Abstract: Deep or semi-deep lacustrine oil shale is widely distributed in the Permian Lucaogou Formation in Fukang area on southern margin of Junggar Basin. Fukang research area of oil shale is located at the structural transition area between paleo-syneclise and Late Paleozoic Bogda faulted depression trough. Permian oil shale crops out due to large-scale reversed slip faults. Commercial types of ore bodies are organic sedimentary bedded deposits. Oil shale strata can be divided into four segments from old ones to new ones, as well as high-quality oil shale concentrates in the second and third ones. Trace elements analysis based on different indicators shows that most oil shale samples are categorized as land facies judged by the ratio of Sr/Ba. Baron content shows that oil shalemainly exists in freshwater sedimentary environment but with sea water effect occasionally. Fukang oil shale has extremely high value for production

Key words: oil shale, Junggar Basin, geological characteristics, Lucaogou Formation