Seafloor pipeline transport of viscous crude oil may be problematic because of high oil viscosity. This problem is compounded when water cut increases and stable emulsions form that have apparent viscosities significantly exceeding the oil itself. Reducing such high viscosity requires better understanding of emulsion properties. This study focuses on the characterization of water-in-oil emulsions by nuclear magnetic resonance (NMR) and their rheological behavior with and without demulsifiers present. Experimental data from NMR experiments show that the emulsion is very stable and needs demulsifier that can enhance the coalescence between droplets and hence aid separation. With presence of an optimal nonionic demulsifier, emulsion viscosity can be reduced by as much as one order of magnitude and reaches the oil viscosity at high temperatures. The selection of optimal coalescer depends on operation conditions. Increasing the temperature requires more hydrophilic coalescer to separate water from oil. Knowledge of emulsion behavior at different conditions helps in selecting the optimum parameters in either the early design phase or the oilfield operation.