Shares in Ivanhoe were up six cents or nearly 10 per cent at 69 cents in morning trading on the Toronto Stock Exchange after the news.
The companies said the strategic alliance was exploring a number of potential business models and applications.
"We expect this combination of technologies to become the pre-eminent method for producing and upgrading heavy oil at offshore locations around the world," SBM chief technology officer Michael Wyllie said in a statement.
Ivanhoe Energy has a partial upgrading technology that reduces the viscosity of stranded heavy oil and produces synthetic crude oil.
SBM Offshore builds the massive floating production storage and offloading ships used by the offshore oil and gas industry.