So I'm using a tap to chase/clean the threads in the engine block prior to putting the head on and the head bolts back in.On some of the head bolt holes,when I pulled the tap out,it was covered in oil.The tap went in smooth,no binding,and came out just as easy. Should the engine oil I found on the tap be cause for concern?

 

I would say get some brake cleaner and spray out the holes before you torque them back down, according to the manual you want your torque to be dry, aside from lock tight on #11.
Just get the oil out and it should be ok. Don't see why oil in there would be a big deal. Not like the block is cracked there. Might be the that the bold hole is open from the bottom, I haven't been that far into my motor yet. But I did do a head swap and had the oil issue, just cleaned them out with brake cleaner and went to town...

 

Make sure you have a way to blow out the holes after spraying brake clean.

 

Most of those holes are blind - you probably got oil in them from atop the head when you pulled the screws out. (Screw was removed, oil that was atop the head near the screw fell down the hole.) No problem.

As far as chasing the threads - good idea, but I don't generally recommend using a tap to do it. Get an SAE8/ISO 10.9 or 12.8 screw of the size you need, and use a thin cut-off wheel to cut three or four longwise flutes across the threads. Run the screw into the hole as normal - remove it every few added turns to clean the flutes out.

- The hard screw will reform any deformed threads without cutting.
- Using a screw instead of a tap allows you to not worry about cross-cutting threads anyhow.
- The flutes catch crud and keep it in the screw - backing it out to clean out the flutes get the crud out of the way.

I don't like running cutting tools over existing threads, except maybe using a 60* file to clean up external threads on something I can't readily replace (and even then, only rarely. I have thread files in SAE and ISO and a single-thread file, but I've probably used the three of them a half-dozen times in the last 20 years or so. They've saved me on a couple of jobs, but I try to not use them.)