Document:

Exhibit 10.1

                         TIDELANDS OIL & GAS CORPORATION
                 2007 NON-QUALIFIED STOCK GRANT AND OPTION PLAN

     1.  Purposes of the Plan.  The purposes of this Stock Grant and Option Plan
are to  attract  and  retain  the best  available  personnel  for  positions  of
substantial  responsibility,  to provide  additional  incentive to Employees and
Directors of the Company or its Subsidiaries and certain other persons providing
services  to the  Company  or its  Subsidiaries  to promote  the  success of the
Company's  business.  To accomplish  the  foregoing,  the Plan provides that the
Company  may grant  Options  and  Shares of Common  Stock  (each as  hereinafter
defined).

     2. Definitions. As used herein, the following definitions shall apply:

     (a)  "Administrator"  means  the Board or any of its  Committees  appointed
pursuant to Section 4 of the Plan.

     (b)  "Applicable  Laws" has the  meaning  set forth in Section  4(a) of the
Plan.

     (c) "Award" means an award of Options or Shares (each as defined below).

     (d) "Board" means the Board of Directors of the Company.

     (e) "Code" means the Internal Revenue Code of 1986, as amended.

     (f)  "Committee"  means a committee of  Directors  or of other  individuals
satisfying  Applicable  Laws appointed by the Board in accordance with Section 4
hereof.

     (g) "Common Stock" means the common stock of the Company.

     (h) "Company" means Tidelands Oil & Gas Corporation, a Nevada corporation.

     (i)  "Other  Service  Provider"  means any  person  who is  engaged  by the
Company, or any Parent or Subsidiary,  to render services and is compensated for
such services other than as an Employee.

     (j)  "Continuous   Status"  means  the  absence  of  any   interruption  or
termination  of service as an  Employee,  Director  or Other  Service  Provider.
Continuous  Status  as an  Employee  or  Other  Service  Provider  shall  not be
considered  interrupted  in the case of: (i) sick leave;  (ii)  military  leave;
(iii) any other leave of absence  approved by the  Administrator,  provided that
such  leave  is  for a  period  of  not  more  than  ninety  (90)  days,  unless
reemployment  upon the  expiration  of such leave is  guaranteed  by contract or
statute,  or unless provided  otherwise  pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers  between locations of the Company
or between the Company,  its  Subsidiaries or their respective  successors.  For
purposes of this Plan,  a change in status from an Employee to an Other  Service
Provider or from an Other Service Provider to an Employee will not constitute an
interruption of Continuous Status.

     (k)  "Director"  means a  member  of the  Board or of any  Subsidiary's  or
Parent's Board of Directors.

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     (l) "Employee" means any person,  which may include Officers and Directors,
employed by the Company or any Parent or  Subsidiary  of the  Company,  with the
status of employment determined by the Administrator in its discretion,  subject
to any requirements of the Code.

     (m) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (n) "Fair Market  Value"  means,  as of any date,  the fair market value of
Common Stock determined as follows:

         (i) If the Common Stock is listed on any established  stock exchange or
a national market system including without limitation the National Market of the
National Association of Securities Dealers,  Inc. Automated Quotation ("Nasdaq")
System, its Fair Market Value shall be the closing sales price for such stock as
quoted on such system on the date of determination  (if for a given day no sales
were  reported,  the  closing  bid on that day shall be used),  as such price is
reported in The Wall Street  Journal or such other  source as the  Administrator
deems reliable;

         (ii) If the Common Stock is quoted on the Nasdaq System (but not on the
National Market thereof) or regularly quoted by a recognized  securities  dealer
but selling  prices are not  reported,  its Fair Market  Value shall be the mean
between  the  bid  and  asked  prices  for  the  Common  Stock  on the  date  of
determination,  as reported in The Wall Street  Journal or such other  source as
the Administrator deems reliable; or

         (iii) In the absence of an established market for the Common Stock, the
Fair  Market  Value   thereof   shall  be   determined  in  good  faith  by  the
Administrator.

     (t) "Nonstatutory  Stock Option" means an Option not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.

     (u) "Option" means a stock option or warrant granted pursuant to the Plan.

     (v) "Optionee"  means an Employee,  Director or Other Service  Provider who
receives an Option.

     (w)  "Parent"  means  a  "parent  corporation,"  whether  now or  hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.

     (x) "Plan" means this 2007 Non-Qualified Stock Grant and Option Plan.

