If oil and water enter as a mixture, you would need Eulerian framework to simulate the multiphase physics, which SimCFD doesn't have. If you just need to simulate the interface between the oil and water, you can use free surface model, but this case doesn't sound like that, as the phases appear mixed. If the dispersed phase (I presume oil) has very small volume fraction (less than 5-10%) you may want to use massed particle that use Langrangian framework.
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