The May 15 meeting between the EU’s foreign policy chief Catherine Ashton, who leads diplomacy with Iran on behalf of six world powers, and Tehran’s chief nuclear negotiator Saeed Jalili follows a failed round of talks in Kazakhstan in April.

Its outcome may be crucial in deciding whether a new round of negotiations can take place, and when, Western diplomats say.

Before diplomacy resumes, the six powers – the United States, Russia, China, France, Britain and Germany – want to reinforce to Tehran that no deal can be reached without Iran addressing its most sensitive nuclear work, their main concern.

Iran had refused at the talks in April in Almaty to stop enriching uranium to levels that close a significant technological gap en route to making weapons-grade material.

Critics say Iran is trying to achieve the ability to make bombs. Tehran denies this, saying says it needs nuclear power for energy generation and medical purposes.

The six nations are eager to keep diplomacy on track, fearing a breakdown could drive Israel, to attack Iran, which the Jewish state, widely believed to have the only nuclear arsenal in the region, views as an existential threat.

But they need to decide, for example, whether they are willing to sweeten their demands with new offers of relief from sanctions, and whether they should step up economic pressure in the meantime.

“The (Istanbul) meeting is a follow-up to the last round of negotiations,” Ashton’s spokesman Michael Mann said on Thursday.

In Almaty, the six powers offered to ease European and U.S. restrictions on some trade in return for Tehran stopping enrichment of uranium to 20 percent fissile purity and suspending work at the underground Fordow facility where such work is done.

Tehran says, however, that such moves are not enough, and wants all major economic sanctions – in the oil and banking sectors – lifted before it makes any concessions.

PLANNING DIPLOMACY

Western diplomats say full-scale negotiations are unlikely to resume before the presidential election in Iran on June 14.

That could give them time to decide on any new steps, while domestic political situation in Iran clears up.

“The goal for each side through the fall is to consider what is its last best offer and hopefully move from where they are now,” said Cliff Kupchan, Middle East director at the Eurasia consultancy. “We have a case now of mutual intransigence.”

Some Western diplomats say new economic sanctions may be used to pressure the Tehran government’s ability to fund its work.

An EU official dealing with sanctions policy, Francesco Fini, said last month new sanctions could not be ruled out “as long as Iran doesn’t provide sufficient answers in negotiations”.

But for now, senior officials have urged caution. Secretary of State John Kerry asked for patience from U.S. senators pressing for tougher sanctions over Tehran’s nuclear ambitions, citing uncertainty in Iran ahead of the election.

Iran has yet to comment on the new meeting, but last week deputy nuclear negotiator Ali Bagheri said Tehran was waiting for Ashton to suggest a time and venue for full-scale negotiations.

The Istanbul meeting will coincide with talks in Vienna between the U.N. nuclear watchdog and Iran, which are separate from, but closely linked to, the broader diplomacy.

The International Atomic Energy Agency has tried for more than a year to coax Tehran to allow its inspectors to resume a long-stalled investigation into suspected atom bomb research by the Islamic state.

(Additional reporting by Fredrik Dahl in Vienna; Editing by Alison Williams)

The decision, taken at a meeting of EU foreign ministers in
Luxembourg, will allow European importers to buy crude oil from
Syria, if authorised by an opposition umbrella grouping.

The sanctions were imposed in 2011 in response to Assad’s
brutal crackdown on pro-democracy protests. Two years later, the
conflict is largely a stalemate, and an estimated 70,000 people
have died.

EU officials said the easing of oil sanctions would be
followed by more aid and other support for the rebels, amid
mounting fears of a humanitarian disaster throughout the region.

“The humanitarian situation is extremely alarming, the
council (of ministers) today adopted a decision that will allow
the Syrian National Coalition to take advantage of the oil and
gas reserves under its control,” the EU’s foreign policy chief,
Catherine Ashton, told reporters.

