In a waterflood it is the endpoint of the oil relative-permeability curve, written Sor or Sorw. It is a local saturation in rock the water has swept. It is not the field recovery factor.
Oil left because the water never reached that part of the reservoir sits on top of this residual. A chemical flood or a miscible gas flood is an attempt to lower the residual itself; a plain infill well is an attempt to sweep rock that was missed.