The invention is intended to produce high-pressure light fuel gas with good combustibility by contacting and reacting high-temperature, high-pressure water and heavy oil with each other in a contact-reaction unit to extract light oil components from the heavy oil and to remove metals. The high-temperature, high-pressure water and the heavy oil are introduced to the contact-reaction unit for contact and reaction with each other therein. Heavy oil components not dissolved in the high-temperature, high-pressure water are separated by precipitation from hydrocarbon gases and light oil components which are dissolved in the high-temperature, high-pressure water. The separated heavy oil components are burnt or incinerated without any further modification.