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Why Oil Will Keep Rising In 2021

Why Oil Will Keep Rising In 2021

While new lockdowns around the…

Gazprom’s Oil Unit Plunges Into Crypto Mining

Gazprom Neft, the oil unit of Russian gas giant Gazprom, has launched a cryptocurrency mining operation at one of its oil sites in Siberia, CoinDesk reported on Wednesday.

Gazprom Neft, the third-largest oil producer in Russia, is using associated gas from an oilfield in the Khanty-Mansiysk region of northwestern Siberia to generate electricity it sells to the crypto mining operations, CoinDesk reports.

Cryptocurrency mining requires a lot of electricity, and Siberia is thought to be an ideal place for crypto mining, the BBC said in a news story in 2018.

Gazprom Neft doesn’t plan to mine for cryptocurrencies itself, a spokesperson for the company told CoinDesk. However, the Russian oil producer is open to sharing its energy resources with crypto miners.

Gazprom Neft believes that crypto miners could be one of the customers of the electricity produced from associated gas.

Power from associated gas can power data centers and mining farms, Alexander Kalmykov, Head of the Blockchain Technology Center at Gazprom Neft, told Russian outlet Forklog.

This will increase the use of the raw materials, especially in faraway regions in Siberia and the Arctic, where transporting associated gas out of the oilfields is not profitable, Kalmykov told Forklog. 

Gazprom Neft has piloted this year a small crypto mining operation with Russian computer hardware manufacturer Vekus at one of its oilfields in Siberia. Gazprom Neft used the associated gas to produce electricity and sell it, at prices below the price from the grid, to Vekus.

The alliance in Siberia is not unique in the oil industry.

In North Dakota, Crusoe Energy Systems, recognized as an innovator by the North Dakota Petroleum Foundation, has developed technology and equipment to capture natural gas at the wellhead and convert it into electricity for energy-intensive computing, including Bitcoin mining.

Meanwhile, the price of Bitcoin hit an all-time high at $28,400 early on Wednesday, with analysts saying the $30,000-mark could be hit before the New Year.

By Tsvetana Paraskova for Oilprice.com

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