A method of forming a product from an oil feedstock, such as a biodiesel product, and a heterogeneous catalyst system used to form said product is disclosed. This catalyst system, which has a high tolerance for the presence of water and free fatty acids (FFA) in the oil feedstock, may simultaneously catalyze both the esterification of FAA and the transesterification of triglycerides present in the oil feedstock. The catalyst system is comprised of a mixture of zinc oxide and a second metal oxide. The zinc oxide includes a mixture of amorphous zinc oxide and zinc oxide nanocrystals, the zinc nanocrystals having a mean grain size between about 20 and 80 nanometers with at least one of the nanocrystals including a mesopore having a diameter of about 5 to 15 nanometers. Preferably, the second metal oxide is a lanthanum oxide, the lanthanum oxide being selected as one from the group of La2CO5, LaOOH, and combinations or mixtures thereof.