Is this internally within the body of the distributor?
IIRC there is a good guide on replacing the seals out there on the web, I dont think I have to spell it out, but another forum pretty much owns all the ABF info.
google 16v distributor oil seal replacement.
Trouble is I also seem to recall the seals are not a service item you cant ruck up to VW or TPS and ask for them
-they want to sell you a complete dissy, that is if they still do entire units.
I would expect there is not that much oil in the head to gush out when the distributor gets removed.