Progressing cavity pumping technology will be extensively applied for oil exploitation because of its advantages such as lower cost, higher adaptability for oil viscosity, sand-content and oil-gas ratio. This pumping system consists of motor, reducer, coupling, progressing cavity pump, variable frequency converter and protector. Among them, oil-submerged planetary gear reducer is one of the most important transmission components, which transmits torque and adjusts the rotational speed between motor and pump. Because the reducer is required to work successively under the harsh down-hole condition of high temperature and pressure for long span, the reliability design and fatigue life become the key technical problems for research. Based on reliability theory and optimum design method, the mathematical model for reliability optimization of NWG-type gear reducer is built up and optimum geometrical parameters are found in this paper. It is testified that, with such parameters, the diameter of the reducer can be reduced, daily oil-output can be increased and life span of the pumping system can be thus lengthened.