SANA'A: After months of waiting on a potential and much awaited contract extension, Nexen's hopes were crushed as Yemen's Supreme Economic Council approved on Saturday the creation of the “Masila Company for Petroleum Exploration and Production” (PetroMasila), which will take over from Nexen at the end of its contract in December. PetroMasila will carry on all oil related activities in Block 14 in Masila, a region of the eastern province of Hadramaut, putting an end to months of lengthy negotiations between the government and the Canadian-based oil company. Despite earlier promises made this year by the Ministry of Oil and Minerals stating that Yemen was favorable to extending the soon ending license, Nexen will have now to leave the country and cut short its investment plans. The company declined to comment on the matter so far. In its statement the Supreme Economic Council (SEC), stressed that under the provisions of article 7 of the contract, PetroMasila would “run and operate the block 14 according to the global petroleum industry standards, and acquires all the rights and privileges the former operator Nexen enjoys as well as all duties and obligations.” The SEC also announced that the newly formed company would extend its Exploration & Development operations to better the resources available and enhance profits. On another matter, the Council studied matters related to the power shortage and the oil derivatives sectors, mentioning that measures needed to be taken in order to stifle the “Black Market” which is endangering Yemen's economic stability, pushing inflation rate higher up. BM