Since 1998, we have launched a production benefit evaluation program at all 13 oil provinces. By classifying oil production according to benefit levels, we try to establish the concept of economic production and set the reasonable production target on the basis of economic benefit.

This paper describes the method of production benefit evaluation in detail. This production benefit evaluation program consists of developed oilfield evaluation and individual oil well evaluation. There are strict and detailed regulations on division of evaluation unit (for developed oilfields), selection of evaluation parameter and amortization of expenses. Also we introduce the progress of the production benefit evaluation program, evaluation results and its application.

Through this program, we get a good idea of the distribution of oil production in different benefit ranges and the status of operating cost. By taking adjustment measures, the operating cost of evaluation production have reduced greatly. As a practice of our low-cost strategy, this program is of great significance for controlling operating cost and enhancing economic benefit.

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