Plain English Meaning
The leftover oil that stays inside the engine even after you drain it. It still has weight, so it counts as part of the aircraft's basic empty weight rather than something added later.
Full Definition
Engine oil that remains trapped in the engine, oil cooler, lines, and other internal passages after the oil sump has been drained, and which therefore cannot be removed through normal draining procedures. For weight and balance purposes, undrainable oil is considered part of the empty weight of the aircraft.
Context Anchor
Seen in weight-and-balance records, especially when figuring what weight is already built into the airplane before adding people, baggage, and usable fuel.
Derivation
From 'un-' (not) + 'drainable' (able to be drained out). The term simply describes oil that cannot be drained — but the weight and balance significance is what makes it a defined item rather than just leftover residue.