Poland has lost 400 million buying Venezuelan oil with cryptocurrency. It’s bordering on the grotesque

“A disgrace, in front of the whole world.” This was Polish Prime Minister Donald Tusk’s reaction yesterday, ahead of a cabinet meeting, to the Financial Times investigation which detailed “one of the biggest scandals in the country’s history” – as described by both the newspaper and the Prime Minister. The case, which has been known since 2024, concerns the grotesque attempt by the Polish state-controlled energy giant, Orlen, which, according to the Warsaw Public Prosecutor’s Office, is alleged to have lost hundreds of millions of dollars (1.6 billion zloty, the national currency) in 2023 whilst attempting to purchase Venezuelan oil using cryptocurrencies. Tusk himself summarized the affair yesterday while requesting an urgent briefing from the Warsaw Attorney General, stating: “There are shady dealings involving oil, cryptocurrencies and strange intermediaries: a Palestinian, a Chinese national and a Venezuelan. Then there is the transfer of huge sums of money with no guarantee of receiving petroleum products and, in fact, zero fuel.”

The FT article, by Paul Caruana Galizia, managed to piece together how the company became embroiled in a deal as grotesque as it was serious, which only came to light when Orlen itself recorded the huge loss in its 2024 accounts (this was the year following the change of government from Mateusz Morawiecki’s far-right PiS party to Tusk’s centre-right administration, which replaced the top management at Orlen and Ots).

The story began as follows: in October 2023, a year and a half after the Russian invasion of Ukraine, the White House suspended for six months the sanctions that had kept the Venezuelan state-owned oil company PDVSA out of international banking circuits. This opened up an opportunity to legally purchase Venezuelan crude oil at very favourable prices. Poland, through its energy giant headed by Daniel Obajtek of the PiS party, had set up Orlen Trading Switzerland (OTS) in Switzerland in 2022, a new corporate arm which had been allocated $600 million and given a mandate: to diversify away from Russian crude oil. For OTS, this was an opportunity: the operation was expected to yield the company profits of between 25 and 30 million dollars. From this point onwards, the story takes a surreal turn.

In essence, the CEO of Ots, Samer Awad (the ‘Palestinian’ mentioned by Tusk), approached Alex Tse, a 25-year-old oil trader at the time with experience in Hong Kong, who had founded a brokerage firm – called Hannon – based in Dubai a couple of years earlier. The two, who had already done business together, met on a yacht in Abu Dhabi during the Formula 1 Grand Prix on 26 November 2023. A few days later, on 29 November, OTS signed a contract with Hannon to purchase 6 million barrels of Merey 16-grade crude from Venezuela for a total price of $345 million, with two-thirds of the payment made as an immediate advance (230 million, which was transferred just five days after the contract was signed).

Paradoxically, that contract made no mention of cryptocurrencies (nor of PDVSA). And during those months, PDVSA continued to demand advance payments in Tether (USDT), a blockchain-based stablecoin – one that is untraceable. As a result, Hannon had to source both the crude oil and the cryptocurrencies, incurring tens of millions in commission fees. Orlen sent three oil tankers to Venezuela as early as December, which began to wait until the bill for freight and shipping costs had risen to $72 million. In January, Hannon’s founder flew to Caracas and, according to what he told the FT, one of his associates handed over to a man – who claimed to be able to procure the oil – two USB sticks providing access to 60 and 50 million dollars’ worth of USDT respectively, and then another two, each containing 11 million, to a second intermediary with the same task. Both men subsequently disappeared, and Orlen terminated its contract with Hannon in March 2024.

On 7 August, the Warsaw Public Prosecutor’s Office sought a trial for three former managers of Orlen and Ots over damages amounting to $378 million. Obajtek, now a PiS MEP, accuses his successors at Orlen of having halted the operation too soon, but the company has stated that Hannon had by then missed all the deadlines. However, the dispute with the Dubai-based company is currently before an arbitration tribunal, and Orlen is still seeking to recover at least the 230 million it had advanced.