I would think, that the oil would be for the Propeller gear box. At some point on the unit a bit above where the prop is, you should find, on the side a large screw. If you undo this, it would give you access to the gearbox oil tank. (There might be one lower down, below where the prop is, that is for draining the oil.)Fill the tank with suitable gearbox oil, to the point of it flowing out. refit screw. On 2 stroke, too much oil in the mixture would give smoke, Try and google the model No, etc. You will find some info as to correct amount of oil to add to the petrol. Failure to add oil to petrol on a 2 stroke, will eventually sieze the engine. ratio of oil can vary, 50 or 100 to 1 can be used, depending on unit, But google it to find out.
Sheepdog, March 2011