Abstract: The real option traits of a petroleum exploration project，oil price movement model and the influence of technical and economic parameters on the value of an exploration project were analyzed. A multistage real option model for evaluating a petroleum exploration project was established using riskneutral expectation arithmetic operator and norisk discount rate. The flexibility value of the investment stage by stage in an exploration project was evaluated rationally with this model. The influences of uncertainty parameters on the value of a petroleum exploration project were discussed by applying the model. The probability of the model was verified through practice.