The remaster is called Skyblivion, although that's become a bit of a misnomer. The starting point was remaking Oblivion in the somewhat updated engine of The Elder Scrolls V: Skyrim, but in the years since then they have also redone the lighting and rendering engine, so it's even better than Skyrim and looks a lot more modern.
At the moment the exterior worldspace is almost complete and the team are working on the dozens of dungeons and shops in the game. For the dungeons they are going beyond just recreating locations but also redesigning dungeons to be larger and more interesting (Oblivion's dungeons were infamously tiny, often not being more than very modest caves). They are also creating new art assets for the entre project and have integrated every quest from the original into the game, although there are lots of issues and bugs they are tracking down and resolving.
No timeframe for completion is given, but from the look of it and bearing in mind this is a small team working in their own time, this may now be down to a couple of years away. Impressive given the mod's long, long-gestating status.
Bethesda themselves have been supportive of mods, especially mods that update and upgrade their older games. Despite re-releasing Skyrim on multiple platforms with updated graphics, Bethesda have indicated a reluctance to go back and update Morrowind, Oblivion, Fallout 3 and Fallout: New Vegas, noting that the technical compromises they made to get those games out were severe and they'd feel the need to completely remake them, which would be a huge amount of work they'd rather divert to working on their new games.
Bethesda are currently working on a new game in a new franchise, Starfield, and Oblivion's successor, The Elder Scrolls VI. Neither project has a timeframe for release at the moment.