French oil firm Total says its head of exploration and production, Christophe de Margerie, is being investigated over claims that he paid bribes to win bids.
The probe relates to the United Nations oil-for-food programme
A French judge has also placed former Total executive Bernard de Combret under investigation.
Total said the allegations centred on deals relating to the United Nations oil-for-food programme in Iraq.
The lawyer for Mr de Margerie, who is due to become Total's chief executive, said the inquiry was "groundless".
A number of global figures have been caught up in the oil-for-food scandal, and UN Secretary General Kofi Annan said in September that he took personal responsibility for the failures of the programme.
In September, a report by an independent panel told the UN that it had found instances of "illicit, unethical and corrupt" behaviour within the $64bn scheme.
It concluded that the UN was in urgent need of sweeping reform.
A French judge is now investigating claims that Mr de Margerie paid illegal kickbacks to win favours for his company between 1996 and 2002.
The investigation into Mr de Combret focuses on the years between 2000 and 2002.
Countering the latest claims, Total said that it wanted to "reassure Mr de Margerie of its total support".
Total added that "at no time did the group circumvent the UN embargo against Iraq" and that it "strictly adhered to the rules of the oil-for-food programme".
"The group has never purchased, either directly or indirectly, oil that has been smuggled illegally from Iraq," it added.