Yes, it sounds like worn piston rings. But perhaps the oil problem is only caused by a bad valve seal on #4. In any case you can test to find the cause before you begin.

1. Perform dry compression test
2. Perform wet compression test
If the wet test is normal but dry test is low, it needs new rings. If the compression test is good, maybe only the head needs refurb (new valve guides and seals, which are usually bad in a high-mileage A12).
Details: Compression Test

The steps for engine rebuild are in the Datsun factory service manual. Or other brand (Gregory's, Chilton, etc). They are quite detailed.