Surfactant are some of the most expensive chemicals used in Enhanced Oil Recovery (EOR). Thus, the reason of developing lignin based surfactant system for EOR is to lower the cost as it does not tie to the price of crude oil compare to other petroleum based surfactants. Besides, lignin could be extracted from oil palm waste that is available abundantly in Malaysia. The aim of this study is to determine the amount of lignin compound extracted from the oil palm Empty Fruit Bunch (EFB) by using ultrasound-assisted technique, to determine formulations of lignin based surfactant for EOR applications, and to determine the oil recovery performance of lignin based surfactant through surfactant flooding. The results of the study showed that the extraction of lignin using ultrasound-assisted technique enhanced the extraction amount of lignin, though it did not alter the lignin composition and structure, compared to traditional pulping process. The formulation of lignin based surfactant at 2 total active surfactant showed good stability phase behavior and interfacial tension. The oil recovery from displacement test also showed significant results where the best formulation lignin based surfactant able to recover 11 of Oil Originally In Place (OOIP) after waterflooding, and is comparable to commercial surfactant. © IEOM Society International.