Introduction:
In fully oxidized sewage, nitrogen is present in the form of nitrates (NO3-). This is because during the process of sewage oxidation, organic nitrogen compounds are converted into nitrates through nitrification.

Explanation:
During sewage oxidation, various microorganisms break down organic matter present in the sewage. This process involves two main steps: ammonification and nitrification.

1. Ammonification:
Ammonification is the initial step in sewage oxidation where organic nitrogen compounds are converted into ammonia (NH3) or ammonium ions (NH4+). This conversion is carried out by bacteria and fungi present in the sewage. The equation for ammonification is as follows:

Organic Nitrogen Compounds → Ammonia (NH3) or Ammonium ions (NH4+)

2. Nitrification:
Nitrification is the next step in sewage oxidation where ammonia or ammonium ions are converted into nitrites (NO2-) and then into nitrates (NO3-). This process is also carried out by specific bacteria. The equations for nitrification are as follows:

Ammonia (NH3) or Ammonium ions (NH4+) → Nitrites (NO2-) → Nitrates (NO3-)

Conclusion:
In fully oxidized sewage, the nitrogen that was initially present in organic nitrogen compounds is converted into nitrates (NO3-) through the processes of ammonification and nitrification. Therefore, the correct answer is option 'B' - Nitrates.