     (y)  "Restricted  Period" has the meaning set forth in Section 10(b) of the
Plan.

     (z) "Rule 16b-3" means Rule 16b-3  promulgated  under the Exchange  Act, as
the same may be amended from time to time, or any successor provision.

     (aa) "Share" means a share of the Common Stock.

     (bb) "Stock Exchange" means any stock exchange or consolidated  stock price
reporting  system on which  prices for the Common  Stock are quoted at any given
time.

     (cc)  "Subsidiary"  means  a  "subsidiary   corporation,"  whether  now  or
hereafter  existing,  as defined in Section 424(f) of the Code, or any successor
provision.

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     3. Stock Subject to the Plan. The maximum  aggregate  number of Shares that
may be issued under the Plan is 35,000,000  shares of Common  Stock.  The Shares
may be authorized,  but unissued, or reacquired Common Stock. If an Award should
expire,  become forfeited or become  unexercisable for any reason without having
been  exercised or  nonforfeitable  in full,  the  unpurchased  Shares that were
subject  thereto  shall,  unless  the Plan shall  have been  terminated,  become
available  for future grant under the Plan.  In  addition,  any Shares of Common
Stock which are retained by the Company  upon  exercise of an Option in order to
satisfy the exercise or purchase price for such Option or any withholding  taxes
due with  respect  to such  exercise  shall be  treated  as not issued and shall
continue to be available under the Plan.

     4. Administration of the Plan.

     (a) Multiple  Administrative  Bodies. To the extent permitted by Rule 16b-3
and by applicable  securities  laws and the Code  (collectively  the "Applicable
Laws"),  grants under the Plan may be made by the Board or a Committee appointed
by the Board,  which  Committee  shall be constituted to comply with  Applicable
Laws.

     (b) General.  If a Committee has been appointed pursuant to this Section 4,
such  Committee  shall  continue  to  serve  in its  designated  capacity  until
otherwise  directed by the Board.  From time to time the Board may  increase the
size of the Committee and appoint  additional  members  thereof,  remove members
(with or without cause) and appoint new members in substitution  therefor,  fill
vacancies,  however  caused,  and  remove  all  members  of  the  Committee  and
thereafter  directly  administer  the Plan,  all to the extent  permitted by the
Applicable Laws.

     (c) Powers of the Administrator.  Subject to the provisions of the Plan and
in the case of a Committee,  the specific duties  delegated by the Board to such
Committee,  and subject to the approval of any relevant  authorities,  including
the approval, if required,  of any Stock Exchange,  the Administrator shall have
the authority, in its discretion:

         (i)      to  determine  the Fair Market Value of the Common  Stock,  in
                  accordance with Section 2(n) of the Plan;
         (ii)     to select the Other Service Providers, Directors and Employees
                  to whom Awards may from time to time be granted hereunder;
         (iii)    to determine  whether and to what extent  Options or Shares or
                  any combination thereof are granted hereunder;
         (iv)     to determine the number of Shares of Common Stock,  if any, to
                  be covered by each Award granted hereunder;
         (v)      to approve forms of agreement for use under the Plan;
         (vi)     to determine the terms and conditions,  not inconsistent  with
                  the  terms  of the  Plan,  of  any  Award  granted  hereunder,
                  including,  but  not  limited  to,  the  share  price  and any
                  restriction  or  limitation,  the vesting of any Option or the
                  acceleration of vesting or waiver of a forfeiture restructure,
                  based in each case on such factors as the Administrator  shall
                  determine, in its sole discretion;
         (vii)    to determine  whether and under what  circumstances  an Option
                  may be settled in cash instead of Common Stock;
         (viii)   to reduce the exercise price of any Option to the then current
                  Fair Market Value if the Fair Market Value of the Common Stock
                  covered by such Option shall have declined  since the date the
                  Option was granted;  provided,  however,  that,  to the extent
                  required  under  Applicable Law or the rules of the applicable
                  Stock  Exchange,  the  Administrator  shall not exercise  such
                  power without prior shareholder approval.
         (ix)     to determine the terms and restrictions, if any, applicable to
                  an award of Shares;

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         (x)      to  construe  and  interpret  the terms of the Plan and awards
                  granted pursuant to the Plan; and
         (xi)     in order  to  fulfill  the  purposes  of the Plan and  without
                  amending the Plan,  to modify Awards to  participants  who are
                  foreign  nationals or employed outside of the United States in
                  order to recognize  differences  in local law, tax policies or
                  customs.

