The aquathermolysis of Liaohe heavy crude oil during steam stimulation was studied by using molybdenum oleate as oil-soluble catalyst for the reaction in this paper. The laboratory experiment shows that viscosity-reduction ratio of heavy oil is over 90% at 240°C, 24hr, with 0.5wt% catalyst solution. The field test that applied aquathermolytic technology in puff-and-huff operation was carried out in Qi-40 and Qi-108 blocks of Liaohe oilfield. As a result, significant viscosity reduction and production increase were obtained. Further filed test indicated that the cycle decline rate of heavy oil production in puff-and-huff operation was improved by aquathermolytic technology. Introduction The researches continue to be aimed at developing alternative methods for heavy oils production because of the anticipated shortfall in supplies of high quality crude oil in China. Heavy oil accounts for a large proportion in the proved oil reservoirs. Heavy oil reservoirs account for 15% of the total oil reservoirs in China[1]. It is difficulty to produce heavy oils by conventional methods because of their high viscosity. Nowadays, steam stimulation is the most effective way to produce heavy oil in the world. Steam can reduce the viscosity of heavy oil and enable the heavy oil to flow through the porous media in reservoir. The oil production can start after injection of steam and soaking periods. Many researched results show that the injected steam can not only reduce the viscosity of heavy oil, but also react with some components in the heavy oil and the reservoir minerals, thereby, leading to the heavy oil properties and compositions changed [2,3].Hyne et al. described all of the reaction between steam, heavy oil and minerals as "aquathermalysis".[4] The catalysts usually applied in aquathermalysis are not oil-soluble. It is mean that the catalysts and the heavy oil cannot fully mix up, so the catalytic effect is relatively low. In this study, a new oil-soluble catalyst -Molybdenum Oleate - was prepared, which is more effective than inorganic catalyst for the aquathermalysis reaction of heavy crude oil. This advantage was confirmed by laboratory and field experiments. Laboratory Experiment Preparation of oil-soluble catalyst. MoO3 was put into distilled water firstly. Then put quantitative oileic acid into the solution and keep the mixture boiling for half an hour. Finally, separating the organic and aqueous phase after the mixture is cooled. The molybdenum oleate exists in the organic phase. The Mo content in the organic metal compounds is 24.9%. Properties of heavy oil samples. The heavy oil samples used in this study were taken from Qi40 block (1#) and Qi108 block (2#) in Liaohe oil field. The properties and composition of the samples are given in table 1. Experiment process. In the aquathermolytic process, 75g heavy oil sample, 0.4g catalyst and 25g water were put into the autoclave (internal volume 125mL), and then the system was heated to 240°C kept for 24h. At the end of heating period, the autoclave was cooled slowly to room temperature. Element analysis. The elements in heavy oil were determined by Carle Erba EA1108 model element analysis instrument, 3–4 mg sample was used for auto sampling. Oil compositions analysis. The compositions of oil samples were determined by high performance liquid chromatographic (HPLC) analysis of deasphaltened oil. The asphaltene were removed by precipitation with addition of 40-volume excess dry hexane to the solution of oil in dichlormethane. The HPLC analysis was carried out on a semi-preparative basis using a Whatman Magnum-9, 10µsilica column and ultraviolet (UV) and refractive index (RI) detectors in series. The silica column was activated previously by overnight flushing (2 ml/min) with dry hexane. The saturate and aromatic fractions were obtained by elution with hexane, and the resins were obtained by back-flushing the column with tetrahydrofuran (distilled from LIAlH4) after the collection of the aromatic fraction. These fractions were quantified gravimetrically after removal of solvent. Viscosity Determinations. Viscosities were determined using a rotary viscometer (Haake RV-550, made in Germen). For the measurement a SV2 senor system was used. Approximately 2g oil sample was placed in the sample cup and allow to equilibrate to 50°C over 20 min. then the measurement was made according to procedures specified by the manufacturer.