In a large pot, melt butter and oil over medium heat. Saute onion and shallots 5 minutes, until softened not brown. Add potatoes, 2 c water, bay leaf, parsley, S&P. Bring to boil, reduce heat and simmer 30 minutes until potatoes are JUST tender. Meanwhile warm milk in saucepan over low heat. Add warm milk and corn to chowder and stir well. Put the flour in small bowl. Take 3 to 4 tb of hot broth from pot and mix w/flour to make a paste. Slowly add to pot, whisking to make a smooth soup. Let soup simmer 3 to 5 minutes until thickened and coorn is tender, but not soft. Remove form heat, stir in basil and serve with butter.