Russia’s third-largest oil producer has joined Bitriver, a Bitcoin mining business based in Switzerland, to extract bitcoin using additional resources.
BitRiver will build digital infrastructure in Gazpromneft’s Russian oil field as part of a new partnership. Associated petroleum gas, a type of natural gas found in oil deposits, will be used to generate the energy needed to make crypto.
Gazpromneft will power Beatriver’s data centers under an agreement reached at the St. Petersburg International Economic Forum on Friday.
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According to a statement, these energy sources will be either in new oil wells where transport infrastructure has not yet been established, or will be located in remote areas with high transport requirements.
Significantly, Beatriver is not a new player in Russia’s energy industry. Founded in 2017, Bitcoin Miner has a 100-megawatt data center powered by renewable energy in Brattsk, Siberia.
BitRiver, the first crypto mining company to be approved by the United States
In April of this year, the US Treasury Department added Beatriver to its Office of Foreign Asset Control (OFAC) list, alleging that the crypto mining company was aiding “the brutal war of Putin’s choice.”
BitRiver became the first cryptocurrency mining company to be approved after Russia’s invasion of Ukraine in February this year.
OFAC further emphasizes that the crypto mining firm assists Russia in “monetizing its natural resources”. The agency described the move as “anti-competitive and unfair” and said it intended to file charges against the US government.
Gazpromneft’s business strategy does not include digital currency, but oil giants are looking for alternatives that would enable “beneficial use” of related gases produced during oil extraction.
Crypto total market cap at $789 billion on the weekend chart | Source: TradingView.com
Eger Runets, founder and CEO of Beatriver, in a Memorandum of Understanding (MOA):
“Over the next two years, BitRiver plans to implement its own data center initiative for power-intensive computing with power scaling up to 2 gigawatts of petroleum gas, which will also provide high and consistent power consumption.”
Although the relationship between Gazpromneft and BitRiver is fancy, they were not the first to embrace the idea.
In March of this year, it was announced that Exxon Mobil, the largest U.S. oil company, was exploring bitcoin mining activities. Exxon apparently wanted to reduce its burning gas surplus.
Meanwhile, it remains to be seen whether Beatriver’s fueled natural gas processes will be profitable. JPMorgan analyst Nikolaos Panigirtzoglou estimates that the cost of one bitcoin (BTC) mining has risen to $ 15,761, reducing the profitability of BTC miners as the price of cryptocurrency falls below $ 19,000 at press time.
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Featured image from Bloomberg.com, chart from TradingView.com