SecProbe.io

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								October 4, 2005

Mr. James Carroll
Chief Financial Officer
American Petroleum Group, Inc.
1400 N. Gannon Drive, 2nd Floor
Hoffman Estates, IL 60194

	Re:	American Petroleum Group, Inc.
      Form 10-KSB/A for Fiscal Year Ended December 31, 2004
      Filed August 12, 2005
      Form 10-QSB/A for Fiscal Quarter Ended March 31, 2005
      Filed August 12, 2005
      Response Letter Dated August 12, 2005
      Form 10-QSB for Fiscal Quarter Ended June 30, 2005
      Filed August 22, 2005
		File No. 0-49950

Dear Mr. Carroll:

      We have reviewed your filings and response letter and have
the
following comments.  We have limited our review of your filings to
those issues we have addressed in our comments.  Where indicated,
we
think you should revise your document in response to these
comments.
If you disagree, we will consider your explanation as to why our
comment is inapplicable or a revision is unnecessary.  Please be
as
detailed as necessary in your explanation.  In some of our
comments,
we may ask you to provide us with information so we may better
understand your disclosure.  After reviewing this information, we
may
raise additional comments.

Form 10-KSB/A for the Fiscal Year Ended December 31, 2004

General

1. Many of our comments apply to more than one document (i.e.
Forms
10-QSB for the fiscal quarter ended March 31, 2005 and June 30,
2005)
or more than one section.  To prevent the issuance of similar
comments, please review all areas of corresponding disclosure in
the
various filings and make appropriate changes to all affected
sections
and documents.  That will eliminate the need for us to issue
repetitive or similar comments.

Description of Business

Overview

2. We note your disclosure that you acquired a 20-year mining
lease
on March 9, 2001 and terminated the lease during the nine months
ended December 31, 2003.  You further state that in your opinion,
"there will be no continuing liability," and refer the reader to
the
Schedule 14C filed with the Commission on February 13, 2004 "for
additional details on this matter."  As we are unable to locate
the
additional information you reference, please provide your basis
for
determining that you have no outstanding liability associated with
this lease.

Alliance Petroleum Products Company

3. We note your disclosure that "The Company`s current direction
is
in the manufacturing and distribution of petroleum and related
products for the automotive industry."  Please expand this
disclosure
to clearly indicate the following, without limitation, as outlined
in
Item 101 of Regulation S-B:

* Principal products or services and their markets;
* Distribution methods of the products or services;
* Competitive business conditions and your competitive position in
the industry and methods of competition;
* Sources and availability of raw materials and the names of
principal suppliers;
* Dependence on one or a few major customers;
* Patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts, including duration.

Subsequent Transactions

4. Please explain the accounting impact, if any, upon signing the
Letter of Intent, dated December 1, 2004, with Oilmatic Systems
LLC.

Plan of Operations

5. We note your reference to the acquisition of American Petroleum
Products Company under this subtitle and your previous reference
to
the acquisition of Alliance Petroleum Products Company
("Alliance").
We further note that American Petroleum Products, Inc. was
formerly
known as Alliance Petroleum Products, Inc.  Please revise your
discussion of this acquisition throughout your filings to ensure
consistency in your disclosure so as not to confuse the reader.

Results of Operations: For the Year Ending December 31, 2004 vs.
December 31, 2003

6. Please reconcile your statement that Interest expense was
$25,475
and impairment to Goodwill was $822,262 to your Consolidated
Statements of Operations.

Liquidity and Financial Resources

7. Please reconcile the amount you disclose as Net cash used by
operating activities of $1,441,080 to the amount presented in your
Consolidated Statements of Cash Flows.

Description of Property

8. With respect to your manufacturing and distribution facility in
Bedford Park, Illinois, we note that you do not have a formal
lease
and are not presently paying rent for this property "due to a
dispute
with the former President of the Company, who is also the owner of
this property."  Please tell us how you have considered the
guidance
in paragraph 8 of SFAS 5 regarding this loss contingency.

Legal Proceedings

9. Please tell us how you have accounted for the defaulted loan
agreement between your subsidiary and Harris Bank of Chicago,
Illinois, if applicable.

Management`s Discussion and Analysis or Plan of Operation

10. Please indicate whether or not you have any off-balance sheet
arrangements, as required by Item 303(c) of Regulation S-B.

Financial Statements

Report of Independent Registered Public Accounting Firm

11. Please have your auditors explain how the additional
procedures
they performed to change their opinion from qualified to
unqualified
did not require a dual dated audit report.

12. Please provide a detailed analysis of the relevant terms of
each
promissory note referenced in the teleconference held September
21,
2005 with us that resulted in the initial qualified opinion.  In
this
regard, please address the accounting impact of each note on the
financial statements for the fiscal year ended December 31, 2004
and
any subsequent financial statements filed with the Commission, if
applicable.

Consolidated Statements of Operations

13. It appears from your disclosures that you have not included
depreciation relating to property, plant and equipment in your
determination of Gross Profit.  Please revise your calculation to
include all costs and expenses associated directly with or
allocated
to your products sold.  These costs and expenses should include
inventoriable costs of assets incident to or necessary for
production
of your product, including applicable depreciation, depletion and
amortization.  Refer to SAB Topic 11:B.  In addition, revise any
discussion throughout your filing of Gross Profit, as appropriate.

14. We are unable to recalculate the amount you present as loss
per
share for the fiscal year ended December 31, 2003.  Please provide
a
reconciliation of the $1.14 loss per share.

