Oman, one of the Middle East's leading natural gas producers, is backing US-based Crusoe Energy Systems to power cryptocurrency mining operations with unused natural gas in a bid to reduce natural gas flaring.
The Oman Investment Authority has participated in the $350 million capital round of Crusoe Energy Systems, a Colorado-based US company dedicated to mitigating gas flaring by capturing wasted energy to power advanced computing systems, such as cryptocurrency mining.
According to the authority, the capital investment in the American company will help the country, one of the largest producers of natural gas in the region, to reduce the burning of natural gas, allocating this fuel to the generation of energy that can be used to sustain crypto mining operations.
Oman, which could reach a production of 2023 million cubic meters (m130) of gas per day by 3, according to estimates by the company Rystad Energy, is analyzing ways to meet its ecological objectives, to end gas flaring and emissions of millions of tons of carbon into the environment by 2030, in line with the objectives proposed in the Paris Agreement and in the SCHEDULE of the Global Gas Flaring Reduction Partnership (GGFR), led by the World Bank and of which Oman is a member.
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For this reason, Crusoe Energy Systems will open a headquarters in Muscat, the capital of Oman, from which it will mine cryptocurrencies such as Bitcoin, using the surplus gas as fuel to sustain the operations of the mining equipment.
The US company is also promoting other technological sectors, such as Machine Learning (ML), to make productive use of the surplus gas generated in extraction and exploitation processes.
Usable energy, from gas, for cryptocurrencies
Cryptocurrency mining is an activity that can contribute efficiently to solving the problem of gas flaring which most companies in the oil industry face.
In the case of the Oman Investment Authority, the agency's senior technology investment manager, Ismail Ibrahim Al-Harthi, told Bloomberg that the move to invest in Crusoe Energy Systems represents a major step toward reducing gas flaring in the country.
According to the authority, investing in this gas flaring solutions provider will bring modern and advanced technologies to the nation, increasing the environmental and economic value of Oman and the region. OQ SAOC and Petroleum Development, which are among the largest oil and gas producers in Oman, have already attended a first meeting with Crusoe Energy, within the framework of the country's new strategic investment.
For his part, Chase Lochmiller, CEO of Crusoe Energy Systems, said that the company will open its new facilities in Muscat, to Implement a first test pilot at the end of this year or at the beginning of 2023Crusoe Energy will deploy a system to collect natural gas from mining wells and several power generators to produce usable energy to power the operations of a previously unknown number of crypto mining rigs.
The American company partnered last March with the oil company Exxon Mobil for the same purpose: Using excess natural gas to fuel cryptocurrency mining.
Cryptocurrencies in Oman
Oman is one of the countries with the least cryptocurrency activity in the Middle East, according to the data indicated in the report Geography of Cryptocurrency 2021 from Chainalysis.
However, there is growing interest among the Sultanate's citizens in cryptoassets such as Bitcoin, despite the existing restrictions in the country.
In 2020, the Central Bank of Oman warned citizens about the risks of investing in cryptocurrencies. A few months later, it announced the creation of a working group to analyze the benefits and risks of this growing market. Meanwhile, in January this year, Oman’s Capital Markets Authority (CMA) invited crypto industry participants and enthusiasts to contribute to the creation of a regulatory framework for these digital assets.
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