Exhibit 99.1

                                  NEWS RELEASE



FOR IMMEDIATE RELEASE                                          September 2, 2005


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


BLUE DOLPHIN ENERGY REPORTS EXPECTED RECEIPT OF NET REVENUES

On September 2, 2005, Blue Dolphin Energy Company, a Delaware corporation ("Blue
Dolphin"),  reported that it expects to receive a payment of approximately  $1.3
million,  subject to certain  adjustments,  for estimated past production from a
reversionary  after-payout  interest in High Island Block 37. Payout occurred on
or about July 1, 2004.

Currently, there are two wells producing in the High Island Block 37 field.


Blue Dolphin  Energy Company is engaged in the gathering and  transportation  of
natural gas and condensate.  Questions  should be directed to Gregory W. Starks,
Treasurer, at the Company's offices in Houston, Texas, 713-227-7660.

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.