     (d) Effect of Administrator's  Decision. All decisions,  determinations and
interpretations  of the Administrator  shall be final and binding on all holders
of any Award.

     5. Eligibility.

     (a)  Recipients  of Grants.  Awards may be granted to  eligible  Employees,
Directors and Other Service Providers.

     (b) Type of Option.  Each Option shall be designated in the written  option
agreement as a Nonstatutory Stock Option.

     (c) No Employment  Rights.  The Plan shall not confer upon any Optionee any
right with respect to continuation of employment or consulting relationship with
the Company, nor shall it interfere in any way with such Optionee's right or the
Company's right to terminate his or her employment or consulting relationship at
any time, with or without cause.

     6. Term of Plan.  The Plan shall become  effective upon its adoption by the
Board.  It shall  continue  in effect for ten (10) years from the date  thereof,
unless sooner terminated under Section 15 hereof.

     7. Term of Option.  The term of each Option shall be the term stated in the
Option  Agreement;  provided,  however,  that the term shall be no more than ten
(10)  years  from the  date of  grant  thereof  or such  shorter  term as may be
provided in the Option Agreement.

     8. Option Exercise Price and Consideration.

     (a)  Exercise  Price.  The per share  exercise  price for the  Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board and set forth in the applicable agreement.

     (b) Permissible Consideration.  The consideration to be paid for the Shares
to be issued upon exercise of an Option,  including the method of payment, shall
be determined by the  Administrator  and may consist  entirely of (1) cash,  (2)
check, (3) promissory note, (4) other Shares,  (5) to the extent permitted under
Applicable Laws,  authorization  for the Company to retain from the total number
of Shares as to which the Option is  exercised  that  number of Shares  having a
Fair Market Value on the date of exercise  equal to the  exercise  price for the
total  number of Shares as to which the Option is  exercised,  (6) to the extent
permitted under Applicable Laws, delivery of a properly executed exercise notice
together with such other  documentation as the  Administrator and the broker, if
applicable,  shall  require to effect an exercise of the Option and  delivery to
the Company of the sale or loan proceeds  required to pay the exercise price and
any applicable  income or employment taxes, (7) any combination of the foregoing
methods of payment,  or (8) such other  consideration  and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws.

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     9. Exercise of Option.

     (a) Procedure for Exercise;  Rights as a  Shareholder.  Any Option  granted
hereunder  shall be  exercisable  at such  times and under  such  conditions  as
determined by the Administrator,  and reflected in the written option agreement,
which may include vesting  requirements and/or performance criteria with respect
to the  Company  and/or  the  Optionee.  An Option  may not be  exercised  for a
fraction of a Share.

         An Option shall be deemed to be exercised  when written  notice of such
exercise  has been  given to the  Company  in  accordance  with the terms of the
Option by the  person  entitled  to  exercise  the Option  and the  Company  has
received  full  payment  for the  Shares  with  respect  to which the  Option is
exercised.  Full  payment  may,  as  authorized  by the  Board,  consist  of any
consideration  and method of payment  allowable  under Section 8(b) of the Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other  rights  as  a  shareholder  shall  exist  with  respect  to  such  stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued)  such stock  certificate  promptly  upon  exercise of the Option.  No
adjustment  will be made for a dividend or other right for which the record date
is prior to the date the stock  certificate  is issued,  except as  provided  in
Section 12 of the Plan.

     (b) Termination of Employment or Consulting Relationship.  Unless otherwise
provided in the Option, in the event of termination of an Optionee's  Continuous
Status,  such  Optionee  may, but only within three (3) months after the date of
such  termination  (or  such  greater  period  of time as is  determined  by the
Administrator),  exercise  his or her Option to the extent that the Optionee was
entitled  to  exercise  it at the date of such  termination.  To the extent that
Optionee  was  not  entitled  to  exercise  the  Option  at  the  date  of  such
termination,  or if  Optionee  does not  exercise  such  Option to the extent so
entitled within the time specified herein, the Option shall terminate.

