Russian Oil Companies Want to Mine Crypto on Flare Gas
Russia’s Ministry of Digitalization and the Bank of Russia
have been asked for official comments on the idea that oil companies might open
mining farms on their oil rigs, using flare gas to generate power.
Vasily Shpak, the deputy head of Russia’s Ministry of
Industry and Trade, asked the agencies to clarify their positions on the
matter, Russian newspaper Kommersant wrote on Wednesday.
The Ministry of Industrial Development told Kommersant that
the idea came from the oil and gas companies themselves. They suggested getting
regulatory approval to mine crypto using flare gas for electricity generation.
Shpak’s letter also suggests that Russia starts manufacturing devices for
turning flare gas into energy, Kommersant wrote.
Flare gas is a byproduct of oil extraction and is usually
burnt, which is a liability for oil-extracting companies and releases carbon
dioxide into the atmosphere.
The idea to seek approval came from one of the country’s
major oil and gas companies, which already has a small mining farm using flare
gas, but wants to expand it, an unidentified source “close to the Ministry of
Industry and Trade” told Kommersant. Russian law, however, currently doesn’t
regulate mining business.
The only Russian oil company to publicly launch a mining
farm is Gazpromneft. In December 2020, the company said it was starting a pilot
mining venue on one of its oil fields in Siberia, CoinDesk wrote.
At the time, a Gazpromneft representative told CoinDesk that
the company wasn’t planning to mine crypto for its own reserves, but would
provide a venue for other miners. Mining firm Vekus became its first client and
mined 1.8 BTC using 49,500 cubic meters of gas during one month last fall,
according to Russian crypto news outlet Forklog.
Last summer, Russia passed a law classifying
cryptocurrencies as a taxable property. It did not, however, explain any
practical matters related to crypto, as to how crypto businesses should operate
in Russia or how people are supposed to declare and pay crypto-related taxes.
These issues still have to be clarified by the future laws.
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