A stator for a rotary internal combustion engine, with a body having an internal cavity. Each end wall has a scavenging cavity defined therein in fluid communication with the internal cavity through a respective scavenging opening extending through the inner surface thereof, and at least one annular oil seal groove defined in the inner surface thereof concentric with the central bore and located radially outwardly of the scavenging opening. At least one annular oil seal is received in each groove and protrudes from the end wall into the internal cavity for sealing engagement with a surface of a rotor of the engine, each seal being biased axially away from the end wall. A rotary internal combustion engine and a method of limiting radially outwardly directed oil leaks in a rotary engine are also disclosed.