On January 5, 2024, reports from the Central Organization for Control and Auditing revealed significant violations attributed to Petro Masila, a company established in 2011 to operate in Block 14 of the oil sector in the Masila region of Hadramout, eastern Yemen.

According to the official Yemen News Agency (Saba), the reports detailed how Petro Masila exceeded its primary mandate of developing the oil industry by venturing into unrelated projects such as construction and contracting.

The findings indicated a lack of transparency in the company's operations, stating that all of its business programs and annual budgets had not been reviewed, and financial information remains withheld from the Ministry of Oil and the General Authority for Oil Exploration and Production.

The reports highlighted that Petro Masila operated without oversight or supervision from the Ministry of Oil or the auditing authority, failing to submit any annual budget to an accredited auditing body throughout its 13 years of operation.

Petro Masila's activities reportedly extended beyond its designated operations, as established in its founding decree, which only authorized it to manage Block 14. The company was found to have established a significant capital company in Oman and another in the Bahamas under different names, with no evidence confirming these companies' state ownership.

Among the violations noted was Petro Masila's payment of $7 million to acquire a 15% stake in a contractor's share in Block 5, which involved the company absorbing part of the contractor's financial obligations to the government and other parties, amounting to hundreds of millions of dollars.

Since assuming control of the oil sectors in Hadramout, Petro Masila reportedly exported crude oil from operational fields, generating approximately $30 million per shipment, totaling $1.2 billion, which was subsequently transferred to its offshore accounts.

The report raised concerns about the remaining revenue, given that the operational costs were limited to salaries and minor expenses, not exceeding 25% of the oil sales value.

Notably, Petro Masila does not have an office in the temporary capital of Aden, maintaining its headquarters in Sana'a, which is under Houthi control, a group designated as a terrorist organization by international authorities.

The reports criticized Petro Masila as the only national company to hold six production blocks compared to other national companies, despite lacking tangible results in developing its sectors or increasing production.

Additionally, the company was found to have drilled wells without obtaining necessary approvals from the Oil Exploration and Production Authority, leading to significant financial losses estimated in the tens of millions of dollars.

Petro Masila, officially known as the Masila Exploration and Production Company, has operated in the crude oil sector since its establishment on December 18, 2011.