A 10,000 gallon sequencing batch reactor tank for the on-site bio-degradation of oily sludge. Bacteria already present in and adapted to oily sludge degrade the hydrocarbons found in oily sludge within two weeks from 20,000 ppm to less than 100 ppm. A degradation cycle requires 5 days. After five days a recirculation pump and aeration system are turned off and solids are allowed to settle to the bottom of the tank. An ultrafiltration unit connected to the tank requires approximately 16 hours to process the contents of the reactor tank.