Abstract: In order to suit for the demand of market-directed economy in oil field development, it is necessary to study the technological policy limit of the present reasonable development. In the view of economic profit and combination with the practical data of Shengli Oil Field, utilizing the balance principal of gain-lost, this paper develops formulas of the economic limit about production oil and water cut. It also discusses the influence factors on the varying of well depth, investment, manage cost, oil price, economic limit, which include taxation and the going up ratio of cost. This method is used to test and verify the value of the economic limit about initial production oil and water cut in Shengli Oil Field, which is classified to high permeable and low permeable area. The study result may provide a reliable and scientific basis for development policy decision and production.