So far as I understand water can remain in dissolved form upto 500ppm normally, if the quantity is increased it is emulsified, and still more addition of water crosses the saturation limit of emulsification and water separates out as free water.
Here most of you have taken 200ppm as saturation point after which water comes to free stage- i think it is wrong. Once the oil has become emulsified, it is difficult for centrifuses to bring it to normal condition.Centrifuses are capable of removing only free water and a small fraction of emulsified phase, it can never remove moisture in dissolved phase.
Sanjay Prabhu, is it advisable to heat the oil to 80 degree C? There is one Klarol Oil Cleaning System which can easily remove water by heating the oil upto only 55 degree C.