Abstract: Accurate understanding of the effect of sand grains on reservoir permeability is significant for reasonable development of sandy conglomerate reservoirs. On the basis of CT scanning images of cores, digital cores of sandy conglomerate are constructed with sand?grain imbedding method, the corresponding pore network model is extracted with the maximum ball method and the impact of sand grains to permeability and residual oil saturation of sandy conglomerate is studied using percolation theory. The result shows that the existence of sand grains will decrease core permeability and increase residual oil saturation; with sand grains moving towards core outlet end, core permeability and residual oil saturation will gradually decrease; the increase of sand grain size will block flow paths among pores, which will result in the decline of core permeability and increase of residual oil saturation. Then a relation model between core permeability and micro?pore structural parameters has been established and the prediction result obtained from the model shows good consistency with the percolation modelling result, the relative errors of core permeability and residual oil saturation are less than 7.6% and 2.8%, respectively