I attached pictures below I apologize for the horrible quality it doesn't show the exposed wiring where the rubber has split open... Stupid question but it's a moulded stator, can I heat shrink tube these or would that not get a good enough seal from oil exposure?

 

It's worth a try. Oil is a very poor conductor. If only one wire is split, seems like you should be fine.

Your pictures are very confusing, at least to me.

John