It is likely that oil began to leak onto hot parts of the engine during the flight, thereby producing the smell detected by the pilot. The latter took the decision to abort the flight and to land as soon as possible at an accessible aerodrome.
However, he did not perform a troubleshooting procedure once on the ground, considering that the visual examination and start-up checklist were sufficient to ensure that the engine was operating correctly. This led him to erroneously conclude this was a false alert.
The fire, which was caused by escaping engine oil, occurred while the aeroplane was stationary at the refuelling area, preparing for a new take-off, even though the failure had not been detected.
The investigation was unable to determine with certainty the failure that allowed the oil to escape.
By intentionally choosing to abort the flight, the pilot probably prevented a more critical situation from arising in flight and limited the consequences of the failure.