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Oil is an important resource if you want to create some end-game machines, as it is used to make Plastic Sheets, or it can be turned into Fuel, which can be burned into a Combustion Generator to create a moderate amount of power
To get Oil, you need an Oil Pump. The Oil Pump itself cannot do anything, if the chunk it is placed in hasn't been scanned using a GEO Scanner. Each chunk has a certain amount of oil capacity, counted in millibuckets (1000 millibuckets = 1 Normal Bucket). Every time an Oil Pump pumps oil, 1000 millibuckets of that chunk's oil capacity will get depleted, till it goes to 0. Each chunk's oil capacity is determined based on it's biome, with a Deep Ocean having the most oil and a beach having the least.