Chandra is a 1978 batch officer from the Uttar Pradesh cadre and previously was Secretary, Department of Industrial Policy and Promotion before coming to the Oil Ministry in March.
Sources said the Narendra Modi government was considering names of P K Sinha, a 1977-batch officer from the Madhya Pradesh cadre, who is the Union power secretary, and Chandra for the top job.
Chandra seems to have stolen a march ahead of Sinha, they said.
Going strictly by seniority, Sutanu Behuria, Himachal Pradesh cadre IAS of 1976 batch and current secretary of heavy industries department, is the senior most but he is believed to be not under consideration.
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Seth will complete his extended tenure on June 13. The previous Manmohan Singh-led UPA government had in 2011 appointed Seth, a 1974 batch IAS officer of Uttar Pradesh cadre, as cabinet secretary for a fixed two-year tenure.
He joined on on June 14, 2011 was due to complete his term last year when the UPA government gave him an extension by one year.
If appointed, Chandra will be the 31st cabinet secretary of India.
Seth's predecessor K M Chandrasekhar had got two extensions and served as cabinet secretary for four years. Similarly, Chandrasekhar's predecessor B K Chaturvedi had got a one-year extension and served for three years from June 14, 2004 to June 13, 2007.