EXHIBIT 10.2


                            FORM OF WAIVER AGREEMENT

THIS WAIVER AGREEMENT is entered into by Blue Dolphin Energy Company, a Delaware
corporation  (the "Company"),  and  ________________  (the  "Investor")  Certain
capitalized  terms not defined herein have the meanings  assigned to them in the
Purchase Agreement (as defined below).

                                    RECITALS:

                  In Section 5.10 of Article 5 of the Note and Warrant  Purchase
         Agreement  dated September 8, 2004 (the "Purchase  Agreement")  between
         the  Company  and  certain  investors,  each  investor,  including  the
         Investor,  agreed that,  during the nine (9) month period following the
         Additional  Closing Date,  it will not sell,  transfer or assign any of
         the Warrants or the Warrant Shares without the prior written consent of
         the Company.

                  The Investor has requested  that the Company waive  compliance
         with Section 5.10 of the Purchase Agreement.

                  Concurrently   herewith  the  Company  and  the  Investor  are
         entering into the Note Modification Agreement (as defined below).

         NOW, THEREFORE, in consideration of the promises herein contained,  the
mutual benefits to be derived herefrom and other good and valuable consideration
received by each party,  and each  intending  to be legally  bound  hereby,  the
Company and the Investor hereby agree as follows:

         The Company waives any further  compliance by the Investor with Section
5.10 of the Purchase Agreement.

         The Company agrees to use its  commercially  reasonable best efforts to
(i) file a  registration  statement  on Form  S-3 or such  other  form  that the
Company is then eligible to use (the  "Registration  Statement") by May 15, 2005
registering the resale of the Warrant Shares  beneficially owned by the Investor
and (ii) cause such  Registration  Statement to be declared  effective under the
Securities Act as soon as reasonably practicable thereafter.

         Concurrently with the execution of this Waiver Agreement,  the Investor
agrees to enter  into that  certain  Note  Modification  Agreement  of even date
herewith,   between  the  Company  and  the  Investor  (the  "Note  Modification
Agreement").

         Except as  modified  by this  Agreement  all other  obligations  of the
Investor and the Company pursuant to the Purchase Agreement remain in full force
and effect.



         IN WITNESS WHEREOF, the parties have caused this Agreement which may be
executed in  multiple  counterparts,  to be  executed  by their duly  authorized
representatives, all as of the ____ day of April, 2005.

                                                    THE COMPANY:
                                                    BLUE DOLPHIN ENERGY COMPANY



                                                    By:_________________________
                                                       Name: Michael J. Jacobson
                                                       Title: President



                                                    THE INVESTOR:



                                                    By:_________________________
                                                       Name:
                                                       Title: