Net Income (Loss)                                  $          675,083    $       (2,094,274)
                                                   ==================    ==================

Net Income (Loss) Per Common Share
      Basic
      Loss From Continuing Operations              $            (0.02)               (0.046)
      Gain - Extraordinary Item                                  0.04                (0.018)
      Loss From Discontinued Operations                         (0.00)               (0.008)
                                                   ------------------    ------------------
         Total                                     $             0.02    $           (0.072)
                                                   ==================    ==================
Weighted Average Number of Common
      Shares Outstanding, Basic                            38,040,218            29,219,115
                                                   ==================    ==================

      Diluted
      Loss From Continuing Operations              $            (0.02)   $           (0.046)
      Gain - Extraordinary Item                                  0.04                (0.017)
      Loss From Discontinued Operations                          0.00                (0.008)
                                                   ------------------    ------------------
         Total                                     $             0.02    $           (0.071)
                                                   ==================    ==================
Weighted Average Number of Common
   Shares Outstanding, Diluted                             39,290,218            29,444,115
                                                   ==================    ==================
</TABLE>

*The statement of  consolidated  operations for the nine months ended  September
30,  2002  has  been   reclassified  to  conform  with  the  December  31,  2002
presentation.


      See Accompanying Notes to Condensed Consolidated Financial Statements

                                       -6-

<PAGE>
<TABLE>
<CAPTION>

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

                                                    Nine Months Ended     Nine Months Ended
                                                    September 30, 2003    September 30, 2002
                                                    ------------------    ------------------
<S>                                                 <C>                   <C>
Cash Flows Provided (Required) By
  Operating Activities:
    Net Income (Loss)
      Continuing Operations                         $          675,083    $       (1,847,848)
      Discontinued Operations                                        0              (246,426)
    Adjustments to Reconcile Net Income (Loss)
        to Net Cash Provided (Required) By
        Operating Activities:

    Depreciation and Amortization
        Continuing Operations                                   32,473                33,656
        Discontinued Operations                                      0                20,145
     Issuance of Common Stock
        For Services Provided                                  317,814               391,265
        For Litigation Settlement                                    0               492,000
     Officers' Salaries                                        100,000               180,000
        Changes in
          Accounts Receivable                                   15,419               (40,673)
          Inventory                                                  0               (11,600)
          Prepaid Expenses                                      15,124               285,571
          Other Assets                                          (1,805)             (352,550)
           Accounts Payable and Accrued Expenses              (552,191)              354,463
          Current Maturities of Long-Term Debt                (302,924)              405,812
                                                    ------------------    ------------------

Net Cash Provided (Required)
   by Operating Activities                                     298,993              (336,185)
                                                    ------------------    ------------------
Cash Flows Provided (Required)
   by Investing Activities:
       (Increase) in Investments                               (98,629)                    0
       Disposals of Property, Plant & Equipment                697,285                     0
       Acquisitions of Property, Plant & Equipment             (98,360)             (303,183)
                                                    ------------------    ------------------

 Net Cash Provided (Required)
    by Investing Activities                                    500,296              (303,183)
                                                    ------------------    ------------------
</TABLE>







      See Accompanying Notes to Condensed Consolidated Financial Statements

                                       -7-


<PAGE>
<TABLE>
<CAPTION>

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

                                   (CONTINUED)

                                                       Nine Months           Nine Months
                                                          Ended                 Ended
                                                    September 30, 2003    September 30, 2002*
                                                    ------------------    ------------------
<S>                                                 <C>                    <C>
Cash Flows Provided (Required) by
  Financing Activities:
     Proceeds From Issuance of Common Stock                     50,000                     0
     Reduction of Long-Term Loans                                    0              (173,888)
     Repayments of Loans, Fees and
       Accrued Salaries Due Related Parties                   (848,597)                    0
     Proceeds of Loans From
       Related Parties                                          19,300               643,520
                                                    ------------------    ------------------

