In late November 2023, a deal initiated by Poland’s largest state-backed energy group, Orlen, aimed to secure Venezuelan crude oil through an unconventional transaction involving cryptocurrency, ultimately resulting in a complex dispute and significant financial losses. The effort centered on a contract between Orlen Trading Switzerland (OTS) and Dubai-based Hannon International, a young oil trading firm led by Kam Ho “Alex” Tse.
The arrangement began when Samer Awad, appointed in August 2022 as chief executive of OTS, instructed Tse to acquire Venezuelan oil amid the partial easing of U.S. sanctions on Venezuela. These sanctions, initially imposed in 2019, had severely limited Venezuela’s ability to sell oil via traditional banking channels, prompting the Venezuelan state oil company, PDVSA, to demand payments in cryptocurrency, specifically USDT (Tether), a dollar-pegged digital asset.
Orlen sought to diversify its crude sources following Russia’s invasion of Ukraine and allocated approximately $600 million for trading. In early December 2023, OTS signed a contract valued at $345 million with Hannon to purchase around six million barrels of PDVSA’s heavy blend, Merey 16. The deal required a two-thirds advance payment, leading OTS to transfer $230 million to Hannon within days.
Hannon, founded just over two years earlier by Tse, then faced the challenge of converting these funds into the USDT required by PDVSA while securing the oil cargo. This process involved a network of intermediaries, including Vitoncola Mariano, an Italian businessman affiliated with Lexcor Energy, a company with disputed authenticity and minimal verifiable activity. Attempts to convert funds through several Dubai-based entities—Horizon Global and Gold Mar International Trading—resulted in significant shortfalls and misdirected USDT payments, which have not reached PDVSA.
Concurrently, three supertankers chartered by Orlen arrived at Venezuela’s José terminal by mid-December, awaiting loading that was repeatedly delayed. Hannon attributed the delays to PDVSA repricing and prioritization of larger buyers ahead of the sanctions window closing. The tankers remained idle, accruing demurrage fees, and Orlen grew increasingly frustrated with Hannon’s inability to fulfill delivery obligations by the December 19 deadline.
In January 2024, Tse and a colleague traveled to Caracas, carrying USB drives containing large amounts of USDT and hiring armed protection amid safety concerns. Venezuela’s oil sector was undergoing a major corruption probe focused on brokers involved in crypto-based deals. Tse’s team engaged new intermediaries, including José Castillo of Synergy and Juan Rodriguez of Consulting Services, transferring further USDT amounts in attempts to secure oil. However, no confirmed deliveries materialized, with the latest loading schedules showing tentative nominations but no final dates.
Hannon and Orlen engaged in subsequent smaller transactions involving different Venezuelan fuel oil grades, some of which were rejected due to quality issues, while others yielded partial cargoes. Meanwhile, copies of disputed contracts, vague involvement of intermediaries, and divergent accounts of Hannon’s role compounded the controversy. Hannon claims it acted as a “sleeve” buyer, facilitating transactions in USDT on behalf of OTS, which allegedly was prohibited from dealing in cryptocurrency directly. Orlen and its trading arm maintain that Hannon was responsible for delivering oil outright and that subcontracting did not absolve it of contractual obligations.
The situation escalated amid political changes in Poland. Following the 2023 election, the new government led by Prime Minister Donald Tusk initiated reforms targeting mismanagement in state companies. Tusk integrated the Orlen scandal into a broader investigation, pressing for accountability. Prosecutors in Warsaw have charged Awad and other former executives with criminal mismanagement, though they deny wrongdoing. Awad was detained in the United Arab Emirates in January 2025 on an Interpol notice but was released after extradition was denied.
Orlen’s new management, led by Ireneusz Fąfara, uncovered weaknesses in governance and political interference within the company. With mounting demurrage costs exceeding expected profits and diminishing prospects of recovery, OTS terminated the contract with Hannon in late March 2024. Despite continued arbitration efforts, over $230 million remains unrecovered, with Hannon stating it lacks sufficient funds but remains open to constructive dialogue.
The case highlights the complexities and risks of trading in sanctioned markets using cryptocurrencies and multiple intermediaries. It underscores challenges faced by European state-backed enterprises venturing into opaque commodity trades requiring unconventional payment methods, raising questions about oversight and due diligence in such transactions.