Consolidated Statements of Cash Flows

15. Please confirm that the amount shown as an investing outflow
under Acquisition of new subsidiary represents cash paid.  In this
regard, we note your disclosure within Note F that "The aggregate
acquisition price was $856,200, which consisted of 1,107,500 of
the
Company`s common stock valued at $0.54 and cash advances
outstanding
to Company at the time of consummation of the transactions."

16. Please reconcile amounts shown as financing cash inflows under
Issuance of common stock, totaling $44,400, and Increase in
additional paid-in capital, totaling $629,575 and $482,000, to the
Consolidated Statements of Stockholders` Equity (Deficit) for each
period presented.

Note C - Summary of Significant Accounting Policies

Revenue

17. Please compare and contrast your revenue recognition
accounting
policy with the guidance in SAB Topic 13.  Additionally expand
your
accounting policy disclosure to clearly state how the criteria
identified in SAB Topic 13 are met based on the specific terms of
the
transactions that generate revenue under your current state of
operations.

Note F - Business Combinations

18. With respect to the transaction with Pascal Energy, Inc. on
April
1, 2003, please explain the accounting impact associated with the
issuance of 5,000,000 common shares and the subsequent return of
those shares to the treasury on your Consolidated Statements of
Stockholders` Equity (Deficit).

Motor Parts Warehouse, Inc. ("MPW")

19. With respect to this transaction, please explain the
accounting
impact associated with the issuance of 5,000,000 common shares and
the subsequent lapse of the option to acquire all of the
outstanding
stock of MPW.

Alliance Petroleum Products Company

20. Please revise your disclosure so the reader clearly
understands
which entity you refer to as "AMAI."

21. We note that you have consolidated the operations of Alliance
since July 1, 2004 while you state within the Description of
Business
section that "It is the opinion of current management that the
terms
of the amendment as contained above, are unenforceable against the
Company."  Please provide an analysis of the terms of the
amendment
you believe are unenforceable against the Company.  In addition,
explain how you have accounted for the assumption of "all payment
obligations and all other agreements of Alliance as set forth in
the
including four "Promissory Notes;" and assumption of "all payment
obligations and all other agreements of Alliance to the Harris
Bank."

22. Please provide a reconciliation of the line item that includes
the write-off of goodwill, totaling $822,262.

Note G - Notes Payable to Stockholders

23. We note that you received $500,000 from stockholder/officers
who
transferred shares of their stock into an escrow account where the
shares were then sold and that the "balance sheet as of December
31,
2003 was restated to record the $500,000 liability and reduce
additional paid-in capital."  Please explain (i) why you adjusted
additional paid-in capital, (ii) where this adjustment is
reflected
in your Consolidated Statements of Stockholders` Equity (Deficit),
and (iii) where you have reflected the receipt of the $500,000 in
the
Consolidated Statements of Cash Flows for the fiscal year ended
December 31, 2003.

Note I - Related Party Loans Payable to Officers/Stockholders

New Century Capital Consultants, Inc. - Note Payable

24. With respect to the note payable outstanding with New Century
Capital Consultants, Inc., we note your disclosure that the
"lender
may convert the principal amount and any accrued interest into
common
stock of the Company based upon a formula equal to 40% below the
closing bid price of the stock starting after six months from
execution of this agreement."  Please tell us the accounting
impact,
if any, this particular term had on recording the note payable and
whether or not the lender has converted any of the principal
amount
into shares of common stock of the Company.

25. We note your disclosure that "On October 18, 2004, the Company
received notice from the lender that, in its opinion, the Company
was
in default on the arrangement as a result of distributions to
classes
of equity holders and possibly transfer of material assets."
Please
provide an update on this assertion and an analysis that supports
your position that these "assertions are unfounded."

Former President

26. We note your disclosure that the "amount recorded by the
Company
represents the estimated fair value of the liability of the amount
assumed at the time of purchase of APPC.  It appears that the
liability represents funds advanced for working capital."  You
further state that "As a result of other contingencies that of the
purchase of AAPC the final settled amount of this liability could
be
significantly different from the present recorded amount [sic]."
Tell us how you have considered the disclosure guidance in
paragraphs
9 and 10 of SFAS 5.

Other Stockholders

27. We note your disclosure that "Certain notes have provisions
including options to purchase additional common shares at $.01 per
share."  Please tell us the accounting impact, if any, this term
has
on recording these notes payable.

Note J - Stockholders` Equity

28. Please provide a reconciliation of the common stock issued
during
the periods presented as referenced in this footnote to the
Consolidated Statements of Stockholders` Equity (Deficit).

Form 10-QSB for the Fiscal Quarter Ended June 30, 2005

Note G - Notes Payable

Highgate House Funds, Ltd.

29. Please expand your disclosure to identify the number of shares
the Lender will receive upon conversion of the convertible
debenture
into shares of your common stock.

30. Please explain how the financing expense of $2,782,500 was
determined and where the total amount due under the Convertible
debenture of $425,000 is presented in your Interim Balance Sheets.

Note H - Payroll Services

31. Please revise your disclose to fill in the items marked $xxxx.

Closing Comments

       As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the amendment to expedite our review.  Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information.  Detailed cover letters
greatly
facilitate our review.  Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.

	 You may contact Jennifer Goeken at (202) 551-3721 if you
have
questions regarding comments on the financial statements and
related
matters.  Please contact me at (202) 551-3683 with any other
questions.

								Sincerely,

								Jill S. Davis
								Branch Chief
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Mr. James Carroll
American Petroleum
October 4, 2005
Page 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
100 F Street, NE
WASHINGTON, D.C. 20549-7010

   DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010

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