Metallic heteroatoms deactivate expensive catalyst and, thus, should be removed at early stages during crude oil processing. Electro- and biological demetallization are examples of two emerging techniques which remove the metallic heteroatoms mainly nickel and vanadium into ions or ionic complexes ultimately residing in the aqueous phase of a two-phase water/oil system. This work investigates the conversion of the aqueous metallic species into metal oxide nanoparticles, which are effective upgrading catalysts, dispersed in the oil phase. The conversion step commenced in situ within a water-in-oil emulsion structure, and the resultant nanoparticles remain very well dispersed in the heavy oil phase. The product nanoparticles were characterized, after successful collection from the oil phase, using X-ray diffraction (XRD), transmission electron microscopy (TEM), and energy dispersive X-ray spectroscopy (EDX). Despite the complexity of the heavy oil system, results confirmed the in situ formation of NiO and V2O5 nanoparticles with mean sizes of 20 and 15 nm, respectively. Some aggregates have, nevertheless, formed, due to the relatively high temperature requirement of the method.