There are many ways to improve the efficiency of an old oil boiler or furnace. First, determine if your system is oversized. A properly sized oil burner should run 45 to 50 minutes per hour when the temperature outside is the lowest it gets in your area. To downsize, ask your contractor to replace the existing oil burner nozzle with a smaller one.
Reduce the nozzle only one size on a conventional cast-iron head burner. While it is possible to reduce the nozzle size by more than one increment, you should not reduce it below the minimum firing rate given on the manufacturer's rating plate.
In any case, the flue temperature should not get lower than 400 F for an outside chimney. In the combustion chamber, a ceramic fiber lining can be installed over the present liner.
Flame retention head burners are much better at mixing the air and fuel than old cast-iron head burners. They are now almost standard in new units; furthermore, they can be added to most existing systems. A high-static burner will perform even better. Replacing the burner can increase the seasonal efficiency of an old oil-fired furnace by about 15%. Always have an experienced contractor check the system's chimney or flue when a change is made.