     (c)  Disability of Optionee.  In the event of  termination of an Optionee's
Continuous  Status  as a result of his or her  total  and  permanent  disability
(within the meaning of Section  22(e)(3) of the Code),  Optionee  may,  but only
within twelve (12) months from the date of such  termination,  unless  otherwise
provided in the Option (but in no event  later than the  expiration  date of the
term of such Option as set forth in the Option  Agreement),  exercise the Option
to the extent otherwise entitled to exercise it at the date of such termination.
To the extent that  Optionee was not entitled to exercise the Option at the date
of  termination,  or if Optionee  does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

     (d) Death of Optionee.  In the event of the death of an Optionee during the
period of  Continuous  Status,  or death within three (3) months  following  the
termination of the Optionee's Continuous Status, the Option may be exercised, at
any time within twelve (12) months following the date of death, unless otherwise
provided in the Option (but in no event  later than the  expiration  date of the
term of such  Option as set forth in the Option  Agreement),  by the  Optionee's
estate or by a person who  acquired  the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death  or,  if  earlier,  the date of  termination  of the
Continuous  Status. To the extent that Optionee was not entitled to exercise the
Option at the date of death or  termination,  as the case may be, or if Optionee
does not  exercise  such  Option  to the  extent  so  entitled  within  the time
specified herein, the Option shall terminate.

     (e) Extension of Exercise Period. Notwithstanding the limitations set forth
in  Sections  9(b),  (c) and (d)  above,  the  Administrator  has full power and
authority  to extend the period of time for which any Option  granted  under the
Plan is to remain exercisable  following termination of an Optionee's Continuous

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Status from the limited period set forth in the written option agreement to such
greater period of time as the Administrator shall deem appropriate.

     (f) Rule 16b-3.  Options granted to an Officer,  Director,  or greater than
ten percent  shareholder  of the Company  shall comply with Rule 16b-3 and shall
contain such additional conditions or restrictions as may be required thereunder
to qualify for the maximum exemption for Plan transactions.

     (g) Buyout  Provisions.  The Administrator may at any time offer to buy out
for a payment in cash or Shares,  an Option  previously  granted,  based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     10. Shares.

     (a) Grant of Shares.  Shares of Common Stock may be issued either alone, in
addition to, or in tandem with other Awards  granted  under the Plan.  After the
Administrator  determines  that it will grant an award of shares of Common Stock
under the Plan, it shall advise the offeree in writing of the terms,  conditions
and restrictions (if any) related to the offer,  including any Restricted Period
applicable  to such award,  the  imposition,  if any,  of any  performance-based
condition or other  restriction on an award of such Common Stock,  the number of
Shares that such person shall be entitled to purchase, and the price to be paid,
if any.  The  prospective  recipient  of an Award of  Shares  shall not have any
rights  with  respect to any such  Award,  unless and until such  recipient  has
executed an award agreement that has been duly countersigned by the Company,  in
the form determined by the Administrator, evidencing the Award.

     (b)  Lapse  of  Restrictions.  With  respect  to an Award  of  Shares,  the
Administrator  shall  prescribe in the Award  agreement the period in which such
Shares  becomes  nonforfeitable,  which may be  immediately,  over time, or upon
specified events (the "Restricted Period").

     (c) Certificates. Each recipient who is granted an Award of Shares shall be
issued a stock certificate in respect of such Shares, which certificate shall be
registered  in the name of the recipient  and shall bear an  appropriate  legend
referring to the terms,  conditions,  and  restrictions  applicable  to any such
Award;  provided,  that,  the Company may  require  that the stock  certificates
evidencing any Shares that are subject to restrictions granted hereunder be held
in the custody of the Company until any restrictions  thereon shall have lapsed,
and may require  that,  as a condition of any Award of Shares,  the  participant
shall have  delivered a stock power,  endorsed in blank,  relating to the Shares
covered by such Award.

     (d)  Rights as a  Shareholder.  Except as  otherwise  provided  in an Award
agreement, the participant shall possess all incidents of ownership with respect
to such Shares during the Restricted  Period,  including the right to receive or
reinvest dividends with respect to such Shares and to vote such Shares.

     (e) Nontransferability. During the Restricted Period, if any, the recipient
of such award shall not be permitted to sell, transfer,  pledge,  hypothecate or
assign  Shares  awarded under the Plan except by will or the laws of descent and
distribution.  Any  attempt  to  dispose  of any  restricted  Shares  during the
Restricted  Period in contravention of any such  restrictions  shall be null and
void and without effect.

     (f) Other  Provisions.  The Award agreement shall contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined by
the  Administrator  in its sole discretion.  In addition,  the provisions of the
Award agreements need not be the same with respect to each purchaser.

