An improved production water treatment system and method are disclosed. The treatment apparatus includes a vertically oriented vessel (11) with tangentially disposed injection nozzles including one or more water input inlets (P1,P2) for the introduction of production water and one or more recycle fluid/sparge gas inlets (R1,R2,R3,R4) for the introduction of recycled water from the vessel (11) and a sparge gas. The tangential orientation of the injection nozzles creates a cyclonic flow within the vessel for improved sparge gas bubble/hydrocarbon contact. A hydrocarbon-rich layer migrates to the top surface (14) of the liquid in the vessel (11) where it is removed about a center axis of the vessel (11). The resulting hydrocarbon-lean production water has a sufficiently low hydrocarbon content that it is eligible for more intensive processing, such as with organophillic clay cartridges.