In the present study a numerical investigation is performed by using computational fluid dynamics (CFD) aiming to figure out and maximise the separation efficiency of an oil separator by changing the various design parameters. A typical automotive swash plate type compressor is chosen for this numerical investigation. Basically oil separation becomes very important where oil return is quite problematic due to the multiple constraints in piping layout design. Efficient oil separation makes the compressor lubrication easy and prevents from seizing during running. It also enhances the heat transfer from heat exchanger by reducing or separating oil from the refrigerant flowing in the AC circuit. A computational method is proposed to analyse an oil separator fitted in a swash plate compressor. Eulerian multi-phase model is employed to simulate the oil and refrigerant mixture model. Separation efficiency is predicted numerically by changing the nozzle diameter, separator diameter and height. Further to that a different approach (based on density difference) is utilised to maximise the separation percentage. It is observed that by employing such approach separation efficiency increased drastically. Thus a numerical method is established for predicting oil separation which becomes key element in the early stage of compressor design to avoid field failure.