Brazil's state-run oil company Petrobras has not called off or altered talks to sell an unfinished fertilizer plant to Russian group Acron even as Russia's invasion of Ukraine has triggered western sanctions, two Brazilians close to the deal told Reuters on Thursday.

Petrobras reached a preliminary agreement to sell the UFN3 fertilizer project in early February, ahead of Brazil's President Jair Bolsonaro's trip to Moscow.

"Negotiations are moving forward ... based on the memo signed by both sides," said one of the sources, who requested anonymity to discuss confidential talks.

Asked about progress on the deal, Petroleo Brasileiro SA, as the state-run firm is formally known, said it had no updates.

In February, Petrobras said in a securities filing that the sale would depend on final approval by the company and the government, without providing a value for the deal.

Russia's invasion of Ukraine last week has since triggered sanctions and restrictions on Russian financial institutions, creating uncertainty about international deals like the UFN3 plant.

Other state firms and multinational corporations, including oil majors ExxonMobil and BP, have cut ties with Russia, abandoning billions of dollars in assets and condemning the Russian attack on Ukraine.

However, the Brazilian sources said that conflict and associated sanctions have not yet affected the UFN3 talks.

"For Petrobras, nothing has changed. Now, if there will be an embargo, if it will affect negotiations between the two countries, we don't know. For Petrobras, everything is normal," said one of the sources.

Bolsonaro, who caught flak from the White House for offering "solidarity" to Russia ahead of its invasion of Ukraine, reiterated on Sunday that Brazil would remain neutral in the conflict and he would not condemn Russian President Vladimir Putin.

The UFN3 plant, located in the midwest farming state of Mato Grosso do Sul, was originally designed to produce 800,000 tpy of ammonia and 1.3 MMtpy of carbamide. However, it would require substantial investment to finish after construction was halted about eight years ago.

"The information we have is that by buying the asset (the Russians) would not finish the plant (immediately). They would make a warehouse there to distribute products to Brazil and South America," said one of the sources, adding that eventually the project would involve local production.