The new rules will also allow European companies to resume
investment in Syrian oil infrastructure, provided the cash goes
to the rebels, and sell them equipment related to the sector.

Buying Syrian crude will be complicated because of security
concerns and battered infrastructure, but officials said more
financial help would be offered.

SEND A SIGNAL

A prominent member of the Syrian opposition said on Monday
it would take at least another month before the group could sell
crude, largely because it still does not have a provisional
government to oversee possible sales.

Activists say Islamist rebels also are clashing with
tribesmen in eastern Syria over the oil facilities in the power
vacuum left by the civil war.

The latest U.S. government data indicate oil production in
Syria was 153,000 barrels per day in October 2012, a nearly 60
percent decline from the start of the conflict in March 2011.

“It is important for us to send a signal that we are open to
helping in other ways, in all the ways possible, including ways
adding to the finances (of the opposition),” British Foreign
Secretary William Hague told reporters in Luxembourg.

In Brussels, the head of the EU’s executive Commission, Jose
Manuel Barroso, said after a meeting with U.S. Secretary of
State John Kerry, visiting for a NATO meeting, that the EU would
give more humanitarian aid for Syria.

“The European Union is preparing a very comprehensive
package of support in the humanitarian field, because of the
refugees that we have seen increasing to unbearable numbers with
unbearable suffering,” he said.

More than 4 million people are internally displaced in Syria
and nearly 1.4 million have sought refuge in neighbouring
countries.

The Syrian crisis risks unsettling Lebanon and causing a
humanitarian catastrophe in Europe’s backyard, the EU’s
humanitarian chief said on Monday, calling for a new drive to
help refugees and strained neighbouring states.

EU governments remain divided on other support for the
rebels, with Britain leading a contested push to ease the bloc’s
embargo on sending arms to Syria.

(Editing by Alison Williams)

Lifting the sanctions gives more certainty to European firms
contemplating investments in one of the least developed markets
in Asia. Myanmar, formerly known as Burma, has significant
natural resources and borders economic giants China and India.

The EU’s move could put pressure on the United States, which
suspended sanctions in May last year and allowed U.S. companies
to invest through a general licence. Some American executives
have urged Washington to go further and lift sanctions entirely.

The EU lifted its sanctions a year after suspending them in
response to a dramatic series of reforms put in place since
Myanmar’s military stepped aside and a quasi-civilian government
was installed in 2011.

“In response to the changes that have taken place and in the
expectation that they will continue, the council (EU
governments) has decided to lift all sanctions with the
exception of the embargo on arms,” EU foreign ministers said in
a statement after a meeting in Luxembourg.

But Human Rights Watch accused authorities in Myanmar’s
western Rakhine State of crimes against humanity in the ethnic
cleansing of Rohingya Muslims last year, charges the government
dismissed as one-sided and “unacceptable”.

Myanmar opposition leader and Nobel peace prize laureate
Aung San Suu Kyi said however the clashes should not be tied to
the economic embargo.

“I do not think that we should link the economic sanctions
to the violence, which has a lot to do with rule of law and with
other social political problems.”

British Foreign Secretary William Hague said the progress
made was sufficient to justify lifting the sanctions despite the
violence.

“It is absolutely vital to continue work … to try to stop
this ethnic violence and the European Union countries have a
role to play in that, including in the training of police
forces, where we can help, (and) in promoting dialogue between
faiths,” Hague told reporters at the EU meeting.

“The problems of Burma are not over but the progress that
has been made has been substantial enough, is serious enough,
and the government there are sufficiently committed to that, for
us to take this decision,” Hague said.

SECTARIAN VIOLENCE

The EU had frozen the assets of nearly 1,000 companies and
institutions in Myanmar and banned almost 500 people from
entering the EU. It also prohibited military-related technical
help and banned investment in the mining, timber and precious
metals sectors.

Under President Thein Sein’s reforms, Suu Kyi, who spent 15
years under house arrest, has been allowed back into politics.