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     11.  Stock  Withholding  to Satisfy  Withholding  Tax  Obligations.  At the
discretion of the Administrator,  Optionees may satisfy withholding  obligations
as  provided  in this  paragraph.  When an  Optionee  incurs  tax  liability  in
connection  with an Option,  which tax  liability is subject to tax  withholding
under  applicable  tax laws, and the Optionee is obligated to pay the Company an
amount  required to be withheld  under  applicable  tax laws,  the  Optionee may
satisfy  the  withholding  tax  obligation  by one or  some  combination  of the
following  methods:  (a) by  cash  payment,  or (b)  out of  Optionee's  current
compensation,  (c) if  permitted by the  Administrator,  in its  discretion,  by
surrendering  to the Company  Shares  that (I) in the case of Shares  previously
acquired  from the  Company,  have been owned by the  Optionee for more than six
months on the date of  surrender,  and (II) have a fair market value on the date
of  surrender  equal to or less  than  Optionee's  marginal  tax rate  times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued  upon  exercise of the  Option,  if any,  that number of
Shares  having a fair market value equal to the amount  required to be withheld.
For this  purpose,  the fair market value of the Shares to be withheld  shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").

     All  elections  by an  Optionee  to have  Shares  withheld  to satisfy  tax
withholding  obligations  shall be made in writing in a form  acceptable  to the
Administrator  and  shall be  subject  to the  following  restrictions:  (a) the
election must be made on or prior to the applicable Tax Date; (b) once made, the
election shall be  irrevocable  as to the particular  Shares of the Option as to
which the  election  is made;  and (c) all  elections  shall be  subject  to the
consent or disapproval of the Administrator.

     In the event the  election to have  Shares  withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under  Section  83(b) of the Code,  the  Optionee  shall  receive the full
number of Shares with respect to which the Option is exercised but such Optionee
shall be  unconditionally  obligated  to tender  back to the  Company the proper
number of Shares on the Tax Date.

     12. Adjustments Upon Changes in Capitalization, Corporate Transactions.

     (a)  Changes  in  Capitalization.  Subject  to any  required  action by the
shareholders of the Company, (i) the number of shares of Common Stock covered by
each outstanding Award, (ii) the number of shares of Common Stock that have been
authorized  for issuance  under the Plan but as to which no Awards have yet been
granted or that have been returned to the Plan upon  cancellation  or expiration
of an Award or otherwise, (iii) the maximum number of shares of Common Stock for
which Awards may be granted to any Employee  under the Plan,  (iv) the price per
share of Common Stock covered by each such outstanding Award, and (v) the number
of shares of Common Stock that may be granted shall be proportionately  adjusted
for any  increase  or decrease  in the number of issued  shares of Common  Stock
resulting from a stock split, reverse stock split, stock dividend,  combination,
recapitalization  or  reclassification  of the  Common  Stock or the like.  Such
adjustment shall be made by the Board, whose determination in that respect shall
be final,  binding and  conclusive.  Except as  expressly  provided  herein,  no
issuance  by the  Company  of  shares  of  stock  of any  class,  or  securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason  thereof  shall be made with respect to, the number or price of shares
of Common Stock subject to an Award.

     (b) Corporate  Transactions.  In the event of the proposed  dissolution  or
liquidation of the Company,  each Award will terminate  immediately prior to the
consummation  of  such  proposed  action,   unless  otherwise  provided  by  the
Administrator.  Additionally, the Administrator may, in the exercise of its sole
discretion  in such  instances,  declare that any Award shall  terminate as of a
date  fixed by the  Administrator  and that  each  Award  shall  be  vested  and
non-forfeitable  and any conditions on each such Award shall lapse, as to all or
any part of such  Award,  including  Shares  as to which  the  Award  would  not

<PAGE>

otherwise be exercisable or non-forfeitable.  In the event of a proposed sale of
all or  substantially  all of the  assets of the  Company,  or the merger of the
Company  with or into  another  corporation,  each Award  shall be assumed or an
equivalent Award shall be substituted by such successor  corporation or a parent
or  subsidiary  of  such  successor   corporation,   unless  the   Administrator
determines,  in the  exercise  of  its  sole  discretion  and in  lieu  of  such
assumption or substitution,  that the Award shall be vested and  non-forfeitable
and any conditions on each such Award shall lapse, as to all or any part of such
Award, including Shares as to which the Award would not otherwise be exercisable
or  non-forfeitable.   If  the  Administrator  makes  an  Award  exercisable  or
non-forfeitable  in lieu of assumption or  substitution in the event of a merger
or sale of assets, the Administrator  shall notify the recipient that such Award
shall be exercisable  for a period of at least thirty (30) days from the date of
such notice, and thereafter will terminate upon the expiration of such period.

