Fuel mixture seems rich. 02 sensor?

[Travis Mcgee]

Been driving my E36 for about a week now. Whilst i wouldnt expect it to be frugal on the MPG, it does seem to be getting through the petrol somewhat. Exhausts appear sooty too. I am just guessing, but could this be down to the 02 sensor? Is this a fairly easy job to do at home? Where will i find the thing?
Cheers