(Bloomberg) —
Oman’s sovereign wealth fund took an equity stake in a U.S. firm that says it helps fossil-fuel producers cut flaring by using stranded natural gas to power cryptocurrency mining instead.
Oman Investment Authority was part of the $350 million equity round that Crusoe Energy Systems Inc. raised in April, according to a statement. Ismail Ibrahim Al-Harthi, senior manager of technology investments at Oman Investment Authority, said the firm’s policy doesn’t comment on the size of stakes. Crusoe also declined to reveal terms.
Denver-based Crusoe will open an office in Muscat, Oman, to help deploy power generators and mining equipment for capturing gas at well sites, said Chief Executive Officer Chase Lochmiller. The Middle East and North Africa account for about 38% of the world’s flaring — the burning of excess natural gas from oilfields. The practice has come under fire for releasing harmful greenhouse gases and worsening climate change.
“We’ve always felt it was important for us to have a presence in the MENA region,” given its share of global flaring, Lochmiller said. “Having the buy-in from nations that are actively trying to solve the flaring issues is what we are looking for.”
Crypto mining has come under scrutiny for being energy intensive and reliant on burning natural gas. Crusoe, meanwhile, has faced criticism from climate experts who say the fact the company uses gas that would otherwise go to waste doesn’t negate the fact that it burns fossil fuel to mine crypto.
The company, which keeps all the coin it mines, focuses on setting up shop in remote areas where it’s not economically feasible to build infrastructure to cut flaring.
Crusoe held a workshop in Oman on Monday with the country’s biggest producers, including OQ SAOC and Petroleum Development Oman. The first Middle East pilot will be launched by year-end or early 2023, Lochmiller said. While the drop in Bitcoin prices “certainly has some impact on our top-line revenue, it doesn’t impact any plans for growth and expansion.”
The Oman government, which signed on to the World Bank’s initiative to end routine flaring by 2030, invested in Crusoe early last year, then increased that stake with the April round, Al-Harthi said in a phone interview.
“Oman is committed to reduce greenhouse gases in line with the Paris climate agreement,” Al-Harthi said in an emailed statement.
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