Exxon Mobil, the world’s largest oil and gas company, proposes to conduct a prototype Bitcoin mining operation at its Qua Iboe Terminal in Nigeria, which will use excess natural gas that would otherwise be burned to mine Bitcoin.
Exxon Mobil owns a 40% stake in the field production mix at the Qua Iboe Terminal, one of Nigeria’s main export facilities and plants. The terminal, which is located on the eastern side of the Qua Iboe river estuary, has nine crude oil storage tanks with a combined capacity of 4.5 million barrels of oil (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.
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, Seplat Energy has already made a $1.28 billion offer to buy Exxon Mobil’s stake. Seplat announced the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from Exxon Mobil Corporation in late February, shortly after the conflict between Russia and Ukraine erupted.
The Qua Iboe Terminal is part of the MPNU’s portfolio. Although NNPC, the state-owned oil company, has chosen to exercise its Right of First Refusal (RFR) on the asset sale, it raises the question of whether Exxon Mobil will follow suit.
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.”