Abstract: An improved method of steam generation for thermal oil recovery by delivering the produced oil-water emulsion, together with a hot hydrocarbon liquid, to a flash vessel where most of the water is flashed off as steam, which can be used for injection in further thermal oil production; while the liquid phase, containing oil, entrained solids and some water is passed to a separator, where a portion of the oil is removed as sales product, most of the water and solids are removed as waste and the remaining oil and traces of water are recirculated to a heater and a flash vessel to provide heat for further processing. If desired, the produced water-oil emulsion may first be passed through a separator vessel which divides the emulsion into three streams, hydrocarbon liquid, gas and water; with hydrocarbon liquid being sent to a coalescer vessel to produce sales quality oil, the gases sent to a fuel or flare system and the water being treated as described above.