(Recasts with details on Ramirez, context on Venezuelan politics, new prosecutor quote)
CARACAS, Dec 12 (Reuters) - Venezuela said on Tuesday it would start a criminal investigation into powerful former oil czar Rafael Ramirez, in an escalation of a purge of alleged corruption that has resulted in the arrest of dozens of oil executives.
President Nicolas Maduro and Ramirez have long been rivals in the OPEC nation's ruling Socialist Party.
Insiders say tensions between the two politicians have spiked in recent weeks after Ramirez wrote articles criticizing the leftist leader's management of Venezuela's tanking economy and crumbling oil industry, home to the world's largest crude reserves.
Maduro, who is seeking to consolidate power ahead of next year's presidential election, last month stripped Ramirez of his most recent job as Venezuela's representative at the United Nations in New York.
Ramirez, a former oil minister and head of state oil company PDVSA, then left the United States for an undisclosed location last week.
On Tuesday, state prosecutor Tarek Saab accused Ramirez of being involved in the "brokering" of oil sales together with his cousin Diego Salazar, who was arrested this month in Caracas.
"In one of the documents that was found, the citizen Diego Salazar, who is Rafael Ramirez' cousin, directly signals him, incriminates him directly as his direct partner," Saab told journalists. He did not provide evidence.
It was unclear what Ramirez, who did not respond to a request for comment, would do next. He has denied involvement in corruption, and recently told Reuters that the government would make one of its "worst political moves" if investigators target him.
Opposition critics say the recent spate of arrests is arbitrary and motivated by internal divisions in the government. They insist that Maduro has turned a blind eye to corruption when it was politically expedient to do so.
Last year, the opposition-led Congress said $11 billion went missing at PDVSA between 2004 and 2014, when Ramirez was in charge of the company.
Prosecutor Saab has refuted accusations that investigations are politically motivated. He pointed to the arrests of some 67 oil managers, including two former executives who had both served as oil minister and PDVSA president, as proof of the seriousness of the probe.
Last month, Maduro appointed a National Guard major general with no known significant experience of the oil industry to lead PDVSA, sparking fears by industry analysts that mismanagement would increase. (Additional reporting by Andreina Aponte in Caracas and Marianna Parraga in Houston; writing by Brian Ellsworth and Alexandra Ulmer; editing by Susan Thomas and Rosalba O'Brien)