Crypto Farms Mining at Russian Oil Fields Reach 85 MW of Capacity, Analysts Say – Mining Bitcoin News

Experts believe that Russia has 85 megawatts (MW), of cryptocurrency mining capacity at its oil wells. A report shows that investors are looking at projects to add 200 MW, in spite of Western sanctions.

Crypto mining with Associated Gas from Russia will bring in more than 1 Billion Rubles annually

Data centers mining cryptocurrencies in Russia’s oil fields have a combined power rating of 85 megawatts, which is 23% of the market, according to analysts at Vygon Consulting, an independent consultancy working on the development of the Russian fuel and energy complex.

Crypto farms receive electricity from small power stations that burn associated petroleum gasoline (APG). APG is an by-product of oil company’s black gold extraction. It is cheap and can be sold to miners.

Russian oil companies use approximately 17 billion cubic metres of APG each year to power their drilling facilities. According to Vygon Consulting’s study, cryptocurrency mining is responsible for 279,000,000 cubic meters of current consumption, according to Russian daily Kommersant.

Only July saw the Earnings APG miners totaled 400 million rubles (approx. $36.6 million, based on a $20,000/1 BTC average monthly exchange rate. Their projected annual revenue for July 2022 – July 2023 at that bitcoin price is 4.8 billion rubles (close to $79 million) and the annual income for a six-year period could reach 1.16 billion rubles ($19 million).

APG Coinminting to Expand, Despite Sanctions May Limit Expansion

The analysts believe that APG’s mining industry can experience multiplefold growth. The associated gas flared currently would be used to mine 1.6%. This would bring the total annual income for miners in the sector to 2.5 billion rubles. The sector could grow 25-fold if one third of flared APG was used to mine, and generate revenue up to 30 Billion rubles annually.

At the same time, Russia’s mining businesses are facing challenges due to sanctions imposed over the conflict in Ukraine. The EU has limited transactions with crypto wallets of Russian users and some international crypto exchanges restrict Russians’ access to their platforms. Vygon Consulting believes that there are ways out. One way is to create a mining entity outside of Russia.

That’s not always a workable solution as the case with Bitriver shows. After concerns about Moscow using digital currency to monetize its resources, the U.S. Department of the Treasury approved the sanctioning of the Swiss-registered business in April.

In June, Russian crypto media reported that Bitriver has signed a memorandum of cooperation with Gazprom Neft, the oil production arm of Russia’s energy giant Gazprom, to utilize electricity generated from associated gas at its wells. Vygon Consulting’s experts insist such projects carry no risks for oil companies.

Gazprom Negit began pilot projects in 2019 to create data centers that were powered by APG. It has now established computing infrastructure in its three Russian regions. Although it does not directly engage in digital currency, the company said it supplies excess energy to partners who run installations.

The report states that Russian companies face international restrictions in importing the computing equipment needed for crypto mining. The path “has become longer legally and logistically,” says Roman Zabuga, co-owner of BWC UG, another leading mining operator who puts the current installed capacity of APG farms at 30 – 40 MW. However, Zabuga believes that the investors are planning to realise large-scale new projects in the future with combined capacities of 200 MW.

In this story, tags
APG, associated gas, Bitcoin. Bitriver. Crypto, crypto miners. Cryptocurrencies. Cryptocurrency. Gazprom Neft. Miners. OIL. Oil companies. OIL. oil fields. oil production. oil wells. Russia.

Is crypto mining of associated gas a trend that will continue in Russia? Please comment below with your opinions.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Images CreditsShutterstock. Pixabay. Wiki Commons. Solodov Aleksei

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