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Oslo-listed oil services company Subsea 7 Inc. (SUB.OS) Tuesday said it expects national oil companies and major operators to generally maintain their spending levels in the medium term.

In its first quarter report, which analysts at Credit Suisse said was "surprisingly strong" due to robust operations in Brazil, Subsea 7, a hydrocarbon engineering and construction company, was upbeat about continued high levels of capital spending by the biggest oil and gas entities.

But it also said: "Notwithstanding this, the whole industry is taking time to reassess projects and take advantage of potential cost reductions given the current environment."

"This is resulting in delays in contract awards and, in respect of some of the smaller players in the North Sea and North America, a cancellation or deferment of projects," it added.

The company said it is continuing to focus its efforts on reducing costs and improving supply chain efficiencies to remain competitive.

Subsea 7's first quarter net profit was steady at $55.05 million, compared with $55.08 million in the same period a year ago.

Credit Suisse, which rates Subsea 7 neutral with a target price of NOK46, said that while figures were strong, particularly when compared with Acergy's ASA (ACGY) recent "weak" results, the company's backlog of $2.9 billion at Mar. 31 was weak.

At 0840 GMT, Subsea 7 traded up NOK1.30 or 2.8% at NOK48.

Company Web site: www.subsea7.com

-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386; elizabeth.adams@dowjones.com