A succession of foreign leaders, including U.S. President
Barack Obama, have travelled to Myanmar, and the country is
attracting a surge of interest from overseas businesses keen to
enter one of Asia’s last untapped markets.

But ethnic violence continues to be a problem.

Rakhine State was swept by sectarian violence last year that
killed at least 110 people and left 120,000 homeless.

Sectarian violence erupted in Myanmar again last month and
43 people were killed. Thousands, mostly Muslims, were driven
from their homes and businesses as bloodshed spread across the
central region of the Buddhist-majority country.

New York-based Human Rights Watch said security forces were
complicit in disarming Rohingya Muslims of makeshift weapons and
standing by, or even joining in, as Rakhine Buddhist mobs killed
men, women and children in June and October 2012.

Ye Htut, a presidential spokesman and Myanmar’s deputy
Minister of Information, dismissed the report for only taking
news from “one side” in a statement on his Facebook page.

(Editing by Jon Hemming)

Talks could start within the year – if all European Union capitals agree at a meeting in June – provided Serbia puts in place all the conditions of the deal meant to address the status of the Serb-populated northern part of its former province.

“It’s a game changer for Serbia and Kosovo, it’s a game changer for the whole region of the western Balkans,” EU commissioner for enlargement Stefan Fuele told reporters in Luxembourg where EU ministers discussed Serbia’s EU path.

The negotiation process would help drive reforms in the largest country to emerge from federal Yugoslavia, luring investors to its ailing economy.

The EU executive said Belgrade had met a key condition of visible and sustainable improvement in relations with Kosovo, which broke away from Serbia in a war in 1999 and declared independence with Western backing in 2008.

Racing to clinch accession talks, Serbia last week agreed to cede its last foothold in Kosovo, in a pact aimed at ending the ethnic partition of the young country between its Albanian majority and a pocket of some 50,000 Serbs in the north.

The north Kosovo Serbs have threatened to resist integration with the rest of Kosovo, in a region bristling with weapons and deep animosity. Some 5,000 Serbs protested in the divided Kosovo town of Mitrovica on Monday.

For Kosovo, the agreement means the EU may now start discussions on an association agreement, which can carry some economic benefits.

RUBICON

“It is now crucial that the agreement is put into practice so that the next steps in (Serbia’s) convergence to Europe can be seen,” German Foreign Minister Guido Westerwelle said.

“Implementation will not be entirely easy, but I think the Rubicon has been crossed,” said Swedish Foreign Minister Carl Bildt, a former United Nations and EU envoy in the region. “There is no way back.”

Serbia’s refusal to come to terms with the loss of its southern province has held back domestic reform, fuelled instability and slowed investment in arguably the most promising economy in the former Yugoslavia.

Last week’s deal represents a sharp reversal of official Serbian policy, as the coalition government seeks the economic boost of closer EU ties.

Serbs consider Kosovo the cradle of their nation and Orthodox Christian faith, but Belgrade lost control over the territory in 1999 when NATO carried out 11 weeks of air strikes to halt the killing and expulsion of Albanian civilians by Serbian forces waging a counter-insurgency campaign.

Kosovo has been recognized by more than 90 countries, including the United States and 22 of the EU’s 27 members.

Serbia says it will never recognize Kosovo as sovereign, but last week agreed to cede its fragile control over the north Kosovo Serbs to the Kosovo authorities in Pristina, in exchange for limited autonomous powers. Serbia also pledged not to obstruct Kosovo’s path to eventual EU membership.

“This is an historic agreement,” said Dutch Foreign Minister Frans Timmermans. “It is another step towards lasting peace in the Balkans. I am very positive about this step,” said.

Serbia is unlikely to join the EU before 2020.

Of its fellow ex-Yugoslav republics, Slovenia joined in 2004, Croatia follows on July 1 and tiny Montenegro began membership talks last year. Macedonia is a candidate, Bosnia has yet to apply.

