On my 2002 Audi A4 the Engine Oil Sensor faulty light has come on. Does this need to be replaced Immediately? The car is running normally. Can I change the sensor on my own?

You really need to run the Diagnostic programme to get the fault code in order to pinpoint the faulty part. See here for possible fault -
http://www.audizine.com/forum/showthread.php/104097-B6-A4-1-8T-Engine-Speed-Sensor-%28G28%29-Replacement

Speed sensor as in transmission like VSS Audi doesnt use on or RPM sensor as in the engine, Or wheel sensor for ABS Audi does use it is it for transmission or engine of wheel speed for ABS

Jim, you are going to have to look at the oil pressure sensor. It may be bad or it may just have a loose wire or bad wire. This sensor picks up the oil pressure and activates your light.

With these it can and usually will, effect timing and acceleration. No you do not need to replace all 4. Replace the bad one, clear the code and go for a good long test drive.

could be sender or pump. do not run the engine until you're sure you have a good pump. Does it blink on and off--coming on mainly at idle? This would be normal for an old engine. If it stays on and the pump is bad, you will ruin your engine. You can try replacing the sending uniot, as that is cheap compared to the pump, but don't run it long to check new sender. If new sender stays red, shut down and replace pump.

is this all mate.look for the oil light switch and over it is a rubber cover ,pull the cover back and you will see that it is full of oil ,clean the cover and fit a new switch,or just leave the cover off so it drip`s down engine .light will then be off

NON-FSI PETROL ENGINES,THE SENSOR SWITCH IS SCREWED INTO THE OIL FILTER HOUSING,REMOVE THE ENGINE TOP COVER.UNBOLT THE COOLANT EXPANSION TANK MOVE TO ONE SIDE .THERE NO NEED TO DISCONNECT COOLANT HOSES.AND DISCONNECT WIRING PLUG FROM SENSOR.UNSCREW SENSOR.....FSI ENGINES REMOVE THE INTAKE MANIFOLD TO GET AT SENSOR....DIESEL ENGINES THE OIL PRESSURE SENSOR IS SCREWED INTO THE OIL FILTER HOUSING ASWELL.PRISE OUT THE CAPS,UNDO THE NUTS AND REMOVE THE PLASTIC COVER ON TOP OF ENGINE.REMOVE THE INSULATION BENEATH COVER (WHERE FITTED).DISCONNECT WIRING PLUG FROM SENSOR AND UNSCREW......BE PREPARED FOR OIL SPILLAGE.. HAVE A NICE DAY!!

There are potentially two different problems here.
1. A fault with the actual oil pressure.
2. An electrical fault with the switching circuit.

If you are confident the problem is not with the oil pressure, disconnect the wiring from the switch for a period of time. If the light still comes on periodically the fault must be with the wiring circuit shorting to earth. There will be no fire hazard to this approach as the voltage will drop over dash lamp.

However if the problem is with the oil supply system, the danger with this approach is you are potentially unaware of a serious problem

Such as the oil filter collapsed or the oil pressure release spring could be jammed open/closed which would cause the engine to not have the correct operating pressure.

The code system too lean, is caused by the bank 1 02 sensor, as far as the oil light coming on with oil ok,I would say the oil sending unit. Have those checked or replaced. Without testing this and that, it's hard to say what's causing it.

Hi, I had a similar problem with my Audi A4 2.0L sport, year 2002, the mechanic advised me that this was to due to the cranckshaft sensor being faulty, once he changed this all was good.