This is the replacement for the troublesome oil filter profile gasket on the M50, S50US, M52, S52, M52TU, M54, and S54 engines. The housing is separate from the engine block and in between there is this small profile gasket. The gasket shrinks over time which allows oil to seep out. In our own service shop, it's one of the most common service jobs we perform.
One of the other common leak points is the VAN0S oil line and its seals. Since the line comes out with the oil filter housing anyway you might as well replace the line itself or at least the seals.
On S54 engines (E46 M3, MZ3, Z4 M) there is a flanged head bolt going into the cylinder head, behind the thermostat cover. This holds the left side timing chain guide rail in place and if it's loose or falls out you could have a very serious engine failure to deal with. Make sure to check this bolt while you're replacing the oil filter housing seal. You only need to make sure it's tight. But if it's come loose you may want to replace the seal ring and use a small touch of oil-resistant thread sealer.
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