High sensitivity of a distributed optical-fiber vibration sensing (DOVS) system based on the phase-sensitivity optical time domain reflectometry (Φ-OTDR) technology also brings in high nuisance alarm rates (NARs) in real applications. In this paper, feature extraction methods of wavelet decomposition (WD) and wavelet packet decomposition (WPD) are comparatively studied for three typical field testing signals, and an artificial neural network (ANN) is built for the event identification. The comparison results prove that the WPD performs a little better than the WD for the DOVS signal analysis and identification in oil pipeline safety monitoring. The identification rate can be improved up to 94.4%, and the nuisance alarm rate can be effectively controlled as low as 5.6% for the identification network with the wavelet packet energy distribution features.