The term fossil fuel is a misnomer. In fact, oil does not come from the fossils we know today at all. There are no calcified dinosaur bones in the recipe for oil.
Beginning 400 million years ago, single-celled plants and animals, called plankton, lived in the ancient seas and lakes with other aquatic creatures. Over time, the plankton, animals and plants died and sank to the bottom of the water in which they had lived.
Layers of sand and mud covered the bodies of the single cells, the animals and the plants as the waters moved by current, wind or shifting of the earth's crust. The pressure of added mud and sand compressed the layers already on top of the carcasses into hard sedimentary rock. Now, there was rock beneath and above the bodies.
Bacteria that lived in the mud fed on the bodies of the dead plants and animals beneath the sedimentary rock. As the bacteria died out, for lack of food, their cells degraded in their own waste products. A black ooze of decaying bacteria and waste filled the pocket between the rock layers.
Over millions of years, the heat produced from the decay and the added pressure of more and more layers of rock compressed this black ooze into crude oil. Other pockets shifted as the crust of the earth moved due to volcanic and glacial activity. This shifting produced enough pressure to change the hot, black ooze into crude oil. It is from this crude that petroleum products are refined.
The crude oil did not actually come fossils, since the bodies and the bacteria were never dried and calcified into fossils. Instead, oil comes from aquatic bacteria, creatures and plants that lived contemporaneously with the fossils that we find today.
Today, we drill from few yards to a few miles into the ground to reach the deposits of crude oil primarily in Saudia Arabia, Russia, United States, Iran, China. Depth of the deposits are due to the moving of the earth's crust plates. Some drilling does take place on land, although the majority of drilling occurs beneath the gulfs and oceans.
Geographic surveys show that both large and small deposits of crude oil exist in other parts of the world that have not yet been drilled.