Yes, it was on the outside I think. The lagging is a shaped, stitched affair which covers the turbo pretty well. The is some bandage style lagging further on. I don't think there was oil, certainly none visible.
I was not on board at the time - it was being tested after some work on the other stern gland. Luckily enough there were some fitters aboard who had the soles up checking the stern gland, so it was quickly put out, but there is some damage to wiring, hoses, soundproofing, woodwork. I assume they came back on one engine. They are looking into it next week.