In Nigeria, stable oil production and export has been threatened by grave insurgency and asset vandalism orchestrated by Niger Delta indigenes over the years. An underground pipeline system although advanced in technology appears to be a possible solution to curbing pipeline vandalism. This report analyzes the feasibility of underground pipeline systems in the oil and gas sector in the wake of pipeline vandalism viz-a-viz the plan to increase the oil production above 2.3 million barrels per day. It is impossible to isolate Nigeria’s reduced daily output from the frequent cases of pipeline vandalism and it is uncertain whether a transition from surface pipelines to underground pipeline systems would function to eliminate this problem. Hence, this report evaluates the effectiveness of underground pipeline systems and the implications for its success or otherwise.