This study presents aspects of development of technology for production of thermal insulation silicate material—Sludgelith, based on drilling waste of oil production. It was found that the oil producing industry experiences a serious problem of processing drilling sludge. This is especially relevant for the fields of the Arctic zone of the Russian Federation, which has the largest number of oil fields. A set of physical and chemical studies of drilling sludge of the Sutorminskoye oil field was carried out. Its chemical and phase composition were determined, which confirmed the possibility of using the waste to produce silicate materials. A raw material composition of thermal insulation silicate material—Sludgelith, including drilling sludge, sodium liquid glass, sodium hydroxide and aluminum powder was developed. A technology for producing Sludgelith was developed, which includes preparation of drilling sludge, mixing of raw materials, production of foamed raw material, its drying at a temperature of 80 °C and firing at a temperature of 900 °C. A set of physical, chemical and mechanical studies of the obtained material was carried out, its chemical composition and foaming mechanism were determined, the effect of firing on the phase composition was established, the structure, strength and density of the material were determined.