In the past, and in some jurisdictions today, standard equipment for a lifeboat included storm oil, oil that was used to calm the waves in stormy seas. However, this oil should not simply be poured out onto the water, but dispersed by an oil bag.
The oil bag was a tapered bag that fitted into the sea anchor. A sea anchor is a cone-shaped drogue that is released behind the boat; this slows the boat and keeps it pointed leeward. Into this, a canvas oil bag is inserted to rest near the tip of the cone, where it will slowly dribble oil into the water, resulting in a calmer 'duck pond' of water around the boat.
The oil bag was fitted to the sea anchor, but other than this could vary a good bit in construction. Many were simply a bag with a pinprick at the pointed end, to let oil drip out slowly. Others used a cork, through which oil could seep. Many bags were additionally filled with oakum (recycled rope fibres) or waste cotton to absorb and slowly release the oil.
These bags were required in the UK until 1998. It appears that something akin to this is still required in the USA, under 46 CFR 169.529: "One gallon of vegetable, fish, or animal oil must be provided in a suitable metal container so constructed as to permit a controlled distribution of oil on the water, and so arranged that it can be attached to the sea anchor."
The most common question, of course, is "does this really work in a serious storm?" The answer seems to be simply that they worked well enough that it was worth having them. They couldn't, of course, prevent the enormous storm swells, but they were effective in preventing waves breaking over the gunwale when the ship was against the current or when large swells overtook the boat from behind. It was also useful to have the calm puddle of water around the boat when picking up survivors, or, in turn, when the lifeboat itself was recovered.