The oil-free screw compressor element
No oil means that there is absolutely no essential oil for sealing the rotors and for cooling the Oil-free Screw Air Compressor compressed air flow, elements and rotors. 
… The element is cooled by cooling drinking water that flows through special pockets in the component casing.
In a lubricated screw compressor, the lubricant will come in direct in contact with the compressor inlet air and compressed air. … The oil contains anti-oxidants to attempt to reduce the break down of the lubrication properties due to internal conditions.