ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On June 18, 2009, Pacific Asia Petroleum, Inc. (the "Company") received from Bluewater Property Management Co., Ltd. the fully-executed Tenancy Agreement (the "Beijing Lease"), between Bluewater Property Management Co., Ltd. and the Company, with respect to approximately 502 square meters of new Company office space located at No. 19A East 3rd Ring Road North, the Nexus Center, Beijing, China ("New Beijing Office"). The Beijing Lease has a term of two (2) years, commencing September 1, 2009 and expiring August 31, 2011, and the combined average monthly rent and management fee (with credits) under the Beijing Lease is approximately RMB 83,596 (approximately USD $12,229 per month). The New Beijing Office will serve as the Company's new Beijing, China office location upon expiration of the Company's current Tenancy Agreement, dated June 29, 2007, for the current office which expires on August 15, 2009.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

The Company entered into the Beijing Lease with Bluewater Property Management Co., Ltd. See Item 1.01 above.

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