Brazil says believes Libya will respect contracts

BRASILIA (Reuters) - Brazil has received information the contracts of Brazilian companies will be respected by a new government in Libya despite the South American country's failure to back the rebellion, the foreign minister told Reuters on Tuesday.

His comments came as rebels appeared close to ending the 42-year rule of Muammar Gaddafi and concern grew that a new government could punish companies from countries such as China and Brazil that did not throw their support behind the rebels.

"I don't think this will happen," Foreign Minister Antonio Patriota said.

"Because we have received information that contracts will be respected even if there is a change (in government)," he added, without specifying the source of the information.

An official at Libyan rebel oil firm AGOCO told Reuters a government led by the rebels could have some "political issues" with Russia, China and Brazil over those countries' lack of support.

China responded by urging Libya to protect its investments and said their oil trade benefited both countries.

Along with Russia and China, Brazil did not back strong sanctions against Gaddafi and has supported a negotiated end to the conflict. Brazil was also among countries that abstained in March from passing a U.N. Security Council resolution authorizing the use of force to impose a no-fly zone.

Brazil still recognizes Gaddafi as the legitimate ruler of Libya, although according to the Agencia Brasil news agency a rebel flag was flying over the Libyan embassy in Brasilia on Tuesday.

Among the Brazilian firms operating in Libya are oil giant Petrobras and infrastructure company Odebrecht.

The six-month-old conflict appears to have reached its endgame as the rebels entered Gaddafi's headquarters in Tripoli on Tuesday.

Western powers, which have mostly backed the disparate opposition to Gaddafi, are moving ahead with plans to support a new administration, which will be able to tap Libya's oil wealth.

Petrobras, which has been operating in Libya since 2005, operates an exploratory offshore block in the North African country in which it has a 70 percent equity stake.

A Petrobras spokeswoman told Reuters on Tuesday the company was not thinking of selling the block as part of a previously announced asset sale plan and was not concerned about the situation there.

More than 30 governments, including the United States and the major European Union countries, recognise the rebel National Transitional Council as the legitimate representative of Libya.

(Reporting by Jeferson Ribeiro in Brasilia; Writing by Stuart Grudgings; Editing by Peter Cooney and Philip Barbara)