not knocking the garage in anyway as on most cars a 02 sensor fault is just that,, but on a prince engine its never that straightforward will explain the chain of events,,
timing chains stretch rule of thumb is around 60.000 miles replace it this ensures dont have the outcome you are having at present,
so what happens is the chain stretches some might do 100k before snapping off top guide or chain slips around worn out bottom sprocket and tension cant cope with the length of the chain,, trouble is the engine has now run with a retarded timing and this causes a lot more heat and pressure it also effects the overlap on exhaust valves and inlet valves as well,, ie overlap is how car designers add power to a engine by using opening the exhaust valves and inlet valves at same time briefly this causes a low suction effect within exhaust and inlet tracks and suck more clean air in to the cylinder as such, this must be set to within a few degrees, trouble is timing stretches in such a way as its got twin cam sprockets it plays hell with it and drops unburnt petrol on to 02 sensor ie upstream one, this also causes massive heat within the cat and exhaust ports this will melt 02 sensors and valve stem seals even melt the cat in sides,, on some cars more so turbo cars will melt and crack valves also head gaskets as well,, and very bad ones will do same to piston rings, piston rings are made to with stand the heat of normal running but those engines driven for 40k with timing retarded and a bi-product would also be the driver would be making up the power short fall with pressing the throttle even more and thus giving more fuel to the problem,
also at 127.000 miles on a car driven for a fair while with timing issues i would fear the worst case and you would be so gutted to spend out the money for stem seals and not do the chain ie the real issue to find within a 10k the same issue is back again as so many have, ironically i have over the years turned my back on a lot of work from people who say just do the stem seals to later find out another workshop had just done that to find it snapped a chain shortly after doing it,
hence why would try the seafoam it see what you have got after a couple of weeks driving it around then rather use 5/30w engine oil use a fully synthetic 5/40w see what that brings you worth a punt,, but still you need to know what state the timing chain is in,,
another thing to think about there is a revised thermostat housing that reduces the coolant temps this could also help oil burning ie engine oil is tested to 100c prince engines are 109c on pre update housings as its a piloted thermostat on them its controlled my the cars mev17.4 ecu,, very complicated design of a engine and then add the short coming of psa and bmw and mini a lot of garages turn their back on them or slate them,, i know from years of dealing with them its all preventing the bad stuff ie chains and heat control etc,