The oil thermostat is there to keep
the oil cycling in the engine until it needs cooling and at about 87C it starts
to open the oil passage to the oil cooler.
1992 928GTS midnight blue
The oil thermostat opens when the oil needs to be fed into the oil cooler. It is closed by default. It is mounted in the engine just before the oil patch to the cooler. Here are some pictures of the oil thermostat.
pics made by Kees.
Here is a link to a section of the manuals detailing the oiling of the engine:
Oiling the 928 engine.pdf