Net Cash Provided (Required) by
  Financing Activities                                        (779,297)              469,632
                                                    ------------------    ------------------

Net Increase (Decrease) in Cash                                 19,992              (169,736)
Cash at Beginning of Period                                    193,669               397,491
                                                    ------------------    ------------------
Cash at End of Period                               $          213,661    $          227,755
                                                    ==================    ==================

Supplemental Disclosures of
   Cash Flow Information
      Cash Payments for Interest                    $           33,143    $           31,443
                                                    ==================    ==================

      Cash Payments for Income Taxes                $                0    $                0
                                                    ==================    ==================
Non-Cash Financing Activities:
   Issuance of Common Stock:
      Operating Activities                          $          317,814    $          391,265
      Deposit - Pipeline Acquisition                                 0               355,000
      Payment of Accounts Payable                               62,500               508,000
      Repayment of Loans                                       198,767                     0
      Litigation Settlement                                          0               492,000
      Prepayment of Consulting Contract                              0               645,000
      Prepayment of Financing Fee                                    0               832,000
      Prepayment of Legal Fees                                  18,750                     0
      Repayment of Loans and Accrued
        Salaries From Related Parties                          866,157               738,621
                                                    ------------------    ------------------

      Total Non-Cash Financing Activities           $        1,463,988    $        3,961,886
                                                    ==================    ==================
</TABLE>


*The statement of  consolidated  cash flows for the nine months ended  September
30, 2002 has been  reclassified  (Note 2) to conform  with the December 31, 2002
presentation.


      See Accompanying Notes to Condensed Consolidated Financial Statements

                                       -8-

<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 nine month periods ended  September 30, 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 nine month period ended  September  30, 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.









                                       -9-

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - DISCONTINUED OPERATIONS
------   -----------------------

         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  nine  months  ended
         September   30,  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.

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

         A summary of property,  plant and equipment at September 30, 2003 is as
         follows:

                                                                  Estimated
                                                                Economic Life
                                                                -------------

         Equipment and
            Leasehold Improvements          $       18,252        3-10 Years
         Pipelines                                 431,560          15 Years
         Processing Plant                          166,410          15 Years
                                            --------------
                   Total                           616,222
         Less Accumulated Depreciation             136,003
                                            --------------
                   Total                    $      480,219
                                            ==============

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,

                                      -10-

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


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

         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.  Accordingly,  the Company's  financial  statements reflect that
         position.

         The Company settled the Viejo Ranch Ltd. lawsuit on October 29, 2003 by
         executing a Release and Settlement Agreement and the payment of $6,000.


NOTE 5 - OTHER
------   -----
         On September 10, 2003,  the Company issued  600,000  restricted  common
         shares which were  approved  August 15, 2003 to 34479  Yukon,  Inc. for
         consulting services valued at $62,400.

         On September 12, 2003,  the Company issued  500,000  restricted  common
         shares which were approved August 15, 2003 to C. Siddons for consulting
         services valued at $52,000.

         On September 22, 2003,  the Company issued  300,000  restricted  common
         shares  which were  approved  August 15,  2003 to  Marcello  Kochen for
         consulting services valued at $31,200.

         On September 16, 2003,  the Company  issued 600,000 common shares which
         were approved  August 15, 2003 to it's attorney for 2003 legal services
         valued at $75,000.


                                      -11-

<PAGE>

                         TIDELANDS OIL & GAS CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5 - OTHER (CONTINUED)
------   -----------------

         On  September  2, 2003,  the Company  approved  the  issuance of 13,200
         restricted  common  shares to James B.  Smith for  September  officer's
         salary valued at $6,667.


NOTE 6 - PARTIAL SALE OF SUBSIDIARIES
------   ----------------------------

         In April 2003, the Company completed transactions 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.

         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.

         The company recorded a gain on the partial sale of the two subsidiaries
         of $1,533,731.

