Abstract: This study examines the impact of foreign direct investment in oil sector and environmental Degradation of oil exploitation. It also examines the socio-economic for sustainable development in Niger Delta. Applying Logit regression analysis on the surveyed data obtained from two oil rich communities in the Niger Delta. The results of the study shows that a unit increase in the volume of FDI into the oil sector significantly raises oil spillage, land degradation and air pollution. Consequently, while health hazard of the people is rising and their health is worsen, agricultural output fell. Compensations paid by oil firms to rural farmers and fishermen when their personal rights are violated have not significantly impacted on agricultural outputs, although it does enhance their income level and education access. The paper establishes that natural resource endowment determines the level of economic activities and income generation capacity but not the standard of living. There are needs to set environmental policy and to monitor progress towards meeting society environmental goals; a reliable information system and database for degradation of environment are needed.