By Marcela Ayres

BRASILIA (Reuters). A Brazilian Economy Ministry official Caio Maria Paes de Andrade emerged strong to run for Petrobras as the head of state-run Petrobras. The nomination was rejected by energy consultant Adriano Pies.

According to a source who asked anonymity for comment about private conversations, Economy Minister Paulo Guedes had not participated in the selection process. However, he supported the nomination of Paes De Andrade due to his support of a smaller, more efficient public sector. Guedes is a long-standing advocate for privatization of Petrobras.

Paes De Andrade and Economy Ministry have declined to comment. According to the Mines and Energy Ministry, it is currently evaluating candidates for Petrobras leadership.

Newspaper O Globo was first to publish on Tuesday the news that Paes da Andrade would be running for Petrobras CEO.

According to another government source, Paes deAndrade holds a master’s from Duke University. He currently advises Guedes about digital governance.

Pires withdrew from the nomination Monday. He stated that he couldn’t reconcile his consulting work and running Petroleo Brasileiro SA.

On Tuesday, newspapers Valor Economico as well O Estado de S.Paulo reported that Paes de Andrade had been in the race.

O Globo reported that several ministers now support Paes De Andrade, although it did not provide specific sources. He has also been interviewed by Bento Albuquerque, the Mines and Energy Minister.

Guedes answered Monday’s question about the possibility of Pires being reappointed as the head of the company, saying that he didn’t have any light to shed on the subject.

Petrobras claimed in a security filing Monday night that it has not received from the Mines and Energy Ministry any information on replacements for Pires.

Petrobras shares dropped 0.4% in Sao Paulo’s midday trade, while the benchmark stock market index lost 1.0%.