Rapid consumption of fossil fuels has led to the search for alternative energy sources. Bio-fuels as an alternative energy source require cheap and abundantly available substrates to keep the economics of the production process low. The present study was therefore focused on utilizing raw refinery wastewater by the oleaginous bacterium Rhodococcus opacus for converting it into bio-oil via hydrothermal liquefaction of the lipid rich biomass produced during the treatment process. For treating the wastewater, different operating modes using a bioreactor were evaluated including batch, fed-batch, sequential batch, continuous and continuous with cell recycle using low cost tubular ceramic membrane. Among the different strategies, the continuous cell recycle system proved efficient in terms of complete removal of chemical oxygen demand (COD) (99%) and high lipid production (86%, w/w) at a hydraulic retention time (HRT) of 16 h (dilution rate of 0.06 h(-1)). Furthermore, the residual bacterial biomass from the bioreactor was treated by HTL to produce bio-oil which showed excellent bio-fuel properties. This study demonstrated the application of R. opacus for simultaneous wastewater treatment and production of bio-oil for energy application.