Butanoic acid is smelly. Naphthenic acids cause some emulsions acting as salts or soaps, Fine water drops are other types of emulsions in oils. You need break the nap acids soap surfactants. butanoic acid may reduce the inherent pH releasing the cations from the salts resolving emulsions. Coalescing chemicals can coalesce the water to larger drops which can settle out. If its bad use Naphthenic acid inhibitors.