(Additional reporting by Martin Santa in Brussels, Ilona Wissenbach in Luxembourg and Matt Robinson in Belgrade; Writing by Matt Robinson and Justyna Pawlak; Editing by Robin Pomeroy)

Accession talks with Serbia could begin within the year, providing Belgrade makes progress with an historic accord struck last week to resolve relations with its former province of Kosovo. The process would help drive reform in the largest country to emerge from federal Yugoslavia, luring investors to its ailing economy.

EU governments will rule on the European Commission recommendation in late June, a few days before the bloc takes in Croatia, Serbia’s neighbor and foe during the wars that led to the collapse of Yugoslavia in the 1990s.

In its recommendation, the European Commission said Belgrade had met a key condition of visible and sustainable improvement in relations with Kosovo, which broke away from Serbia in a war in 1999 and declared independence with Western backing in 2008.

Racing to clinch accession talks, Serbia last week agreed to cede its last foothold in Kosovo, in a pact aimed at ending the ethnic partition of the young country between its Albanian majority and a pocket of some 50,000 Serbs in the north.

The north Kosovo Serbs have threatened to resist integration with the rest of Kosovo, in a region bristling with weapons and deep animosity. Some 5,000 Serbs protested in the divided Kosovo town of Mitrovica on Monday.

But Western diplomats still want to see progress on the issue before June.

CROSSED THE RUBICON

“Implementation will not be entirely easy, but I think the Rubicon has been crossed,” said Swedish Foreign Minister Carl Bildt, a former United Nations and EU envoy in the region. “There is no way back,” he said.

Serbia’s refusal to come to terms with the loss of its southern province has held back domestic reform, fuelled instability and slowed investment in arguably the most promising economy in the former Yugoslavia.

Last week’s deal represents a sharp reversal of official Serbian policy, as the coalition government seeks the economic boost of closer EU ties. The Serbian government endorsed the plan on Monday morning, following Kosovo’s parliament late on Sunday.

Serbs considers Kosovo the cradle of their nation and Orthodox Christian faith, but Belgrade lost control over the territory in 1999, when NATO carried out 11 weeks of air strikes to halt the killing and expulsion of Albanian civilians by Serbian forces waging a counter-insurgency campaign.

Kosovo has been recognized by more than 90 countries, including the United States and 22 of the EU’s 27 members.

Serbia says it will never recognize Kosovo as sovereign, but last week agreed to cede its fragile control over the north Kosovo Serbs to the Kosovo authorities in Pristina, in exchange for limited autonomous powers. Serbia also pledged not to obstruct Kosovo’s path to eventual EU membership.

“This is an historic agreement,” said Dutch Foreign Minister Frans Timmermans. “It is another step towards lasting peace in the Balkans. I am very positive about this step,” said.

Serbia is unlikely to join the EU before 2020.

Of its fellow ex-Yugoslav republics, Slovenia joined in 2004, Croatia follows on July 1 and tiny Montenegro began membership talks last year. Macedonia is a candidate, Bosnia has yet to apply and Kosovo is just starting out with a pre-accession Stabilization and Association Agreement.

(Additional reporting by Martin Santa, Adrian Croft and Matt Robinson in Belgrade; Writing by Matt Robinson; Editing by Jon Hemming)

The deal, brokered by the EU, capped six months of delicate negotiations and marks a milestone for the region’s recovery from the collapse of Yugoslavia in the 1990s.

If implemented, it could unlock Serbia’s potential as the largest market in the former Yugoslavia, taking the country from international pariah under late strongman Slobodan Milosevic to the threshold of mainstream Europe.

“And the white smoke is out! Habemus pactum! Happy:)))” Kosovo’s EU’s integration minister, Vlora Citaku, tweeted after the prime ministers of both sides initialed a two-page plan outlining an end to the ethnic partition of Kosovo between its Albanian majority and a small, Belgrade-backed pocket of some 50,000 Serbs in the north.

