I have a 2006 G35 6MT and got the P1078 code for the exhaust valve timing control position sensor bank 1 (this picture helped a lot). So I ordered a replacement part and swapped it out.

When looking at the old sensor, there was oil all over it (the portion that sits inside the engine and reads data, not the outside of the sensor), and I want to ask if this is normal operation for this sensor and expected, or a sign of a different issue of oil leak or something?

Thanks in advance.

 

Yes that part on the back of the engine is the cam sensor, it goes into the back of the head at the top in the valve train and it's basically swimming in oil the whole time it reads the ring on the back of the camshaft.

There's an o-ring on it to keep the oil inside the valve cover area.