By reviewing the challenges in the development of oilfields in China under low oil prices, this study analyzes the root causes of cost rising, put forwards the low cost oilfield development strategy and specific paths to realize the strategy, and predicts the development potential and prospect of oilfields in China. In addition to the low grade of the reservoir and high development maturation, the fundamental reasons of development full cost rising of oilfields in China are as follows: (1) Facing the problem of resources turning poorer in quality, we have built production capacity at a pace too fast before making enough technical and experimental preparation; (2) technical engineering service model leads to high service cost; (3) team of oil development expertise and matched engineering system cannot satisfy the technical requirements of stabilizing oil production, controlling water cut and fine development. To realize development at low cost, the core is to increase economic recoverable reserves. The concrete paths include: (1) to explore the “Daqing oilfield development culture”, improve the ability of leaders in charge of development, and inspire potential of staff; (2) to improve the ability of reservoir dynamics control, and implement precise development by following scientific principles; (3) to speed up integration of water flooding and enhanced oil recovery (EOR) and technological upgrading in order to enhance oil recovery; (4) to innovate key techniques in gas flooding and accelerate the industrial popularization of gas flooding; (5) to break the related transaction barriers and create new management models; and (6) to collaboratively optimize strategic layout and cultivate key oil bases. Although oilfield development in China faces huge challenges in cost, the low-cost development strategy will succeed as long as strategic development of mature and new oil fields is well planned. The cores to lower cost are to control decline rate and enhance oil recovery in mature oil fields, and increase single well productivity through technical innovation and improve engineering service efficiency through management innovation in new oil fields.