The schism has dogged regional stability and development since Kosovo seceded from Serbia in 2008.

The Kosovo Serbs will almost certainly resist in a region bristling with weapons and deep animosity, and were already demanding a referendum on the deal.

In exchange for limited autonomous powers for the Serb north, Serbia agreed not to block Kosovo’s path to eventual membership of the EU – a concession Kosovo hailed as recognition of independence.

“This agreement is de-jure, legal recognition by Serbia, which will open the way for Kosovo to join international organizations,” Kosovo Prime Minister Hashim Thaci, who led a guerrilla insurgency against Milosevic’s forces in 1998-99, told reporters.

Serbia says it will never recognize as sovereign a territory it considers the cradle of the Serb nation.

But Friday’s deal reflects a sea change in official policy and a realization in Serbia that it has been swimming against the tide at the expense of its economy.

Neighboring Croatia, a wartime foe of Serbia during Yugoslavia’s demise, joins the EU on July 1, a sobering reminder for many Serbs of just how far they have fallen behind.

Kosovo is recognized by over 90 countries, including the United States and 22 members of the 27-nation EU that Serbia wants to join. But it has yet to join the United Nations, something Serbian ally and U.N. veto-holder Russia holds the key to.

Diplomats said the accord was likely to win a provisional green light on Monday from the EU for the start of membership talks with Serbia. A formal decision would come in June.

DEAL TOUGH TO ENFORCE

The accession process could help unlock the country’s potential as the largest market in the former Yugoslavia and lure much-needed foreign investment to its struggling economy.

“It’s very important that now what we are seeing is a step away from the past and for both of them a step closer to Europe,” said EU foreign policy chief Catherine Ashton, who brokered the deal.

Serbian officials said it remained subject to approval by “state bodies” back in Belgrade. “We will inform the EU by letter on Monday whether we accept the deal or not,” Prime Minister Ivica Dacic told reporters.

Western diplomats said there was very little chance of Serbia reversing course, but cautioned that the real test lay in the implementation.

Germany, in particular, “has been very clear on the importance of practical implementation, so that they won’t be burned,” said a senior Western diplomat, who spoke on condition of anonymity.

Kosovo’s Thaci said: “This agreement will help us heal wounds of the past, if we have the wisdom and knowledge to implement it in practice.”

Under the terms, the north of Kosovo will be absorbed into the legal framework of the country but retain limited autonomy in areas of health, education, policing and courts.

In a sign of possible resistance to come, Serb municipal lawmakers in northern Kosovo demanded a referendum on whether Kosovo should be part of Serbia or Belgrade should accept the conditions set down by the EU to clinch accession talks.

Steeped in history and myth for Serbs, Kosovo broke away from Serbia in 1999, when NATO carried out 11 weeks of air strikes to halt the killing and expulsion of ethnic Albanians by Serbian military forces under Milosevic waging a brutal counter-insurgency campaign.

Kosovo became a ward of the United Nations, but Belgrade retained de facto control over the northern Serb pocket. The partition has frequently flared into violence and frustrated NATO’s hopes of cutting back a costly peace force that still numbers 6,000 soldiers.

“Likely to be taken as a positive by the market, as this will further anchor reforms in Serbia, albeit accession negotiations are likely to be very long,” said Tim Ash, head of emerging markets research at Standard Bank.

(Additional reporting by Adrian Croft and Justyna Pawlak in Brussels, Fatos Bytyci in Pristina and Matt Robinson in Belgrade; Writing by Matt Robinson; Editing by Mark Heinrich and Mike Collett-White)

Next week, EU governments will allow purchases of oil from
the opposition, as part of a broader effort to help rebels
waging a two-year uprising against Assad in which an estimated
70,000 people have died. The conflict is broadly in stalemate.

