Venezuelas chief prosecutor said Tuesday that he had placed former state oil company boss Rafael Ramirez under investigation for corruption.
"We have decided to open a criminal investigation into citizen Rafael Ramirez," prosecutor Tarek William Saab said on state television.
Ramirez led PDVSA for a decade before becoming Venezuela's ambassador to the UN, a post from which he resigned last week -- saying it was at the request of President Nicolas Maduro.
Ramirez had long been seen as a target of Maduro's aggressive push to consolidate power in the run-up to next year's presidential elections in the South American country, wracked by a worsening economic crisis which has seen deadly protests and hyperinflation as well as chronic food and medicine shortages.
Saab said Ramirez's cousin, Diego Salazar -- arrested on December 1 for allegedly diverting and laundering public funds -- "incriminates him as his direct partner" in operations to purchase and sell oil.
Ramirez's whereabouts are unknown since standing down from his post at the UN.
In interviews granted to some media outlets, from an undisclosed location, he claimed to be a victim of political persecution for his criticism of Maduro's mismanagement of the economy and denied being involved in corruption.
The 54-year-old engineer headed PDVSA between 2004 and 2014, a hugely influential position that stemmed from a close relationship with late president Hugo Chavez.
Ramirez loyalists have recently been arrested and removed from key posts -- including former oil minister Eulogio Del Pino and ex-PDVSA chief Nelson Martinez -- in what analysts see as an ongoing purge.
They are the highest-ranking officials to be arrested in the anti-corruption moves at PDVSA, which accounts for almost all the country's income.
Without specifically mentioning Ramirez, Maduro said last week that "anyone who becomes corrupt is a traitor."
Oil minister Manuel Quevedo, a former general installed to replace both Del Pino and Martinez, told reporters at an OPEC meeting last week that Venezuela's oil production was being sabotaged as a prelude to a coup.
Venezuela, teetering on the brink of a full-blown default on its massive debt, has the world's biggest reserves of oil.
But because of endemic corruption and a chronic lack of investment, the OPEC member's oil production is falling sharply.
Annual output is around 1.9 million barrels per day, having slumped more than 23 percent between January 2016 and October this year.