Abstract: The Paleogene in Subei Basin are continental shale depositions, with two sets of organic rich shale E1f2, E1f4 well developed, of which E1f2 shale is great in thickness, high in organic matter abundance, and the organic matters are dominated by type Ⅰ-Ⅱ₁, mainly at mature stage of evolution. Many kinds of micro pores and micro cracks are well developed, forming network storage system for oil and gas formation in the spaces, provided with the material foundation for formation of shale oil and gas and reservoir conditions. The content of brittle mineral inorganic mineral is high, and the clay mineral contents is low, which is favorable for shale oil extraction. Oil and gas shows have been seen in many wells, and commercial oil flows have been obtained in production test in part of wells, indicating that the oil shale in the Subei Basin has great exploration potential.