The turbines in the turbo housing require oil to lubricate the bearings on their shafts. They spin at very high revs!. The oil is supplied via an oil hose fed from the engine. If the seals around the bearings are leaking, oil will be blown into the cylinders, mixed with the charge. That will cause blue smoke.
The charge is passed through the inter cooler on the way to the combustion. If there are any leaks, you will see oil here as well.
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Worth his V8 in gold
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