Fossil fuels, oil, coal and natural gas were formed millions of years ago, when prehistoric plants and animals died. Their decaying bodies were pressed under layers of rock and earth, and were fossilized.
The modern life, which we lead would be impossible without fossil fuels. These fuels supply heat and energy to our homes, industry and electricity.
These fossil fuels are processed to produce many other useful material like plastics, dyes and bitumen. To find out oil, test drilling is done over specific area as told by geologists.
Below Fossil Fuels info from Wikipedia (Read More):-
Fossil fuels or mineral fuels are fuels formed by natural resources such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years.[1] These fuels contain high percentage of carbon and hydrocarbons.
Fossil fuels range from volatile materials with low carbon:hydrogen ratios like methane, to liquid petroleum to nonvolatile materials composed of almost pure carbon, like anthracite coal. Methane can be found in hydrocarbon fields, alone, associated with oil, or in the form of methane clathrates. It is generally accepted that they formed from the fossilized remains of dead plants and animals[2] by exposure to heat and pressure in the Earth's crust over hundreds of millions of years.[3] This biogenic theory was first introduced by Georg Agricola in 1556 and later by Mikhail Lomonosov in the 18th century.
http://en.wikipedia.org/wiki/Fossil_fuel