I'm with you in thinking that this is not impossible. I think geology is something that can do funny things in some places.

By the way, in some places oil seems to be pretty close to the surface. If you visit the La Brea tar pits in Los Angeles sometime, there's essentially an open lake of oil (tar) that you can visit, and as you walk the grounds around it you'll see some spots where the tar is seeping out from the ground and you have to watch out not to step on it.