The rebels have complained to the United Nations bodies, the
official said, that sanctions – imposed in response to Assad’s
brutal crackdown on pro-democracy protests – are hurting
civilians and asked for wide-ranging economic help.

“This is a response to strong criticism that our sanctions
are blindly hitting the regime but also the civilian population.
This wasn’t our intention,” the official said, speaking on
condition of anonymity.

More sanctions relief would be in store if the easing of the
oil embargo is successful, he said. “If it works, we may try to
go further. This is a bit of a pragmatic experiment.”

The rebels have gained control over some of Syria’s
oil-producing territory, including in the eastern provinces of
Hasakah and Deir al-Zor, although these areas remain vulnerable
to shelling and air strikes by government forces.

Oil sales could give the rebels much-needed cash for
infrastructure repairs and to build up local governance, and,
possibly, to fund purchases of arms.

But experts say immediate economic benefit to the rebels may
be limited, largely because European companies may be reluctant
to wade into the conflict and the rebels will struggle to prop
up battered infrastructure to ship oil out.

The official sidestepped such concerns, and said that
although the conflict in Syria was showing no sign of abating,
there was “some kind of control when it came to exporting
energy”.

The official said the EU would also look into ways to
address energy shortages in rebel-held areas. “That’s perhaps
what we should focus on,” he said. “What people need is
electricity.”

International organisations, as well as the EU, keep close
contacts with rebel representatives regarding such issues at a
coordination centre set up in a southern Turkish town of
Gaziantep near the Syrian border, he said.

“If opposition-held areas can in due course start producing
oil, or need to consume it, then it is reasonable that we would
help them,” a British diplomat said. “We need to be helping
economic development in these areas. This is the kind of thing
where we need to continue keeping sanctions under review.”

Other EU diplomats said that in the coming weeks, EU
governments would examine the possibility of easing trade
sanctions to help rebel groups, focusing on trade credits and
opening the possibility for banking with Europe.

So far, European governments have moved cautiously in
helping the Syrian rebels, amid concerns of fragmentation and
the presence of militant Islamists in their ranks.

(Additional reporting by Ethan Bilby; Editing by Jon Hemming)

EU foreign policy chief Catherine Ashton said the prime ministers of both sides had initialled an agreement during talks in Brussels, capping six months of delicate negotiations after over a decade of deep animosity since Kosovo broke away in war.

“It’s very important that now what we are seeing is a step away from the past and for both of them a step closer to Europe,” Ashton told reporters.

Kosovo’s EU’s integration minister, Vlora Citaku, tweeted: “And the white smoke is out! Habemus pactum! Happy:)))”

Serbian officials said the deal remained subject to approval by “state bodies” back in Belgrade. “We will inform the EU by letter on Monday whether we accept the deal or not,” Serbian Prime Minister Ivica Dacic told reporters. EU diplomats said there was very little chance of Serbia reversing course.

The pact tackles the ethnic partition of Kosovo between its Albanian majority and a small Belgrade-backed pocket of some 50,000 Serbs in the north, a schism that has dogged regional stability since Kosovo seceded from Serbia in 2008.

It will also likely open the door to greater international integration of the young state, the last to emerge from the ashes of federal Yugoslavia but which Belgrade considers the cradle of the Serb nation.

Serbia hopes it will be enough to win the green light on Monday from the EU’s 27 members for the start of talks on Serbian accession to the bloc.

That process could unlock Serbia’s potential as the largest market in the former Yugoslavia and lure much-needed foreign investment to its struggling economy.

A source in the European Commission, the EU’s executive arm, said the Commission would likely recommend the start of accession negotiations with Serbia, and set Kosovo on the road to a pre-accession association agreement.

An excerpt of the deal seen by Reuters said that Serbia and Kosovo had agreed not to block each other’s EU accession. “It is agreed that neither side will block or encourage others to block the other side’s progress in their respective EU paths,” point 14 of the accord states.

