This study explores the Land Use Land Cover Change (LULC) of oil industry on environment and local communities in Melut County located in Upper Nile State in South Sudan; as well as engaging the stakeholders in oil sectors to adopt the best techniques of sustainable oil exploration and production in the area. This research is based on remote sensing imageries collected for 2000 and 2018. The satellite imageries data were collected from Landsat-5 TM and Landsat-8 ETM+ for the two points. These satellite imageries were used to reach inaccessible areas in the Area. ENVI 5.1 software was used to analyze the satellite imageries. The results reveal tremendously significant environmental degradation as a result of land use changes over time that leads to deterioration of the livelihoods of the oil producing communities in Melut County. The main contributions to LULC were from exploration and production activities such as drilling, and oil processing. Produced water and oil well pads were the major catastrophes that lead to destruction of croplands, damage of vegetation cover, and contamination of surface and ground water in the area. There are inadequate social services in the areas around oil fields; hence, the areas are characterized by poverty, lack of access to resources, unimproved social amenities and vulnerability to the poor unhealthy conditions in the oil environment. Furthermore, the government should regulate the oil industry by scrutinizing any environmental violation, and heavily fine the non-complying individuals and companies.