Abstract: The invention relates to a method of treating a liquid hydrocarbon (e.g. heavy oil, bitumen, etc.) containing naphthenic acids or other corrosive acids in order to partially or fully convert such acids into non-corrosive compounds. The method comprises adding an alkylating agent to the hydrocarbon, bringing the hydrocarbon into contact with an aqueous liquid containing an alkaline compound and a phase transfer catalyst to form an immiscible two-phase system, maintaining the contact to allow conversion of the naphthenic acids to non-corrosive oil-soluble esters, and separating the aqueous phase from the liquid hydrocarbon. Naphthenic acids are highly corrosive to plant and equipment and the method enables them to be converted to non-corrosive compounds in an economic manner.