EXHIBIT 99.1

                           BLUE DOLPHIN ENERGY COMPANY



                                  NEWS RELEASE
                                  ------------


FOR IMMEDIATE RELEASE                                             April 29, 2005

Houston, Texas - Blue Dolphin Energy Company (NASDAQ Symbol: BDCO)

BLUE DOLPHIN ENERGY COMPANY REPORTS DEBT RESTRUCTURING

Blue  Dolphin  Energy  Company  ("Company")  announced  that it has entered into
additional  Note  Modification  Agreements  and Waiver  Agreements  with certain
investors  (the  "Investors").  The  Investors  hold  promissory  notes  in  the
principal  amount of $175,000 and were issued  warrants  exercisable  to acquire
666,672 shares of the Company's  common stock,  pursuant to the Note and Warrant
Purchase  Agreement dated September 8, 2004. The promissory  notes bear interest
at 12% per annum of which 4% is payable monthly and 8% is payable at maturity.

Pursuant  to the  terms of the Note  Modification  and  Waiver  Agreements,  the
Company and the Investors agreed as follows:

         o        To extend the maturity date of the Investor's promissory notes
                  from September 8, 2005 to June 30, 2006,

         o        To defer the payment of all interest on the  promissory  notes
                  until maturity,

         o        To allow the Investors to sell shares of the Company's  common
                  stock that they may receive or have  received upon exercise of
                  the warrants  prior to the  expiration of their lock-up period
                  on August 31, 2005, and

         o        To  accelerate  the date the  Company  is  required  to file a
                  registration statement registering the resale of the shares of
                  the Company's common stock that the Investors may acquire upon
                  exercise of warrants to May 15, 2005.

Including  the above,  the Company  has now  extended  the  maturity of $450,000
principal  amount of promissory notes that were due on September 8, 2005 to June
30, 2006. The remaining $300,000 principal amount of promissory notes, issued in
September 2004, are due September 8, 2005.

Blue Dolphin  Energy Company is engaged in the gathering and  transportation  of
natural gas and condensate. Questions should be directed to G. Brian Lloyd, Vice
President,  Treasurer, at the Company's offices in Houston, Texas, 713-227-7660.
For further information see our Home Page at http://www.blue-dolphin.com.

Certain of the  statements  included  in this  press  release,  which  express a
belief, expectation or intention, are "forward-looking"  statements as that term
is  defined  in the  Securities  Act of 1933,  as  amended,  and the  Securities
Exchange  Act of 1934,  as  amended.  The  words  "expect",  "plan",  "believe",
"anticipate",  "project",  "estimate",  and similar  expressions are intended to
identify forward-looking  statements.  These forward-looking  statements are not
guarantees of future  performance or events and such statements involve a number
of risks, uncertainties and assumptions,  general economic conditions,  interest
rates,  and other  factors.  Should one or more of these risks or  uncertainties
materialize or should the underlying assumptions prove incorrect, actual results
and outcomes may differ  materially from those indicated in the  forward-looking
statements.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking statements,  which speak only as of the date hereof. The Company
undertakes  no  obligation to republish  revised  forward-looking  statements to
reflect  events  or  circumstances  after  the date  hereof  or to  reflect  the
occurrence of unanticipated events.