A theory is presented to simulate the consolidation of elastic porous media saturated by two immiscible Newtonian fluids. The macroscopic equations, including mass and momentum balance equations and constitutive relations, are obtained by volume averaging the microscale equations. The theory is based on the small deformation assumption. In the microscale, the grains are assumed to be linearly elastic and the fluids are Newtonian. The bulk and shear moduli of the solid matrix are introduced to obtain the macroscopic constitutive equations. Momentum transfer terms are expressed in terms of intrinsic and relative permeabilities assuming the validity of Darcy's law. In one dimension, the governing equations reduce to two coupled diffusion equations in terms of the pore pressures of the fluid phases. An analytical solution is obtained for a column with a fixed impervious base and a free drainage surface. Results are presented for cases of practical interest, i.e., columns saturated by oil-water and air-water phases. Results indicate that the presence of a second fluid phase affects pore water pressure and total settlement.