Ni-Co/gamma-alumina catalyst was prepared and tested in upgrading of heavy crude oil. The parameter studied was the type of the pressurising gas and especially its effect on the water-gas shift reaction on the upgrading. The preliminary results suggested that a combination of the cracking reaction and the original water-in-oil which triggered a low temperature water-gas shift reaction generated hydrogen in-situ for the hydrogenation reaction. To further explore this, four major experimental runs were conducted; amongst which two were without catalysts and reactor inner liner in hydrogen and nitrogen environments, two were catalytically driven with and without a liner. The experimental conditions were 380 degrees C, 32 bar and residence time of 2 h with a catalyst/oil ratio of 0.01. The results show that API gravity, Hydrogen/Carbon ratio and light oil yields were slightly higher for the reaction in nitrogen atmosphere without liner as compared to hydrogen with liner- 15.8 degrees, 0.138, and 40.2 g respectively for the latter with 18.2 degrees, 0.177, and 45 g for the former. The catalytic reaction in hydrogen environment however; produced no coke as against the 0.2 wt% coke recorded with nitrogen. Meanwhile, the reduction in sulphur content and viscosity of the nitrogen experiment were higher compared to that of hydrogen.