I am sure this thread is already long enough in tooth...but.
Using oils on paper is quite an established technique, it even has a fancy French name "Peinture a l'essence" this refers to the oil being drawn from the paint by the porous surface of cardboard or what was/is called cartridge paper, first by Degas then Toulouse-Lautrec . Now, of course, Arches has produced a sized paper expressly for oils, so there may not be a need to size your own...though I have tried it and have found it's surface too smooth for my taste.
As had been mentioned earlier, shellac is probably the oldest (time tested) and effective way to seal paper as had also been stated, there is no use of water, shellac being an ethyl base.
Nice informative thread...there is not a whole lot of info about this in the general art biz genre!
I don't know about Degas - but i read a few years ago that Lautrec used to strain his oils through a gauze and wait for the oil to seep out - he then painted/drew with the residue which was an oily chalky paste hence his very drawn style and perhaps how he was able to "paint" on paper. I've searched for the reference but can;t find it. Perhpas the minimum of oil on a sealed paper was what Lautrec and Degas used?