The third-largest oil producer in Russia, Gazpromneft, has partnered with Switzerland-based Bitcoin ($BTC) mining firm BitRiver to use excess resources to mine the flagship cryptocurrency.
According to a memorandum from the St. Petersburg International Economic Forum, Gazpromneft will provide BitRiver energy to data centers the latter sets up, which will either be at new oil fields where transportation infrastructure hasn’t been set up, or remote sites to which transportation costs are too high.
Igor Runets, founder and CEO of BitRiver, was quoted saying:
Over the next two years, BitRiver intends to implement projects to create its own data centers for power-intensive computing with power scaling up to 2 [gigawatts], including [petroleum gas], which will additionally provide high and stable power consumption,
BitRiver has notably been sanctioned by the U.S. Treasury Department’s Office of Foreign Asset Control because the firm helps Russia “monetize its natural resources.” BitRiver has called the sanctions unfair and anti-competitive before announcing plans to sue the U.S. government.
The partnership comes as part of a wider trend in which oil companies as taking advantage of cryptocurrency mining to avoid wasting methane gas in a practice known as flaring. ExxonMobil (XOM) is reportedly looking into applying a similar strategy for some of its oil friends, while Middle Eastern oil producers Abu Dhabi and Oman have taken stakes in Crusoe Energy for the same purpose.
ConocoPhillips, an oil and gas giant with $18 billion in revenue during the fiscal year ending December 31, 2020, has entered the Bitcoin mining fuel business by supplying a cryptocurrency miner with gas in the Bakken, a region in North Dakota.
Although the company isn’t running a BTC mining operation itself, it’s selling gas that would otherwise be burned to bitcoin miners, owned and managed by a third party.
The move is part of ConocoPhillips’ initiative to reduce the burning off of extra gas, a practice known as flaring, to zero by 2030. The company has reportedly published reports about its efforts to phase out flaring in its largest segments based on production.