It is located in the northeast of the Bohai Bay Basin. The north, east and west of Liaohe Oil Province are surrounded by mountains, while the southern part extends into the waters of the Liaodong Bay. A total of 39 oil and gas fields have been discovered in Liaohe Oil Province and 25 have been put into development, with an annual crude productivity of 12 million tons. Liaohe Oil Province is the largest production base for heavy oil, ultra heavy oil and high pour-point oil in China.

On September 9, 1969, a high-yield industrial oil and gas flow was obtained from well Xing-1 located in the western sag of the Liaohe depression, kicking off the mass exploration and development of the Liaohe Oilfield. The major target zone for exploration is the Palaeogene system, where structural, stratigraphic and lithologic reservoirs exist. The produced crude is mainly heavy oil with a small portion of light oil, due to the different layer series and varying depth.

In the 1980s, mature oil fields in the Liaohe area entered the high water-cut stage. Based on waterflooding and huff and puff development which had been applied for many years, CNPC made pilot tests for new development methods such as chemical recovery, SAGD, steam flooding and in-situ combustion drive. The SAGD pilot project proved successful, which increased heavy oil recovery by 30%. Huff and puff combined with