Micropaleontology - huh?
What do fossils and paleontology have to do with oil? You're not the first person to ask this question. Let me try and answer this from a decidedly non-geological perspective.
Face it, your room is a mess. Every day for the last month, you've come home and thrown all of your papers from school to the floor. So many papers, in fact, that your entire floor is covered in them. Of course, being at least slightly organized, you had put a date on all these papers before you carelessly tossed them to the ground. So, over 30-days time (let's say May 1 - May 30) you've accumulated quite a bit of clutter. What happens if you now decide to start burrowing through these papers, making a hole through them, in the corner of your room? What you'll find is that the papers on the top will be the most recent ones (May 30), and as you dig deeper, the papers get older and older, until the papers at the bottom are the oldest of all (May 1). This is an example of the Law of Superposition, discussed in Geology Basics under the Sedimentary Rocks section.
Let's take this a step further. You now decide (for what reason, I don't know) to tunnel another hole straight down in the opposite corner of your room. Notice that the dates on those papers are the same, and that you came across them in the same order as you did in the other hole. You can assume that, if these layers of paper cover the entire room, even though you didn't dig any more holes, that papers with the same dates, in the same order, would be found in any hole you drill. If we took out one of the walls of your room and viewed the papers from the sides, as you'd probably guess, you'd see papers from May 20th stretching in one continuous layer across the room. This layer of papers would be just below papers dated May 21st, and just above a layer dated May 19th.
OK, let's get into the world of fossils. Many people think of fossils as big chunks of rock containing a T-Rex tooth or a large trilobite. Oil geologists, however, are more concerned with tiny fossils, known as "microfossils", that may be smaller than the head of a pin. When an oil well is drilled, bits of pulverized rock come back up the surface. Sometimes, these bits of rock include microfossils. Just like the papers in your messy room we just got done talking about, the further and further down you drill, the older and older these microfossils get. Geologists and paleontologists have been able to put dates on some of these fossils. After thousands and thousands of wells were drilled, it became obvious that certain microfossils were only found in certain rock layers. These microfossils are called "index fossils". When you drill into a layer containing one of these index fossils, you are pretty sure you know the age of that rock.
So what? Well, this is a lot more important than you might think. This is because certain rock layers that may contain oil can now be more easily found. Let's say a well is drilled, and it goes through rock layers containing microfossil "A", then "B". As it goes deeper still, it encounters microfossil "C", then strikes oil. If a similar well is drilled nearby, and we hit microfossils "A" and "B", we can expect to see microfossil "C" next, and with it, possibly oil. This can be especially important if each layer of rock the well drills through all look the same. As an example, sometimes a well can be drilled through 500 meters or more of shale, and it is hard to tell how old any of these rocks are. Also, structural complications such as faulting sometimes make the interpretation difficult. In a sense, scientists can get "lost" as they drill deeper. If microfossils are found, however, it becomes easier to figure out exactly where they are in their search for sandstones or other reservoir rocks filled with oil.
The Paleontological Research Institution