     13. Non-transferability of Awards. An Option (or Award of Shares during any
Restricted   Period)  may  not  be  sold,   pledged,   assigned,   hypothecated,
transferred,  or disposed of in any manner  other than by will or by the laws of
descent or distribution.

     14. Time of Granting of an Award.  The date of grant of an Award shall, for
all purposes,  be the date on which the  Administrator  makes the  determination
granting such Award, or such other date as is determined by the Board. Notice of
the  determination  shall be given to each Employee or Other Service Provider to
whom an Award is so  granted  within a  reasonable  time  after the date of such
grant.

     15. Amendment and Termination of the Plan.

     (a)  Amendment  and  Termination.  The Board  may  amend,  alter,  suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided,
that no such amendment, alteration,  suspension,  discontinuation or termination
shall be made  without  stockholder  approval if such  approval is  necessary to
comply with Applicable Laws.

     (b) Effect of Amendment or Termination.  Notwithstanding the foregoing, any
such  amendment  or  termination  of the Plan shall not affect  Options  already
granted and such  Options  shall remain in full force and effect as if this Plan
had not been amended or terminated, unless mutually agreed otherwise between the
Optionee  and the Board,  which  agreement  must be in writing and signed by the
Optionee and the Company.

     16. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the  exercise of an Award  unless the exercise of such Award and the issuance
and  delivery of such Shares  pursuant  thereto  shall  comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any Stock Exchange.

     17. Reservation of Shares. The Company,  during the term of this Plan, will
at all  times  reserve  and keep  available  such  number  of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to  obtain  authority  from  any  regulatory  body  having  jurisdiction,  which
authority  is deemed by the  Company's  counsel  to be  necessary  to the lawful
issuance  and sale of any Shares  hereunder,  shall  relieve  the Company of any
liability  in  respect of the  failure to issue or sell such  Shares as to which
such requisite authority shall not have been obtained.

     18.  Agreements.  Awards shall be evidenced by written  agreements  in such
form as the Administrator shall approve from time to time.

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     19. Governing Law. The Plan and all  determinations  made and actions taken
pursuant  hereto  shall be governed by the laws of the State of Nevada,  without
giving effect to the conflict of laws principles thereof.  Each party submits to
the  exclusive  jurisdiction  and venue of any State or Federal court located in
the State of Texas with  respect to any  controversy  or claim  arising  out of,
related to, or connected with this Plan, its  enforcement or  interpretation  or
the Awards issued hereunder.Exhibit 10.2

                         TIDELANDS OIL & GAS CORPORATION

                 2007 NON-QUALIFIED STOCK GRANT AND OPTION PLAN

                          NOTICE OF STOCK OPTION AWARD
                          ----------------------------

     You have been granted an option to purchase shares of Common Stock, subject
     to the terms and  conditions  of this  Notice of Stock  Option  Award  (the
     "Notice"),  the Tidelands Oil & Gas Corporation  2007  Non-Qualified  Stock
     Grant and Option  Plan,  as amended  from time to time (the "Plan") and the
     Stock Option Award Agreement (the "Option  Agreement")  attached hereto, as
     follows.  Unless  otherwise  defined herein,  the terms defined in the Plan
     shall have the same defined meanings in this Notice.

     Grantee's Name:
                    ------------------------------------------------------------

     Award Number                          Date of Award
                 -----                                  ------------------------

     Vesting Commencement Date
                                           ---------------------------

     Exercise Price per Share
                                           ---------------------------

     Total Number of Shares Subject
     to the Option (the "Shares")
                                           ---------------------------

     Type of Option:                       Non-Qualified Stock Option

     Expiration Date:
                                           -------------------------------------

     Post-Termination Exercise Period:     Three Months

Vesting Schedule:
-----------------

     Subject to Grantee's  Continuous Service and other limitations set forth in
this Notice, the Plan and the Option Agreement,  the Option may be exercised, in
whole or in part, in accordance with the following schedule:

     ---------------------------------------------------------------------------

     IN WITNESS  WHEREOF,  the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and  conditions of this
Notice, the Plan, and the Option Agreement.

