Brussels - EU foreign ministers are expected to announce measures against Turkey on Monday in response to its gas drilling activities off the shore of member state Cyprus, which the bloc considers illegal.
The ministers could agree to suspend negotiations on an aviation deal, freeze high-level dialogues, halt funding earmarked for Turkey as an EU membership hopeful and restrict credits offered by the European Investment Bank, according to diplomatic sources.
Nicosia has been calling on the European Union to take action after Turkey dispatched two vessels to drill in waters considered by Cyprus to be part of its exclusive economic zone. Turkey maintains that its gas prospecting actions are in line with international law.
Experts estimate that the sea bed off Cyprus holds around 227 billion cubic metres of natural gas deposits.
The Turkish Cypriot government made the offer on Saturday that both sides of the island jointly explore and develop the offshore reserves.
Cyprus has been divided since 1974 into a predominantly Greek south and a Turkish north, whose sovereignty is recognized only by Ankara.
"Despite our best intentions to keep good neighbourly relations with Turkey, its continued escalation and challenge to the sovereignty of our member state Cyprus will inevitably lead the EU to respond in full solidarity," European Council President Donald Tusk wrote on Twitter last week.
Other issues on the ministers' agenda include efforts to bring Iran back in line with its commitments under an international nuclear deal, and discussions on a new EU police advisory mission in the Central African Republic.
Natural gas dispute in the Mediterranean