BRUSSELS (BLOOMBERG) - The European Union stepped up threats of more sanctions against Turkey over its energy exploration in the eastern Mediterranean in a bid to address demands by Greece and Cyprus.

EU foreign-policy chief Josep Borrell said he would begin compiling a list of possible penalties that would be directed at individuals, but which could be expanded to include assets, ships as well as restricting Turkish access to European ports and supplies.

Such measures may be discussed at a meeting of the bloc's leaders next month if there isn't diplomatic progress.

"Turkey has to abstain from unilateral actions," Mr Borrell told reporters in Berlin after a meeting of EU foreign ministers.

"There is a growing frustration in the face of Turkey's behaviour."

The 27-nation EU is engaged in a balancing act with regard to Turkey, seeking to defend the sovereignty of member countries Greece and Cyprus while holding out hope that diplomatic initiatives can ease tensions with a strategically important partner.

Turkey plays a key role in limiting the risk of another influx of Middle Eastern refugees into the EU.

In a largely symbolic act in February, the bloc imposed asset freezes and travel bans on two employees of Turkish Petroleum Corp in response to Turkey's energy exploration off Cyprus.

"We must walk a fine line between preserving a true space for dialogue and, at the same time, showing collective strength in the defence of our common interest," Mr Borrell said.

"We want to give a serious chance to dialogue."

MARITIME DISPUTE

In the race for resources, Greece says that islands must be taken into account in delineating a country's continental shelf, in line with the United Nations Law of the Sea, which Turkey has not signed.

Ankara argues that a country's continental shelf should rather be measured from its mainland.

Offshore gas reserves around Cyprus are especially nettlesome.

The Republic of Cyprus is an EU member state and officially has sovereignty over the entire island.

But the island has been effectively divided since Turkey's military captured the northern third in 1974, following a coup attempt in which a military junta in Athens sought to unite Cyprus with Greece.

The Turkish minority's self-proclaimed state in the north, recognised only by Ankara, lays claim to any energy resources discovered off its coast.

"The EU's resort to a language of sanctions, while Turkey always underlines dialogue and diplomacy", will worsen the current problems, the Turkish Foreign Ministry said in a statement on Friday following the EU's meeting.

"Such language will only strengthen Turkey's determination."

On Saturday, Turkey's navy started two weeks of exercises in the Mediterranean.