It is highly desired to partially upgrade viscous heavy oil, to be transportable by pipeline. Conventionally, this is achieved by expensive catalytic hydrogenation under a hydrogen pressure of 15–20 MPa. In this thesis, it is reported that by using zinc and silver cation-modified HZSM-5 as the catalyst, methane can be activated at a relatively low temperature of 380 °C and a pressure of 5 MPa to efficiently upgrade heavy oil. The product is a partially upgraded crude oil which is more desirable for pipeline transportation and downstream refining. Before the evaluation of different catalysts, the reaction conditions optimization and better support identification is carried out. The catalyst with the best upgrading performance among all developed candidates comparison was 1 wt% Ag–10 wt% Zn/HZSM-5. This study opens a door for upgrading heavy oil with natural gas.