Nano-sized rare earth metal oxide particles are prepared from aqueous reverse micelles. The engineered nanoparticles have large surface area to volume ratios, and uniformly incorporate a surfactant in each particle, so that when applied to the inner surface of a pipeline or sprayed onto a fluid stream in a pipeline, the particles reduce the roughness of the inside surface of pipe being used to transport fluid. The application of a nanolayer of this novel nanoceria mixture causes a significant reduction in pressure drops, friction, and better recovery and yield of fluid flowing through a pipeline.