In response to the development difficulties in Xinjiang oilfield, such as poor reservoir properties of low permeability reservoir and poor performances in water flooding, this paper explores the feasibility of using carbon dioxide flooding to enhance the oil recovery and realize the sequestration. The Baqukeshangzu oil reservoir is taken herein for example, and the numerical reservoir simulation is conducted. The prediction model is established based on the fully understanding of typical reservoir development history and its dynamic information by fluid fitting, slim tube test simulation and water-flooding history matching. Besides, the development model,gas-flooding parameters and technologies are optimized respectively. The results show that the minimum miscibility pressure of the reservoir is 18.6 MPa. The carbon dioxide can sweep the area effectively where the conventional water flooding cannot. The sequestration coefficient for the water alternating gas displacement (WAG) is 0.146, which is 12.42% higher than that for water flooding, and 3.33% higher than that for carbon dioxide continuous flooding. The most significant factor that influences WAG efficiency is total gas injection volume. By using control condition to shut down the layers, the sweeping volume of CO2 is expanded, the oil recovery and sequestration capacity are also improved. Its oil recovery is 3.07% higher than that for using control condition to shut down the wells, and its sequestration coefficient is 2.7% improved.