Abstract: As one of China's deficient natural resources, oil is a very important strategic natural resource. Exploitation of overseas oil is a very important part of the policies that utilize both domestic and overseas natural resources. Transnational investment in petroleum industry has to face many risks, including politic and economic risks. This paper emphasizes on the risk mechanism of transnational exploitation of petroleum industry and analyzes the main factors which influence the risks in politic, economic, and social fields. Based on what have mentioned above, the paper brings forward a series of risk-evaluating method in terms of political risk, economic risk and technical risk. Finally, the paper discusses the way to reduce and manage the risks.