“The agreement reached today between #Kosovo and #Serbia is recognition of Kosovo independence by Serbia,” tweeted Kosovo Foreign Minister Enver Hoxhaj.

DEAL MAY BE TOUGH TO ENFORCE

Prime Minister Hashim Thaci, who led a guerrilla army in an insurgency against Serb forces in 1998-99, told reporters: “This agreement represents a new era … This agreement will help us heal wounds of the past, if we have the wisdom and knowledge to implement it in practice.”

Under the agreement, the north of Kosovo will be absorbed into the legal framework of the country but retain limited autonomy in areas of health, education, policing and courts.

Implementation will not be easy, in a region bristling with weapons and sectarian animosity.

In a sign of possible resistance to come, Serb municipal lawmakers in northern Kosovo demanded a referendum on whether Kosovo should be part of Serbia or Belgrade should accept the conditions set down by the EU to clinch accession talks.

The agreement marks a seminal moment in the region’s recovery from Yugoslavia’s bloody collapse, when some 150,000 people were killed in wars in Bosnia, Croatia and Kosovo in the last decade of the 20th century.

Serbia was an international pariah until strongman Slobodan Milosevic was ousted in 2000.

After neighbouring Croatia joins the EU on July 1, anchoring Serbia in accession talks would belatedly help to drive reform and cement stability.

“Likely to be taken as a positive by the market, as this will further anchor reforms in Serbia, albeit accession negotiations are likely to be very long,” said Tim Ash, head of emerging markets research at Standard Bank.

Though Serbia says it will never recognise Kosovo as a sovereign state, the deal reflects a sea change in official policy given that Belgrade wants to come to terms with the loss of its southern province in exchange for the economic boost of closer ties with the EU.

Steeped in history and myth for Serbs, Kosovo broke away from Serbia in 1999, when NATO carried out 11 weeks of air strikes to halt the killing and expulsion of ethnic Albanians by Serbian military forces under Milosevic waging a brutal counter-insurgency campaign.

Kosovo became a ward of the United Nations, but Belgrade retained de facto control over the northern Serb pocket. The partition has frequently flared into violence and frustrated NATO’s hopes of cutting back a costly peace force that still numbers 6,000 soldiers.

(Additional reporting by Adrian Croft and Justyna Pawlak in Brussels, Fatos Bytyci in Pristina and Matt Robinson in Belgrade; Writing by Matt Robinson; Editing by Mark Heinrich)

The EU executive is anxious to present a united front, while
dominant supplier Russia attempts a divide-and-rule strategy by
negotiating gas supplies with individual EU member states with
conflicting interests.

The bloc has been seeking to bring in non-Russian gas to
improve energy security after pricing spats between Russia and
the Ukraine disrupted some exports to the European Union.

It is looking to the giant Shah Deniz gas field in
Azerbaijan as a near-term solution and in June, the Shah Deniz
consortium is expected to choose one of the two pipelines vying
to ship its gas — Nabucco West or the Trans Adriatic Pipeline
(TAP).

“What we most need to avoid is a discussion on the relative
merits of Nabucco West and TAP,” Oettinger wrote in a letter to
EU foreign affairs chief Catherine Ashton, warning that could
lead to “a needless split in European solidarity”.

“Current independent forecasts suggest that additional
import capacities will be needed, so that both projects could
eventually be realised.”

The European Commission, the EU executive, was long regarded
as pro-Nabucco, but its official stance is that it favours
neither project and aims only to diversify supplies to improve
energy security.

EU foreign ministers will debate the issue along with other
aspects of energy security at a meeting in Luxembourg on Monday.

A briefing note to ministers points, for example, to the
need to use energy cooperation to forge closer political ties in
the volatile areas of the Caucasus, central Asia and the Middle
East.

SHAH DENIZ DECISION

Russia, angry over Europe’s efforts to diversify, supplies
around 30 percent of all EU gas imports, including nearly 100
percent in some EU states.

