Crypto Farms Mining Reaches 85 MW Capacity in Russian Oil Fields, Analysts Say – MiningBitcoin News

Experts estimate that the agricultural cryptocurrency produced on oil wells in Russia has a potential of 85 megawatts (MW). Despite restrictions due to Western sanctions, investors are considering projects for another 200MW, according to a report.

Annual income from cryptomining with associated gas in Russia exceeds one billion rubles

According to analysts of Vigon Consulting, an independent consultant working on the development of the Russian oil and energy complex, data centers in the Russian oil fields have a combined power of 85 megawatts, which is 23% of the market.

These crypto farms provide electricity generated by small power plants that burn the associated petroleum gas (APG) obtained by extracting the black gold that oil companies are required to dispose of. They can sell it to miners even if it costs them nothing.

Russian oil producers use 17 billion cubic meters of APG annually to generate electricity at their drilling sites. Researchers say cryptocurrency mining currently holds 279 million cubic meters of consumption, Russian business daily Kommersant reported, citing research by Vigon Consulting.

Only in July Revenues APG miners earn 400 million rubles (approx. $6.6 million), an average of $20,000 per 1 BTC per month. In the year In July 2022 – July 2023, the projected annual revenue at that bitcoin price could reach 4.8 billion rubles (about $79 million), and the annual revenue for six years could reach 1.16 billion rubles ($19 million).

Although restrictions may hinder expansion, APG coin issuance is expected

According to analysts, the APG mining industry is likely to witness multifaceted growth. Currently, if 1.6% of the associated gas is used for mining, the annual income of miners will double to 2.5 billion rubles. And if one-third of the total burned APG is used for mining, the sector can increase by 25 times and earn up to 30 billion rubles per year.

Similarly, Russian mining businesses are facing challenges due to sanctions imposed as a result of the conflict in Ukraine. The European Union has restricted transactions with Russian users’ crypto wallets and some international crypto exchanges restrict access to Russian platforms. According to Vigon Consulting, the only way out is to register as a mining entity in another country.

As the situation with Bitriver shows, that is not always a workable solution. The Swiss-registered company, a major operator of mining data centers in the Russian Federation, was banned by the US Treasury Department in April over concerns that Moscow could use the development of digital coins to monetize its energy assets.

In June, Russian crypto media Bitstream reported that it had signed a cooperation agreement with Gazprom Neft, the oil production arm of Russian powerhouse Gazprom, to use electricity generated from associated gas at its wells. Vigon Consulting experts insist that such projects do not pose any risk to oil companies.

Gazprom Neft began pilot projects to establish APG-powered data centers in 2019, and now has operational computer infrastructure at its companies in three Russian regions. The company emphasized that it does not deal directly with digital currencies, but rather gives excessive power to installations operated by partners.

Importing computer equipment needed for crypto mining is another problem for Russian companies facing international sanctions, the report said. The road has become “legally and logistically longer,” 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, he believes that investors are planning to realize large new projects with a combined capacity of 200MW in the future.

Tags in this story

APG, associated gas, Bitcoin, Bitriver, Crypto, crypto miners, crypto mining, Cryptocurrencies, Cryptocurrency, Gazprom Neft, miners, Oil, oil companies, oil fields, oil production, oil wells, Russia, Russian

Do you think crypto mining on associated gas will continue to grow in Russia? Share your thoughts on the topic in the comment section below.

Lubomir Tasev

Lubomir Tasev is a tech-savvy Eastern European journalist who likes Hitchens’ quote, “Being a writer is not what I do, but what I am.” Apart from crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image credits: Shutterstock, Pixabay, WikiCommons, Solodov Aleksei

DisclaimerThis article is for informational purposes only. It is not an offer or solicitation to buy or sell, or a recommendation or endorsement of any products, services or companies. does not provide investment, tax, legal or accounting advice. Neither the Company nor the Author shall be liable, directly or indirectly, for any damages or losses arising out of the use of or reliance on any content, goods or services referred to in this paragraph.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *