Kevin Shortt, Ubisoft writer behind Far Cry 2 has indeed confirmed to OPM that Far Cry 3 is in development. He's also gone so far as to say where the game won't be set.
"We're still in very early development and we have no idea where it's going to be set", said Shortt, "but I'm pretty sure that it won't be in Africa".
So, there you go then.