PURPOSE: To upgrade the quality of heavy oil fractions containing polynuclear aromatics by oxidizing carbonaceous raw materials in a multi-phase system including an aqueous phase under low severity conditions and further by applying deoxidizing and hydrogenating treatment to generate mononuclear aromatic compounds.

CONSTITUTION: Mononuclear aromatic products are generated by the following steps. (a) Feedstocks are selectively oxidized in a multiphase system containing at lease one aqueous phase under low severity oxidizing conditions using a water-soluble oxidizing catalyst selected so as to catalyze the selective oxidization of non-terminal aromatic rings of polynuclear aromatic compounds in the carbonaceous feedstocks, (b) the oxidized products are deoxygenized and (c) the deoxygenized products are treated by hydrogen to generate mono-nuclear aromatic compounds. Catalysts consisting of preferably a transition metal or plural transition metals, more preferably complex compounds containing a metal or plural metals of Group VIII are listed as examples of the catalyst to be used.