No, your seeds should not become oily. I think you have bad seeds or not original black cumin seeds. I sure hope you did not order black caraway seeds.

No do not add water, you should use a regular stainless steel pan. An alternative way and safer way to cook the seeds is in an oven on a very low temp. Checking every few minutes. Keep tasting them till they are bland.

You may want to simply buy the oil if you cannot get the hang of this. There are many good companies in europe also to get seeds. Look for Hemani Oil. This is one of the Best or a good Egyptian oil. Becareful about Saudi oils as most are grade 2.

Sara