Abstract: The Xijiang depression in the Pearl River Mouth Basin consists of two adjacent sags, the Panyu 4 sag and the Xijiang 36 sag, in which quite different oil and gas exploration prospects have been revealed by drilling. The proved reserves of Panyu 4 sag have exceeded 100 million tons, while no commercial discoveries been found in the Xijiang 36 sag so far. In order to reveal the causes of such a difference in oil and gas geological conditions, it is necessary to carry out a comparative studies of the two sags. In this paper, the Wenchang Formation, the main source series, is selected as the key point for breakthrough, and the hydrocarbon source potential of Xijiang 36 sag is systematically evaluated through detailed sequence stratigraphic studies. Based on the data of seismic, drilling and laboratory analysis, six third-order sequences have been identified in the Wenchang Formation in both of the Xijiang 36 and Panyu 4 sags. There are fan delta, braided river delta, sublacustrine fan and lacustrine sedimentary facies in the Wenchang Formation of Xijiang 36 and Panyu 4 sags, and the sedimentary facies belts also show a cyclic patterns vertically. In the different stages of rifting and/or boundary fault activities, the scale of delta depositional system in steep slope zone and gentle slope zone shows different evolutionary features, whereas the scales of Lake Basin and its deep part in the middle lake expanded in the beginning and shrank later on. The sedimentary facies belt also has obvious migration in lateral direction. In the Wen-6 Period, the deposition was initiated in the Xijiang 36 sag, and then extended to Panyu 4 sag with time. In the period of Wen-1, the lake basin occurred only in the Panyu 4 sag and disappeared in the Xijiang 36 sag. The distribution pattern of semi deep and deep lake deposits and study of sediment sources suggest that the high-quality hydrocarbon source potential values of each third-order sequence in the two sags are comparable and the source rock conditions are basically the same in the two sags in the wen-6 and wen-4 periods. As the main source rock of the Panyu 4 sag has been confirmed by exploration, therefore, it is considered that the exploration potential of Xijiang 36 sag with similar hydrocarbon source conditions should not be underestimated too early.