                                                 Tidelands Oil & Gas Corporation

                                                 By:
                                                    ----------------------------

                                                 Title:
                                                       -------------------------

     The  Grantee  acknowledges  receipt  of a copy of the Plan  and the  Option
Agreement,  and  represents  that  he or she is  familiar  with  the  terms  and
provisions  thereof,  and hereby  accepts the Option subject to all of the terms
and  provisions  hereof and thereof.  The Grantee has reviewed this Notice,  the
Plan,  and the Option  Agreement in their  entirety,  has had an  opportunity to
obtain  the  advice  of  counsel  prior to  executing  this  Notice,  and  fully
understands  all provisions of this Notice,  the Plan and the Option  Agreement.
The Grantee  hereby agrees that all disputes  arising out of or relating to this
Notice,  the Plan and the Option  Agreement shall be resolved in accordance with
Section 9 of the Plan. The Grantee further agrees to notify the Company upon any
change in the residence address indicated in this Notice.

Dated: __, 2007                                  Signed:
                                                        ------------------------
                                                                 Grantee

                                       1
<PAGE>

                         TIDELANDS OIL & GAS CORPORATION

                 2007 NON-QUALIFIED STOCK GRANT AND OPTION PLAN

                          STOCK OPTION AWARD AGREEMENT
                          ----------------------------

     1. Grant of Option. Tidelands Oil & Gas Corporation (the "Company"), hereby
grants to the Grantee (the "Grantee")  named in the Notice of Stock Option Award
(the "Notice"),  an option (the "Option") to purchase the Total Number of Shares
of Common Stock subject to the Option (the "Shares") set forth in the Notice, at
the  Exercise  Price per Share set forth in the Notice  (the  "Exercise  Price")
subject to the terms and  provisions  of the  Notice,  this Stock  Option  Award
Agreement  (the "Option  Agreement")  and all of the terms and conditions of the
Company's 2007  Non-Qualified  Stock Grant and Option Plan, as amended from time
to time  (the  "Plan"),  which are  incorporated  herein  by  reference.  Unless
otherwise  defined  herein,  the terms  defined  in the Plan shall have the same
defined meanings in this Option Agreement.

     2. Exercise of Option.

         (a) Right to Exercise.  The Option shall be exercisable during its term
in  accordance  with the  Vesting  Schedule  set out in the  Notice and with the
applicable provisions of the Plan and this Option Agreement. The Option shall be
subject  to  the   provisions  of  Section  12  of  the  Plan  relating  to  the
exercisability  or  termination  of the  Option  in  the  event  of a  corporate
transaction.  The  Grantee  shall be subject to  reasonable  limitations  on the
number of requested  exercises during any monthly or weekly period as determined
by the Administrator. In no event shall the Company issue fractional Shares.

         (b) Method of Exercise;  Payment.  The Option shall be exercisable only
by delivery of an Exercise Notice  (attached as Exhibit A) which shall state the
election to exercise the Option,  the whole number of Shares in respect of which
the Option is being  exercised,  and such other provisions as may be required by
the Administrator.  The Exercise Notice shall be signed by the Grantee and shall
be delivered in person, by certified mail, or by such other method as determined
from time to time by the Administrator to the Company  accompanied by payment of
the Exercise  Price.  The Option shall be deemed to be exercised upon receipt by
the Company of such written notice accompanied by the Exercise Price. Payment of
the Exercise  Price shall be by any manner set forth in Section 8(b) of the Plan
at the election of the Grantee;  provided,  however,  that such exercise  method
does not then violate any Applicable  Law and is accepted by the  Administrator,
in its sole discretion.

         (c) Taxes.  No Shares will be  delivered to the Grantee or other person
pursuant  to the  exercise of the Option  until the Grantee or other  person has
made  arrangements  acceptable  to the  Administrator  for the  satisfaction  of
applicable  income tax,  employment  tax, and social  security  tax  withholding
obligations,  including,  without limitation,  such other tax obligations of the
Grantee  incident to the  receipt of Shares.  Upon  exercise of the Option,  the
Company or the Grantee's  employer may offset or withhold  (from any amount owed
by the Company or the  Grantee's  employer to the  Grantee) or collect  from the
Grantee or other person an amount  sufficient  to satisfy  such tax  obligations
and/or the employer's withholding obligations.

