Petrobras Energy, a subsidiary of Brazilian state-run energy giant Petrobras (PBR) is understood to be seeking to sell its fertilizer unit at Campana, Argentina, the Estado news agency reported Friday.

The Petrobras press office in Argentina wouldn't comment on the story, which surfaced in Argentina's La Cronista newspaper, said Estado who themselves said they later confirmed the information from an anonymous source close to Petrobras Energia.

Petrobras acquired the fertilizer unit in 2002, when it bought PeCom Energia.

Last year the plant had sales of about $200 million, 14% more than in 2007.

The sale of the plant is believed to be related to falling grain prices.

Market sources told Estado that Bunge Ltd. (BG) and Canada's Agrium Inc. (AGU) were likely candidates to buy the unit.

The fertilizer plant story is the second rumored sell-off of Petrobras assets in Argentina.

On Thursday, Petrobras told Brazil's securities commission, or CVM, it wasn't in the process of selling part or all of its Argentinean refinery at San Lorenzo nor any of its gas stations.

"There are no negotiations underway to sell part or all of the San Lorenzo refinery, nor service stations, owned by Petrobras Argentina, PESA, located in Argentina," the note to the CVM stated.

The Petrobras denial was in response to a recent article by Brazil's Estado de Sao Paulo newspaper, which indicated Petrobras was going to sell the refinery.

Attempts to reach Bunge and Agrium for comment were unsuccessful.

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; john.kolodziejski@dowjones.com