B737 Captain reported another flight crew observed a fire on the number 2 engine during taxi and notified Tower. The engine was shut down and after Airport Rescue and Firefighting (ARFF) checked the aircraft to ensure there was no longer any signs of fire; the aircraft was taxied back to the gate. Mechanics stated the engine may have had residual engine oil pooling from a borescope procedure that was done the night before.

Narrative

As we were taxiing to line up and wait on Runway XX ZZZ; the aircraft behind us informed ZZZ Tower that we had a fire on our #2 engine. We had no abnormal engine indications; no fire warning or overheat indications; nor any smoke or fumes reported in the cabin. We shut down the engine in accordance with QRC / QRH engine fire procedures. ZZZ Tower requested fire response when they were informed of the flames. The Fire Department quickly arrived and confirmed there were no flames and took a temperature check of the engine. The Fire Chief indicated there were no longer signs of fire; no aircraft damage; and a normal temperature. The Fire Chief believed it was safe to taxi the aircraft to the gate and followed us to Gate XX. We arrived at the gate and deplaned all passengers with normal procedures immediately upon arrival.While debriefing with the mechanics that met us at the gate; we were told the engine was borescoped the night before. The mechanics said the procedure often results in some residual engine oil pooling in the engine and they have seen this before.