The Daily Journal.- Polish state-owned oil company Orlen lost at least US$424 million in a failed deal to acquire six million barrels of Venezuelan crude, in a transaction that involved a US$230 million advance payment, cryptocurrency and a network of intermediaries in Dubai and Venezuela, according to an investigation published by the Financial Times.
Orlen’s Swiss subsidiary, Orlen Trading Switzerland (OTS), signed the deal in November 2023 to purchase about six million barrels of Merey 16 crude through Hannon International, a Dubai-based company.
The contract was worth US$345 million, and OTS expected to earn a profit of between US$25 million and US$30 million, according to a source cited by the British newspaper.
Five days after signing the agreement, OTS transferred a US$230 million advance payment to Hannon, equivalent to two-thirds of the contract’s value.
The Financial Times investigation, which drew on internal Orlen documents, court filings, vessel-tracking records, blockchain transaction analysis and interviews, found that the contract did not provide for cryptocurrency payments or identify the intermediaries who later participated in the transaction.
The deal took place during the temporary easing of some U.S. sanctions on Venezuela’s oil sector, which opened a six-month window for new transactions involving Venezuelan crude.
A deal with high financial exposure
Orlen had created OTS just a year earlier to expand its international trading activities and help diversify Poland’s energy supplies following Russia’s invasion of Ukraine.
The subsidiary had access to a fund of approximately US$600 million for trading operations, meaning the US$230 million advance represented a significant portion of its resources.
Hannon International, Orlen’s counterparty, had started operations about two and a half years earlier under trader Kam Ho “Alex” Tse and had three main employees when it received the funds, according to the Financial Times.
After receiving the money, Hannon turned to several intermediaries to convert the funds into USDT, a dollar-pegged stablecoin, and make payments related to the purchase of Venezuelan oil.
The company initially obtained US$80 million in USDT through a Dubai company in exchange for a US$400,000 commission.
Hannon later says it transferred US$135 million to Horizon Global but received only US$85 million in USDT. The US$50 million difference remains the subject of litigation in Dubai, and Horizon denies the allegations.
In December 2023, Hannon also transferred another US$30 million to Gold Mar International Trading to convert the funds into USDT and direct them to PDVSA. According to the investigation, the money never reached the Venezuelan oil company.
Shipments failed to materialize
While the financial transactions unfolded, three vessels chartered by Orlen arrived in Venezuelan waters to transport the crude.
The vessels had to load the six million barrels by December 19, 2023, but they remained in Venezuelan waters for months without receiving the contracted volumes, adding delay costs.
With little progress on the deal, Hannon representatives traveled to Venezuela in January 2024 to secure the oil.
According to the Financial Times, intermediaries in Venezuela received US$110 million in USDT during that period. The planned shipments, however, never materialized.
A purported PDVSA export schedule later listed Orlen’s three vessels with 1.9 million barrels each, but it marked the loading dates as “TBN” — to be nominated — and the shipments never took place.
Hannon says it delivered about US$132 million to two Venezuelan intermediaries and spent another US$54 million on cryptocurrency-related commissions and other attempts to secure the oil.
The company also said its Venezuelan contacts advised it not to keep records of cryptocurrency transactions.
Losses exceeded the contract’s value
OTS later tried to recover part of the transaction by purchasing other Venezuelan petroleum products. Still, it rejected a cargo of one million barrels of lighter crude after detecting high contamination levels.
Ultimately, one chartered vessel received a limited quantity of fuel oil, while the other two left Venezuela without their intended cargoes.
OTS terminated its contract with Hannon on March 28, 2024.
The Polish government later calculated that the transaction caused losses of at least 1.6 billion zlotys, or about US$424 million, including freight, logistics and other related costs.
Orlen continues to pursue arbitration to recover the US$230 million it initially transferred to Hannon. Tse’s company says it no longer holds the funds that the Polish oil company seeks to recover.
Judicial investigation
The Warsaw Prosecutor’s Office is also investigating the transaction and has opened proceedings against former OTS executives over alleged fraudulent management involving the approximately US$600 million trading fund.
Authorities in the United Arab Emirates detained Samer Awad, who headed OTS when the company agreed to the transaction, in January 2025 following an Interpol Red Notice. Emirati courts later rejected Poland’s extradition request, and authorities released Awad.
The former executives under investigation deny the allegations.
Polish Prime Minister Donald Tusk included the case among the actions his government has undertaken to review the management of state-owned companies and said that “Poles must know the truth.”
