Upstream and downstream petroleum industry generate of significant amounts of oily sludge per day. On the other hand, a disposal of such sludge requires expensive pre-treatments following local regulations. Conventional processes, like centrifugal separation provide sludge volume reduction and water extraction. However, water-in-oil emulsion requires extra stages for phase separation, which overall increases the costs. Therefore, electrokinetically (EK) assisted oil-water phase separation method was considered. In this study, a novel implemented controller, installed into the EK system, permitted to increase the length of exposure time to electrical field, while a significant decrease of energy consumption was observed. The controller, implemented based on Percolation Theory and applied to a linear horizontal EK system, showed enhanced sludge demulsification and improvement the quality of separated fractions. TGA analysis showed a superior quality of liquids extracted by EK with controller comparing to liquids without controller or generated by centrifuging process. A reaction rate with respect to temperature to assess the presence of water in the oil was also defined. The method, shown in this paper, advances the oil-water phase separation and permits for better oil recovery and sludge volume reduction.