(Adds share reaction, dividend debate in paragraphs 4-7)

BRASILIA, April 10 (Reuters) - Petrobras Chief Executive Jean Paul Prates will remain in his role for now as pressure to remove him from Brazil's state-run oil company has eased, two sources familiar with the situation told Reuters on Wednesday.

Word that Prates will stay on for now comes after days of intense speculation that he could be replaced by Aloizio Mercadante, the head of state development bank BNDES. People close to the matter had said Prates' tenure was unlikely to last the week.

Prates has been under fire from parts of Brazil's governing coalition that want to see him bring down fuel prices and ramp up job-creating investments.

With Prates staying on and the government in need of extra funds, it is now more likely that Petrobras' board will approve the distribution of 50% of the extra dividends withheld about a month ago, said one of the sources.

Petrobras is set to have a shareholders meeting on April 25, where the release of dividends could be put to a vote.

Petrobras shares rose 2% in Sao Paulo to their highest closing price since the firestorm over the withheld dividends.

A former senator with longstanding ties to President Luiz Inacio Lula da Silva, Prates got a show of support from his former colleagues in the chamber to stay on, a third source said.

Energy Minister Alexandre Silveira, who was especially vocal in his criticism of Prates, on Tuesday struck a conciliatory tone, telling reporters that he respects the Petrobras CEO and any decision about the matter will be made by Lula himself.

Prates is still awaiting a meeting with Lula, after last week's speculation, but he sees no rush to meet now, according to one of the sources. (Reporting by Lisandra Paraguassu and Rodrigo Viga Gaier; additional reporting by Ricardo Brito; Writing by Fabio Teixeira; Editing by Brad Haynes and Bill Berkrot)