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                                                                    Exhibit 10.2



                                     Bruce N. Huff
                                     Chief Financial Officer
                                     Far East Energy Corporation
                                     400 N. Sam Houston Parkway East, Suite 205
                                     Houston, Texas 77060

December 19, 2005

Mr. Steve M. Park
Vice President
ConocoPhillips China, Inc.
Oasis 3072
600 North Dairy Ashford
Houston, Texas 77079

         Re: Shouyang PSC - Third Amendment to Farmout Agreement between
ConocoPhillips China, Inc., and Far East Energy Corporation.

Dear Mr. Park:

         The purpose of this third amendment agreement ("Third Amendment") is to
modify some of the terms and conditions of that certain Farmout Agreement for
the Shouyang PSC between ConocoPhillips China Inc. ("CPCI"), formerly Phillips
China, Inc., and Far East Energy Corporation ("FEEC"), dated and supplemented
June 17, 2003, and amended December 15, 2003 and December 17, 2004 (the
"Shouyang Farmout Agreement").

         The capitalized terms used in this Third Amendment that are not
otherwise defined herein shall have the same meaning assigned to them in the
Shouyang Farmout Agreement and the Shouyang PSC.

1. The term of this Third Amendment shall commence on the date first written
above and shall terminate on the same date on which the Shouyang Farmout
Agreement terminates.

2. FEEC has informed CPCI that it has obtained CUCBM's agreement to extend the
term of the second phase of the exploration period under the Shouyang PSC until
March 31, 2006. FEEC hereby undertakes to provide CPCI with written evidence of
such extension.

3. Pursuant to the terms of the December 17, 2004 amendment of the Shouyang
Farmout Agreement, the parties hereto entered into that certain Amended and
Restated Escrow Agreement dated effective December 17, 2004 (the "Escrow
Agreement") to guarantee FEEC's performance during the first and second phases
of the exploration period.

4. As a consequence of FEEC's request and extension of the second phase of the
exploration period under the Shouyang PSC, the termination date of the Escrow
Agreement no longer coincides with the end of the second phase. The parties have
agreed that the Shouyang Farmout Agreement and the Escrow Agreement shall be
amended so that the escrow account established pursuant to the Escrow Agreement
shall remain open until March 31, 2006.

5. Article 6.4 of the Shouyang Farmout Agreement shall be amended by rewriting
the second sentence of paragraph (a) thereof as follows: "The escrow account for
the first phase of the exploration period shall be for a total of $1,000,000,
covering costs incurred under Article 6.5 of the Qinnan Farmout Agreement and
Article 6.7 below, which shall be opened within thirty (30) days after the
Approval date and shall remain open until January 31, 2005, unless FEEC extends
into the second phase of the exploration period of the PSC, in which case the
escrow account shall remain open until March 31, 2006."

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6. This Third Amendment constitutes an amendment to the Shouyang Farmout
Agreement. Neither Party may make any press releases or other public disclosures
of the existence or the contents of this amendment agreement without the prior
written consent of the other Party, except that either Party may disclose
limited amounts of information as required by applicable laws and regulations
and as may be required by financial institutions and stock exchanges.

7. This Third Amendment shall be construed and interpreted in accordance with
the laws of the State of Texas, U.S.A., except those laws that would apply the
laws of another jurisdiction. Any dispute between the Parties arising out of or
relating to this Third Amendment, which cannot be settled amicably by the
Parties, shall be submitted to arbitration in accordance with the provisions of
Article 12 of the Shouyang Farmout Agreement.

8. This Third Amendment shall inure to the benefit of and be binding upon the
successors and assigns of the Parties.

9. Except as otherwise provided in this Third Amendment, the Shouyang Farmout
Agreement shall remain unaltered and in full force and effect.

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         If the foregoing accurately reflects your understanding of this Third
Amendment, please indicate your acceptance by signing and dating this letter
agreement in the space provided below and return one executed copy to FEEC.

Sincerely yours,

FAR EAST ENERGY CORPORATION

By:   /s/  Bruce N. Huff
     ---------------------------
     Bruce N. Huff
     Chief Financial Officer

AGREED TO AND ACCEPTED
this 19th day of December, 2005

PHILLIPS CHINA INC.

By:  /s/ Steve M. Park
    ----------------------------
    Steve M. Park
    Vice President



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