The Greenlandic government, Naalakkersuisut, has suspended all new oil and gas exploration in the island, as part of efforts to address climate change concerns.

The world’s largest island is estimated to hold large unexplored deposits of oil.

According to the Geological Survey of Denmark and Greenland (GEUS), the west coast of Greenland is estimated to contain DKK18bn ($2.86bn) of de-risked barrels of oil.

Significant oil deposits are also estimated to be present below the seabed on the east coast of Greenland.

The government believes that the costs involved in extracting oil from the deposits are huge, based upon economic calculations.

Naalakkersuisut said that its decision to suspend oil and gas exploration is also driven by considerations of the impact on climate and the environment.

Greenland Minister for Business, Trade, Foreign Affairs and Climate Pele Broberg said: “International investments in the energy sector in recent years are moving away from oil and gas and into renewable energy. It is therefore natural that we emphasise business on the opportunities of the future and not on the solutions of the past.

“The decision to halt oil exploration is also the story of a population that puts the environment first.”

With the decision, new licences for oil and gas exploration in Greenland will not be issued.

Currently, the island has four active hydrocarbon exploration licences.

Held by small companies, the licences are expected to be maintained by Greenland as long as active exploration is carried out, AP reported.