Relations have been further soured by EU efforts to enforce
a law that obliges Russia to sell off infrastructure and an EU
competition case against Russia’s gas export monopoly Gazprom.

The briefing note for Monday’s meeting, also seen by
Reuters, says it is up to the “commercial actors” in the Shah
Deniz consortium to decide.

But, it says, “one of the criteria for that decision is the
extent to which a pipeline contributes to European Union policy
objectives”.

The Nabucco West project slices through the most
Russian-reliant regions of central and Eastern Europe.

It would ship gas from Turkey’s western border via Bulgaria,
Romania, Hungary and into the Baumgarten hub in Austria.

Analysts say the advantages of TAP, which would run through
Albania and Greece into Italy, include a less state-dominated
shareholder structure and it has appeal in debt-ridden Greece as
a private sector injection of capital and jobs.

TAP’s shareholders are Swiss energy company Axpo,
Norway’s Statoil and Germany’s E.ON Ruhrgas
. Its rival Nabucco West includes Austria’s OMV
, Hungary’s MOL, Turkey’s Botas and Romania’s
Transgaz. RWE sold its stake to OMV.

Shareholders in Nabucco West are in talks to add at least
one other European company to the project.

The Shah Deniz consortium, which comprises BP,
Statoil, Azeri energy company SOCAR and Total, has a
50-percent equity option in both TAP and Nabucco.

Production from the second phase of the giant Shah Deniz gas
field is expected to begin in 2018 or 2019 and rise to 16
billion cubic metres (bcm) per year, with 10 bcm earmarked for
Europe and 6 bcm for Turkey.

Russia’s response to Nabucco and TAP is the massive South
Stream project to bypass Ukraine and carry around 60 bcm.

The note to EU foreign ministers says that should this
project eventually go ahead, the aim would be for it to be “in
full compliance with European Union law.”

The EU agreed a year ago to suspend most of its sanctions against Myanmar for a year, but it is now expected to go further by agreeing “to lift all sanctions with the exception of the embargo on arms”, the document said.

The step, which was agreed by EU ambassadors on Wednesday, paving the way for ministerial approval on Monday, will allow European companies to invest in Myanmar, which has significant natural resources and borders economic giants China and India.

“The EU is willing to open a new chapter in its relations with Myanmar, building a lasting partnership,” said the document which contains the draft conclusions for Monday’s EU foreign ministers’ meeting.

The EU had frozen the assets of nearly 1,000 companies and institutions in Myanmar and banned almost 500 people from entering the EU. It also prohibited military-related technical help and banned investment in the mining, timber and precious metals sectors.

The United States and other Western countries have been easing sanctions on Myanmar to reward a wave of political and economic reforms put in place since Myanmar’s military stepped aside and a quasi-civilian government was installed in 2011.

Under President Thein Sein’s reforms, opposition leader and Nobel peace prize laureate Aung San Suu Kyi, who spent 17 years under house arrest, has been allowed back into politics and has made a number of visits abroad.

A succession of foreign leaders, including U.S. President Barack Obama, have travelled to Myanmar, formerly known as Burma, and the country is attracting a surge of interest from overseas businesses keen to enter one of the last untapped markets in Asia.

In February, Danish brewer Carlsberg said it was returning to Myanmar following the easing of international sanctions which forced it out of the country in the mid-1990s.

While praising moves towards democracy and government efforts against corruption, the EU document called on Myanmar to release unconditionally remaining political prisoners.

It also called on the government to deal with inter-communal violence and take urgent action to deal with humanitarian risks facing displaced people in Rakhine State, which was swept by sectarian violence last year that killed at least 110 people and left 120,000 homeless.

Sectarian violence erupted again last month and 43 people were killed in Buddhist-majority Myanmar. Thousands, mostly Muslims, were driven from their homes and businesses as bloodshed spread across the central region of the country.

(Editing by Jon Hemming)