Analysts Says Crypto Farms Mining at Russian Oil Fields Reach 85 MW of Capacity – According to analysts at Vygon Consulting, an independent consultancy working on the development of the Russian fuel and energy complex, data centers mining cryptocurrencies in Russia’s oil fields have a combined power rating of 85 megawatts, which is 23% of the market.
Small power plants that burn associated petroleum gas (APG), a waste product of the production of black gold that oil firms are required to dispose of, supply electricity to these crypto farms. They can sell it to miners for practically nothing.
Around 17 billion cubic meters of APG are used annually by Russian oil producers to power infrastructure at drilling sites. According to researchers, cryptocurrency mining currently consumes 279 million cubic meters of space, according to a report from the Russian business daily Kommersant, which cited the study done by Vygon Consulting.
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APG miners made 400 million rubles ($6.6 million) in profits in July alone, based on an average monthly exchange rate of $20,000 for each btc. At that price of bitcoin, their estimated yearly revenue for July 2022 to July 2023 is 4.8 billion rubles (about $79 million), and their estimated annual income for a six-year period may be 1.16 billion rubles ($19 million).
The analysts predict that the APG mining sector might expand by multiple times. The related gas that is currently flared at a rate of 1.6% might be used for mining, doubling the annual income of the engaged miners to 2.5 billion rubles. Additionally, the mining industry may grow by a factor of 25 if a third of all flaring APG is devoted to this industry.
At the same time, sanctions imposed because of the crisis in Ukraine are making it difficult for Russia’s mining companies to operate. Russian users’ access to some foreign crypto exchanges is restricted, and the EU has placed restrictions on their ability to transact with their crypto wallets. According to Vygon Consulting, registering a mining entity in another country is a potential solution.
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Another issue Russian businesses experiencing international restrictions face is importing the computing equipment needed for cryptocurrency mining, the report states. According to Roman Zabuga, co-owner of BWC UG, another major mining operator, the present installed capacity of APG farms is between 30 and 40 MW, and the route “has grown longer legally and logistically.” Nevertheless, he thinks that in the future, investors intend to implement sizable new projects with a combined capacity of 200 MW.
