RIO DE JANEIRO, July 19 (Reuters) - Brazilian state-run oil company Petrobras has decided to no longer sell its Bahia-Terra cluster in northeastern Brazil, but does not rule a potential partnership in the asset, chief executive Jean Paul Prates said on Wednesday.

The decision represents a blow to smaller Brazilian oil firm Petroreconcavo and energy company Eneva, which last year had a joint offer for the cluster selected to move on to the negotiation stage.

Their bid was over $1.4 billion, Petrobras said at the time, but a deal between the parties was never inked.

Prates' announcement came at an event with journalists in Rio de Janeiro.

Bahia-Terra was part of a broader divestment plan conducted by Petrobras in recent years in order to reduce its high debt levels, which included selling refineries and non-core oil and gas fields.

Brazil's new leftist government, however, halted ongoing asset sales when it took office in January.

Bahia-Terra comprises 28 licenses to operate onshore gas and oil fields located in the state of Bahia. Its average production in early 2021 was roughly 13,500 barrels per day of oil and 660,000 cubic meters per day of gas. (Reporting by Marta Nogueira; Editing by Steven Grattan)