Abstract: Many thin argillaceous siltstone and conglomerate interbeds occur in the K2 t31 thick oil layers in C3 fault block, Chenbao oilfield. According to classification and correlation of the interbeds and study of their distribution features, it is believed that these interbeds subdivide the permeable layers into multiple flow units and lowers the vertical connectivity of the permeable layers, resulting in inhomogeneous distribution of oil and water. Separate zone production should be performed during oilfield development according to the distribution of interbeds. Based on study of the distribution range of interbeds, it is believed that the optimum extended range of interbeds is from 150 to 250m at the specific reservoir conditions in C3 block. Interbeds with too small extension ranges cannot effectively control edge and bottom water. When the permeability of interbeds is under 1/100 that of "normal" reservoirs, i. e. Kb/Kv>100, the interbeds act similarly as non - permeable interbeds. The study also shows that fracturing treatment is not suitable in this bottom water reservoir.