Abstract: The oil-source correlation shows that the oil and gas in the southern flank of Chepaizi swell in the western margin of Junggar basin are mainly from the Jurassic source rocks in the Sikeshu sag and the neighboring areas. Re-evaluation of hydrocarbon resources is significant for understanding the exploration potential of Sikeshu sag and the neighboring areas. Based on the data of outcrop, seismic and drilling, the palaeogeomorphology of the Sikeshu sag and Chepaizi swell during Jurassic sedimentary period is restored in Junggar basin, and the Sikeshu sag and Shawan sag are verified as relatively independent sedimentary units during Jurassic Period. 3 sub-sags developed in the Sikeshu sag are the favorable areas for source rock development. Based on the source rock index analysis of outcrop sample, core and cuttings and combined with seismic data, the development areas of effective source rocks are determined. The calculated hydrocarbon resources of the source rocks in Jurassic Badaowan formation of Sikeshu sag by using a differential pressure model reach 2.8 × 108 t, which provides abundant material basis for oil and gas exploration in the Sikeshu sag and the neighboring areas