That would be the high speed oil pressure sensor telling you there is a problem with your oil pressure.Your computer is reading insufficient oil pressure to maintain engine integrity above 2000RPM.
There are 2 oil sending units mounted on top of the oil filter housing. I don't have wiring for your year so I can't tell you for sure, but on my 1992 they are brown ( low pressure) and white (high pressure). Check the wiring carefully for cracks or bare spots in the insulation and fix any you find. Also make sure the wiring is good at the plug-ins. VW wiring won't tolerate cracks and often will break right where it meets the plug-in. Also if you have recently moved these wires you may have plugged them in wrong. I would most definately get the pressure checked with a mechanical oil pressure guage to be sure of the pressure. If it's good, 29 PSI at 2000 RPM then I would be looking at a bad sending unit. Hope this helps.
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