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To prepare chilies for preservation in oil, most people slice them into strips. However, smaller chilies may be left whole. Leave in as many seeds as you want depending on the heat level you desire. Lay them out on a baking sheet in a single layer. Cooking the chilies before preserving them will help to bring out the best in their flavor. You can roast them over a grill or a gas burner. Preheat your oven's broil, or prepare your grill. Roast the slices until they're charred. Under the broiler, this should take just a few minutes. Turn them once during the process so they cook evenly on all sides. Put the peppers in a clean jar or bottle. You may want to use a decorative olive oil container. Pour olive oil over the peppers until they're entirely covered. Store the jar in a cool, dark place.
Wash and slice the chilies. Broil the pepper pieces. Pack the peppers in olive oil.