This article investigates the effects of block to block interaction, gravity drainage and capillary continuity, on oil recovery from South Pars oil layer during primary production and gas flooding. For choosing the best oil production and EOR scenarios, the necessity of investigations like this study is obvious. In addition this work can be extended to other Iranian fractured reservoirs. Sensitivity analyses during primary production and immiscible gas injection are performed by using CMG/IMEX simulator1 based on a very simple single porosity model but very close to dual porosity/permeability modules of this simulator. The objectives of this article are: Investigation of main matrix-fracture fluid exchange mechanisms (like gravity drainage and capillary imbibition) during primary production from South Pars oil ring and gas injection into South Pars oil ring. Emphasizing the importance of issues such as capillary continuity between matrix blocks, reinfiltration of fluid from higher to lower blocks and block shape on flow processes and oil recovery during primary production and immiscible gas injection in South Pars oil layer. By characterizing the fractured/non-fractured reservoirs and finding the main oil recovery mechanisms, reservoir management can be done scientifically at the best time and at the best location.