Abstract: Royalty and tax regime is a relatively traditional contract, it varies with the changing of economic environment.Under the Royalty and tax regime, the petroleum corporation get the crude and natural gas in kind, and pay royalty, income tax and other tax to the local government. The net income after tax decides how much the contractor can get. The main factors which influence the contractor's profit are tax content and level, except technologies. The core content to study the oil and gas project development strategy is to analyze the different tax characteristics, by control or decrease the tax obligation, to increase the profit of the contractor.