(Adds details on Castello Branco commitments to asset sales)
By Tatiana Bautzer and Carolina Mandl
SAO PAULO, Feb 20 (Reuters) - Brazil oil company Petroleo Brasileiro SA has hired the investment banking unit of Banco Santander Brasil SA to revive efforts to sell its liquefied petroleum gas (LPG) distribution unit, four sources with knowledge of the matter said on Tuesday. Petrobras, as the state-controlled company is known, had agreed in 2016 to sell Liquigas Distribuidora SA to local rival Ultrapar Participações SA in a process managed by the investment banking unit of Itau Unibanco Holding SA.
This 2.8 billion-real ($753.86 million) deal was blocked by Brazil's antitrust watchdog CADE in February 2018. Petrobras, Santander Brasil and Itau did not immediately respond to requests for comment.
Petrobras' new Chief Executive Roberto Castello Branco has committed to accelerating asset sales and reducing the company's dominance in areas such as refining.
Petrobras announced last December it would seek to sell $26.9 billion in assets between 2019 and 2023, after it missed a $21 billion divestment target for 2017-2018.
Petrobras' asset sale program has been targeted by court decisions, including some by the Supreme Court, requiring Congressional approval for some processes. The next expected divestiture is the sale of gas pipeline network TAG, which is in its final stages.
The new Liquigas sale process will focus on offering Liquigas to investment funds or private equity firms which have oil and gas arms, one of the sources said, as a way to avoid new antitrust hurdles.
Petrobras had also considered an initial public offering of Liquigas soon after the Ultrapar deal was blocked by CADE, Reuters reported at the time.
Other strategic bidders that were competing for Liquigas in 2016, such as local rivals Copagaz and Supergasbras, controlled by SHV Energy, and Turkey's Aygaz, placed lower bids than Ultrapar, sources with knowledge of the matter said at the time.
Santander has not yet contacted potential buyers of the LPG unit, the sources said.
($1 = 3.7142 reais) (Reporting by Tatiana Bautzer; Editing by Susan Thomas and Tom Hogue)