The ability to recover methane directly from deeply buried oil reserves means energy-intensive and thermal polluting processes are removed.
But methods like injecting steam into the reservoirs to heat and loosen the heavy viscous oil, so it can be pumped to the surface, are no longer needed say the authors of the Nature report.
"The main thing is you'd be recovering a much cleaner fuel," says co-author Steve Larter, a petroleum geologist from the University of Calgary.
"Methane is, per energy unit, a much lower carbon dioxide emitter than bitumen. Also, you wouldn't need all the upgrading facilities and piping on the surface."
Co-author Martin Jones, from the University of Newcastle, told the BBC News website that recovering methane from microbe biodegradation could also be used in exhausted oil fields: "Typically more then half of the oil that is in the reservoir is left there after the field is exhausted. In cases where they can't get the oil out economically, then they could convert it to gas."
Eating oil
The scientists found that the main process of crude oil biodegradation occurs by anaerobic bacteria - those which live and grow in the absence of oxygen - and that this produces methane. These microbes exist in oil reservoirs to a depth of 2km and a temperature of 80C.
This process occurs via an intermediate separate family of bacteria that produce carbon dioxide and hydrogen from partly degraded oil, prior to it being turned into methane.
The researchers also suggest that CO2 could be recycled as fuel in a closed-loop energy system once captured as methane, helping to prevent further CO2 release into the atmosphere.
Increased activity
To accelerate the breaking down of oil into methane the scientists suggest feeding the microbes with fertilisers. These would include phosphorus, which is a limiting nutrient, as well as some vitamins.
"The micro-organisms eat the oil, so there is plenty of food there, it is just the other smaller nutrients that would be needed to get them to grow quicker," Martin Jones told the BBC News website.
He added: "One of the things the studies showed is that when you degrade oil under methanogenic conditions in the laboratory, the patterns of hydrocarbon degradation are exactly the same as what you see in reservoir degraded oils world-wide. So the trick would be to speed up that process from geological time to a human time-scale."