     3. Termination of Continuous Service. In the event the Grantee's Continuous
Service terminates,  the Grantee may, to the extent otherwise so entitled at the
date of such termination (the  "Termination  Date"),  exercise the Option during
the Post-Termination  Exercise Period. In no event shall the Option be exercised
later than the Expiration Date set forth in the Notice.

                                       1
<PAGE>

     4. Disability or Death of Grantee. This Option shall be subject to Sections
9(c) and 8(d) of the Plan regarding exercise after death or disability.

     5.  Transferability  of Option.  The Option may not be  transferred  in any
manner other than by will or by the laws of descent and  distribution and may be
exercised during the lifetime of the Grantee only by the Grantee.

     6. Term of Option. The Option may be exercised no later than the Expiration
Date set forth in the Notice or such earlier date as otherwise provided herein.

     7. Refusal to Transfer.  The Company  shall not be required (i) to transfer
on its  books  any  Shares  that have  been  sold or  otherwise  transferred  in
violation of any of the provisions of this Option  Agreement or (ii) to treat as
owner of such  Shares or to accord  the  right to vote or pay  dividends  to any
purchaser  or  other   transferee  to  whom  such  Shares  shall  have  been  so
transferred.

     8. Tax  Consequences.  Grantee has not been given, and is not relying upon,
any advice from the Company  regarding  the tax  consequences  of  receiving  or
exercising  this  Option.  THE  GRANTEE  SHOULD  CONSULT  A TAX  ADVISER  BEFORE
EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

     9.  Entire  Agreement.  The  Notice,  the Plan and  this  Option  Agreement
constitute  the entire  agreement  of the  parties  with  respect to the subject
matter  hereof  and  supersede  in their  entirety  all prior  undertakings  and
agreements  of the Company and the Grantee  with  respect to the subject  matter
hereof,  and may not be modified  adversely to the Grantee's  interest except by
means of a writing signed by the Company and the Grantee.

                                       2
<PAGE>

                                    EXHIBIT A
                                    ---------

                                 EXERCISE NOTICE

     1.  Effective  as  of  today,  ______________,  ___  the  undersigned  (the
"Grantee")   hereby  elects  to  exercise  the  Grantee's   option  to  purchase
___________  shares of the Common Stock (the  "Shares")  of Tidelands  Oil & Gas
Corporation (the "Company") under and pursuant to the Company's 2007 Stock Grant
and Option Plan,  as amended from time to time (the "Plan") and the Stock Option
Award  Agreement (the "Option  Agreement") and Notice of Stock Option Award (the
"Notice") dated  ______________,  20___.  Unless otherwise  defined herein,  the
terms defined in the Plan shall have the same defined  meanings in this Exercise
Notice.

     2.  Representations  of the  Grantee.  The  Grantee  acknowledges  that the
Grantee has received,  read and understood  the Notice,  the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

     3.  Rights as  Shareholder.  Until the stock  certificate  evidencing  such
Shares is issued  (as  evidenced  by the  appropriate  entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive  dividends  or any other  rights as a  shareholder  shall  exist with
respect to the Shares,  notwithstanding  the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate  reasonably  promptly
after the Option is exercised.

     4. Delivery of Payment.  The Grantee  herewith  delivers to the Company the
full Exercise  Price for the Shares.  If Grantee  elects to satisfy the Exercise
Price via any method  permissible  under  Section  8(b) of the Plan  (other than
payment in cash),  Grantee  shall attach a separate  statement to this  Exercise
Notice indicating the method, or combination of methods, selected.

     5. Entire  Agreement.  The Notice,  the Plan and the Option  Agreement  are
incorporated  herein  by  reference  and  together  with  this  Exercise  Notice
constitute  the entire  agreement  of the  parties  with  respect to the subject
matter  hereof  and  supersede  in their  entirety  all prior  undertakings  and
agreements  of the Company and the Grantee  with  respect to the subject  matter
hereof.  Nothing in the Notice, the Plan, the Option Agreement and this Exercise
Notice (except as expressly  provided  therein) is intended to confer any rights
or remedies on any persons other than the parties.

Submitted by:                               Accepted by:

GRANTEE:                                    TIDELANDS OIL & GAS CORPORATION

                                            By:
                                               ---------------------------------

                                            Title:
----------------------------------                ------------------------------
           (Signature)

Address:
--------

----------------------------------

----------------------------------

                                       1

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