The paper is set to examine and review the legal framework of the Nigerian oil and gas industry, assessing its efficiency, identifying the major issues and to make recommendations on the way forward in the environmental regulation of incidences of oil spills and gas flaring. Essentially the paper established that the environmental policies and strategies of the Nigerian oil and gas industry have impacted positively on the Nigerian environment for some years but with a rather slow effect. Factors affecting the effectiveness of the existing laws and the functioning of the agencies, lack of funding, lack of human resources, corruption, insufficient data and the influence of Multi-National Corporations. The prospect of environmental policies in Nigeria some consider to be evolving while some believe it is ineffective. Adopting a critical approach this article presents a detailed and critical review of the legislative and institutional framework of environmental protection and pollution control in the oil and gas sector in Nigeria. The paper further investigates the problems of compliance to these regulations established by the government which eventually accentuated the rate of environmental oil pollution and gas flaring in the region. It contends that the problems in the oil-producing communities could be linked to the ineffective and unimplemented oil and gas regulations meant to ensure a clean, safe, preservation of and habitable environment. It further concludes and suggests that Nigeria must exhibit the political will to enforce the set-out policies regulating the oil and gas industry to ensure environmental sustainability.