Disclosed is an oil extraction and gas production method capable of in-situ sand control and removal by downhole hydraulic lift achieved by downhole oil extraction and gas production system and ground oil extraction and gas production system. The downhole systems mainly comprises a double-layer tube, a double-layer tube reducing joint, a double-layer tube packer, a hydrodynamic turbine motor, a sludge screw pump, a soil-sand separator and a negative pressure absorber; the ground system comprises a power fluid pressurizing module and a mix fluid treatment module. The present application lowers the difficulty of pumping and lifting downhole formation fluid; achieves downhole and in-situ sand control and sand discharge, alleviates the blockage and erosion of sand particles on equipments and reduces energy consumption; decreases the production cost and improves the operation efficiency, therefore is suitable for oil extraction and gas production in high sand content wells.