Oil pollution remains the most persistent environmental and human rights challenge in the Niger Delta. Despite contributing over 80% of Nigeria's foreign exchange earnings, the region suffers severe ecological degradation, loss of livelihoods, and recurring oil spills resulting from equipment failure, operational negligence and third-party interference. While Nigerian law provides both common law and statutory remedies for compensation, victims continue to face inadequate redress due to systemic gaps in liability determination, assessment and enforcement. This study examines the coherence and effectiveness of the compensation framework for oil pollution in Nigeria. Adopting a doctrinal research methodology, it analyzes primary and secondary sources including the Oil Pipelines Act 2004, NOSDRA Act 2006, Petroleum Industry Act 2021, case law, and international environmental principles such as the polluter-pays principle and sustainable development. The paper finds that common law remedies of negligence, nuisance and the rule in Rylands v Fletcher (1868) are fault-based, technically demanding and exclude users of communal resources due to the proprietary interest requirement. Statutory remedies, though based on strict liability under Section 11(5) of the Oil Pipelines Act 2004 and Section 102 of the PIA 2021, are undermined by the wide sabotage defence, a flawed Joint Investigation Visit (JIV) process dominated by oil companies, reliance on outdated OPTS compensation rates (1997/2014), a restrictive 12-month limitation period, and weak enforcement by NOSDRA. The study further critiques Section 257(2)-(3) of the PIA 2021 which imposes collective punishment on host communities for acts of vandalism. The paper concludes that the current framework is incoherent and inadequate. It recommends the establishment of an independent environmental compensation tribunal, reform of the JIV process, development of a modern valuation guideline that includes pure environmental damage and future loss, amendment of Section 257 of the PIA 2021, strengthening of NOSDRA, and extension of the limitation period.