He said that the SNG group acquired "a large stake" in UzPEC, involving a redistribution of shares among shareholders. "All of the partners are still there, but a Russian participant has appeared," Yagupets said. He said that SNG President Yuri Shafranik has been elected UzPEC chairman of the board. "The cost of the deal and the size of the stake is not being disclosed," Yagupets said. UzPEC signed a production sharing agreement (PSA) with Uzbekneftegaz in 2001 for the Central Ustyurt and Southwest Gissar license zones. This is the first production sharing agreement in Uzbek history. The document covers 40 years of cooperation with gradual investment of over $400 million, including $200 million in the in the first five years. Asked whether SNG will participate in investing, Yagupets said that this would probably be the case. However, he said that this investment will be attracted and that the company will not use its own funds. "We are organizing investment,' he said. "This is the first PSA project in Uzbekistan. Our task is to launch this project, to show the viability of the PSA approach. Shareholders considered that Shafranik's arrival would bring new life. His authority will make it possible to resolve problems that usually arise at various stages of implementing a project," Yagupets said. Shafranik said earlier that the structure of UzPEC capital and management is being renewed. The restructuring of the company should be completed this year. "We hope that the new structure of the company will be effective," Shafranik said. UzPEC invested $13 million in the Uzbek oil and gas complex in 2003, including about $1 million invested in exploration work at Central Ustyurt. The rest of the funds were used to develop and explore oil and gas fields in South West Gissar. Production at South West Gissar fields in 2003 amounted to about 40,000 tonnes of liquid hydrocarbons, which is the same level as in 2002. These hydrocarbons will be exported to Russia, Kazakhstan and China. Yagupets said that "the most effective and economic" gas transport system will be used at the initial stage of the project. PIN//Interfax