A system includes a casing-liner, a first downhole separator, a production pump, and a second downhole separator disposed within a wellbore casing disposed in a wellbore. An annular disposal zone is defined between the casing-liner and the wellbore casing. First downhole separator is configured to receive a production fluid from a production zone and generate a hydrocarbon rich stream and a water stream including a solid medium. Production pump is configured to pump the hydrocarbon rich stream from the first downhole separator to a surface unit. Second downhole separator is configured to receive the water stream including the solid medium from the first downhole separator, separate the solid medium to generate a separated water stream, and dispose the solid medium to the annular disposal zone. The system further includes a tube configured to dispose the separated water stream from the second downhole separator to a water disposal zone in wellbore.