Abstract: In this paper,an oilfield is taken as a dynamic system from the view of a grey box system control.A self-containing model for the prediction of the production decline of a water flooded candstone oil reservoir is established by the application of a method of multilayer staged prediction (1) combined with the method of muleiple variables,multiple steps self-checking recurrence prediction (2) based on the analysis of the statistics of changes in the withdrawal rate in a seguence of time.The future output of Daqing oil field without any adjustment programs has been predicted by means of such a model and a dynamic programming model is established and solred by the simplified one-step method of optimization to give an optimized control strategy based on these informations.An economically feasible plan with stable production for the oil field is thus worked out.