Abstract: A method and system for the downhole separation of a water and oil mixture and disposal of separated water utilizing a hydrostatic pressure head is disclosed. A separator apparatus is located in a wellbore at a depth substantially above a water disposal formation. A mixture of oil and water is received from an oil producing formation and delivered to the separator apparatus. The oil and water mixture is separated into separated water and separated oil by the separator apparatus. The separated oil is delivered to the well surface. The separated water is discharged from the separator apparatus into the wellbore creating a column of water above the water disposal formation. The hydrostatic pressure created by the column of water is ideally sufficient to cause the separated water to dissipate into the water disposal formation.