NOTE 7 - SUBSEQUENT EVENTS
------   -----------------

         Reef International, LLC completed the natural gas pipeline and metering
         facilities construction during the third quarter of 2003. On November 1
         natural gas transportation commenced.











                                      -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 two  subsidiaries  named Rio
Bravo Energy, LLC, and Sonora Pipeline,  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 & 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 near  term  utilizing  gas
produced from third party producers before going to our international  crossing.
This future  processing  operation  could  maximixe the plant  capacity  thereby
allowing more liquids to be stripped from the gas, thus complimenting our future
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.

In the future,  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
constructed 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 constructed 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  crossings.  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.

On April 16, 2003, we sold a Seventy-five  (75%)  interest in our  subsidiaries,
Reef  International,  L.L.C.  and Reef  Marketing,  L.L.C.  for  $1,960,867 on a
Purchase  and Sale  Agreement.  The L.L.C.  interests  were  acquired  by Impact
International,  L.L.C. (99% of the 75%) and Coahuila Pipeline, L.L.C. (1% of the
75%).  Immediately after the transactions,  Tidelands,  Impact International and
Coahuila  transferred  their respective  interests in both Reef L.L.C.'s to Reef
Ventures,  L.P., a Texas limited partnership.  Tidelands retained a 25% interest
in Reef Ventures, L.P.

Reef International, L.L.C. is the holder of United States, Texas permits for the
construction,  ownership,  operation and  maintenance of a twelve (12") pipeline
and a six (6") liquids line  (together  with loading and  unloading  facilities)
from Eagle Pass,  Texas to Piedras Negras,  Mexico.  Reef Marketing,  L.L.C. was
organized for the  marketing,  gathering and  transportation  of natural gas and
natural gas liquids from Eagle Pass, Texas to Piedras Negras, Mexico.

Impact has agreed to finance the construction of the Reef Ventures, L.P. natural
gas pipeline. The financial commitment is $3,315,906.  Additionally,  Impact has
agreed to finance the construction of the 6 inch propane/butane liquids pipeline
subject to the negotiation and execution of definitive  agreements.  The liquids
pipeline financial commitment is $2,723,226. Impact's total financial commitment
to Tidelands regarding the sale of the Reef interests and pipeline  construction
is not to exceed $8,000,000.

Reef  International,  LLC  completed  the  natural  gas  pipeline  and  metering
facilities  construction during the third quarter of 2003. On November 1 natural
gas transportation commenced.


RESULTS OF OPERATIONS

REVENUES:  The Company reported revenues of $123,922 from continuing  operations
for the nine months ended  September  30, 2003 as compared  with  revenues  from
continuing  operations of $640,632 for the nine months ended September 30, 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  $1,996,480  for the nine  months  ended  September  30, 2002 to
$981,720 for the nine months ended September 30, 2003.

COST OF  SALES:  The  cost  of  sales  (purchases)  from  continuing  operations
decreased from $409,022 for nine months ended September 30, 2002 to $-0- for the
nine months ended  September 30, 2003.  The reduction of $409,022 was due to the
temporary closing of our Gas Processing Plant.

OPERATING  EXPENSES:   Other  operating  expenses  from  continuing   operations
decreased from  $1,587,458 for nine months ended  September 30, 2002 to $981,720
for the nine months ended  September 30, 2003.  The decrease of $605,738 was due
to the  temporary  closing  of our Gas  Processing  Plant and  reduced  selling,
general and administrative expenses.

SELLING, GENERAL AND ADMINSTRATIVE EXPENSES: Selling, general and administrative
expense from continuing operations decreased from $1,107,100 for the nine months
ended  September  30, 2002 to $660,447 for the nine months ended  September  30,
2003.  The decrease of $446,653 was  primarily due to decreased  consulting  and
legal fees and financing costs.

INCOME TAX: The pretax loss improved from ($2,094,274) for the nine months ended
September 30, 2002 to net income of $675,083 for the nine months ended September
30, 2003 an improvement of $2,769,357 due substantially to the gain on the
partial sale of a subsidiary and a non-recurring expense in 2002.

