Oil surveillance contracts have become a critical component of Nigeria’s security strategy to combat oil theft and pipeline vandalism in the Niger Delta. This study examined the impact of these contracts on oil output and environmental protection, utilizing a mixed-methods approach that combines primary data (survey and interviews) with secondary sources. A structured survey was conducted among 150 respondents, including oil company officials, security personnel, local contractors, and community members. The findings reveal that 72% of respondents believe oil surveillance contracts have significantly reduced oil theft, while 28% argue that collusion between surveillance contractors and illegal oil bunkerers remains a major challenge. Oil output in secured areas has increased by 15–20% over the past two years, aligning with reports from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). However, the study also highlights environmental concerns. 65% of community respondents express fears over the militarization of oil-producing areas, citing human rights violations and forced displacements. Moreover, 53% believe that host communities are inadequately involved in the surveillance process, underscoring the need for a more inclusive approach. The study concludes that while oil surveillance contracts have enhanced security and oil production, their long-term success depends on strengthened oversight, environmental accountability, and community participation. Without these measures, surveillance efforts risk becoming a short-term fix rather than a sustainable solution.