Exxon Mobil, the United States’ largest oil and gas corporation plans to run a pilot Bitcoin mining program, which uses excess natural gas that would otherwise be burned off, to mine Bitcoin at its Qua Iboe Terminal in Nigeria, according to Bloomberg.
Qua Iboe Terminal is one of Nigeria’s largest export facilities and plants in which Exxon Mobil owns 40% interest in the field production mix. The terminal is located on the eastern side of the Qua Iboe river estuary and contains nine crude oil storage tanks with a total capacity of 4.5 million bbls (Billion barrels of petroleum liquids). The production currently averages approximately 320kbd (Thousands of Barrels Per Day).
The firm launched a pilot program in January 2021 where it used excess natural gas that would otherwise be burned off from North Dakota oil wells to power cryptocurrency mining operations. According to sources, the firm plans to expand this operation to other sites around the globe including Nigeria.
What you should know
- The report stated, “Exxon, the largest U.S. oil producer, is considering similar pilots in Alaska, the Qua Iboe Terminal in Nigeria, Argentina’s Vaca Muerta shale field, Guyana and Germany.”
- However, there is already a bid to purchase Exxon Mobil’s stake by Seplat Energy for $1.28 billion. Late February, just after the war between Russia and Ukraine broke out, Seplat announced the agreement to acquire Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation.
- The MPNU portfolio includes the Qua Iboe Terminal in question. Although the state-owned oil giant, NNPC, has opted to exercise its Right of First Refusal (RFR) on the sale of the assets, it brings the question of whether or not Exxon Mobil still plans to sell its stake in Qua Iboe being that it plans to launch a pilot mining program at the site.
- Exxon Mobil is trying to reduce its carbon footprint by turning excess natural gas, which would otherwise be burned off, and would cause harm to the environment, to become useful in generating revenue for the company in form of crypto mining.
- The need to reduce its carbon footprint comes as oil and gas producers are increasingly under pressure from regulators and investors to reduce their carbon footprint to help combat climate change. This was why the International Energy Agency (IEA), released a roadmap for the world to go net zero by 2050.
- It is possible that Exxon Mobil may see a reason to not sell the plant being that it is able to find an alternative use for its excess natural gas, which will ultimately mean a reduction in its carbon footprint.
According to the report, Exxon Mobil has an agreement with Crusoe Energy Systems, a computer software company, to take gas from an oil well pad in the Bakken shale basin to power mobile generators, which will be used to run Bitcoin mining servers on site.
spokeswoman Sarah Nordin said in an email, “We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations.” However, she declined to comment on “rumors and speculations regarding the pilot project.”