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It is an oil pressure sender. And it's put there to avoid having it visible where it usually is in a front engine car, at the rear of the engine, just behind the intake manifold. The extension you see is needed to clear the block and fuel pump IIRC. Now here's the thing, there's a rumor that these extensions, long and unsupported, in time, can vibrate to starting to crack=no oil pressure. I don't know if this is true, if it ever happened, or if it's one in a million, but I didn't dare do it, I'd rather have the sender hideously at the back than an engine failure far away from home maybe.

Others, is this a myth or for real? Something to do with the material used for the extension?
This is definitely a Cleveland engine as noted by the vertical bolt pattern on the fuel pump . The sending unit extension has been used for literally millions of miles on countless Ford vehicles for probably 30+ years. I have never once had one fail or heard of one failing. They are made of steel and are fairly heavy. Maybe there are aftermarket versions that are prone to failure but I have not heard that.

Ron
As Ron says, this is the only oil sender position available for a 351-W. The 351-C has two available- one as shown above the fuel pump and one at the back of the block. The only known negative to using the fuel pump mount on a Cleveland is, its oil pressure reading will be quite a bit higher than all 351-Cs that use the rear mount so readings will not compare.

On a 351-C, the fuel pump sender mount gets oil directly from the pump while the rear sender mount gets oil after the 16 lifters & all the bearings have taken a sip. I've seen as much as 30 psi gauge difference on the same engine, which sometimes leads to confusion.

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