LIQUIDITY AND CAPITAL  RESOURCES:  Capital  expenditures  during the nine months
ended  September 30, 2003 totaled $98,360 as compared with $303,183 for the nine
months ended September 30, 2002. The decrease of $204,823 consists  primarily of
lower  pre-construction  costs regarding our international  pipeline crossing to
Mexico.

Total debt  decreased  from  $3,915,273  at December 31, 2002 to  $1,203,437  at
September  30, 2003.  Total debt as of September  30, 2003 and December 31, 2002
expressed as a percentage of the sum of total debt and shareholders'  equity was
140.49% and 283.85% respectively.

Net income for the nine months ended September 30, 2003 was $675,083 an increase
of 132.23% from the net loss of ($2,094,274) for the nine months ended September
30, 2002.  Diluted net loss per common share improved  128.78% to $0.02. The net
income per share  calculation  for the nine  months  ended  September  30,  2003
included an increase in actual and equivalent shares outstanding.

                                      -14-
<PAGE>

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.

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  September  30,  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.

         On October 29, 2003, we settled the El Viejo Ranch lawsuit.  We entered
into a  Release  and  Settlement  Agreement  and paid El Veijo  Ranch the sum of
$6,000.

                                      -15-

<PAGE>

Item 2.  Changes in Securities.

         Recent Sales of Unregistered Securities

         During  the third  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"). The following
shares were  authorized  for  issuance by the board of  directors  on August 15,
2003:

         On  September 2, 2003,  we  authorized  the  issuance of 13,200  common
shares to Jim Smith valued at $6,667. This represents his September salary.

         On September 10, 2003, we issued  600,000 common shares to 34479 Yukon,
Inc., for consulting services valued at $62,400.

         On  September  12, we issued  500,000  common  shares to C. Siddons for
consulting services valued at $52,000.

         On September  22, 2003,  we issued  300,000  common  shares to Marcello
Kochen for consulting services valued at 31,200.

         We believe the shares issued above were issued in 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 August 16, 2003,  we employed  James B. Smith to act as an Executive
Vice  President  and Chief  Financial  Officer.  We offered Mr. Smith a one-year
employment  agreement.  Mr. Smith's  compensation  will be paid $6,700 per month
payable in common  stock at the rate of 13,700  common  shares.  We granted  Mr.
Smith common stock options to acquire 500,000 shares for $110,000  Dollars.  The
option may be exercised  commencing  February 15, 2004 and expires on, or before
March 1, 2005.

Mr. Smith  received a Bachelor of Science from Texas A&M University and a Master
of  Professional  Accounting  degree from the McCombs  School of Business at the
University of Texas,  Austin. He is licensed as a Certified Public Accountant in
Texas and Colorado.  From 1996 through  2001, he directed the financial  affairs
and  tax  planning  for  several  closely  held  corporations  engaged  in  land
development  in Colorado.  From 2000 through 2003, he served as Chief  Financial
Officer for Starr  Produce  Company,  a major produce  company with  significant
subsidiaries in real estate development and agri-business.


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

         (a) Exhibits

      Exhibit No.                Exhibit Name

         31.1     Chief Executive  Officer-Section 302 Certification pursuant to
                  Sarbane-Oxley Act.

         31.2     Chief Financial Officer- Section 302 Certification pursuant to
                  Sarbane-Oxley Act.

         32.1     Chief Executive  Officer-Section 906 Certification pursuant to
                  Sarbane-Oxley Act.

         32.2     Chief Financial Officer- Section 906 Certification pursuant to
                  Sarbane-Oxley Act.

         (b) Reports on Form 8-K. During the third quarter of 2003 we did not
file any Current Reports on 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: November 12, 2003

TIDELANDS OIL & GAS CORPORATION


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

 /s/ James B. Smith
----------------------------
By: James B. Smith
Title: Vice President, CFO





































                                      -17-