Oil shale occurs fairly uncommonly in mesas, oceans, swamplands, and snowy biomes in veins between gravel, dirt and stone blocks. It is found at almost any altitude (layers 10-80). It occurs in fairly large deposits, almost as large as deposits of coal ore. Deposits of oil shale may also contain some coal ore.
Oil shale also more rarely occurs in much larger deposits underground (layers 20-60) in all biomes, surrounding a small amount of crude oil.
Oil shale must be mined with a stone pickaxe or better. It drops one piece of bitumen when mined. More bitumen is dropped if a Fortune enchanted pickaxe is used. Oil shale itself can be obtained by mining it with a Silk Touch enchanted pickaxe.
When oil shale is broken, some crude oil comes flowing out. This oil cannot be picked up and eventually disappears.