Africa has plenty of oil. In fact, as a continent it accounted for just over 12 per cent of world production last year. For Ghana, however, oil is something new.

While the majors have long been producing oil in Nigeria and Angola, territories such as Ghana, Uganda and Namibia are relatively untouched. As a result, one mining analyst described the Ghanaian discovery announced by Tullow yesterday as "limited in an African context, but significant in a Ghanaian context".

Still, given the short supply of oil and ever-increasing demand for resources, in particular from India and China, any new discovery is welcomed. In this case, oil has been encountered long before the well has reached its optimum depth and it is likely that the structure housing the oil is linked to another field, which itself may turn out to hold significant reserves.

It is important not to dismiss the significance of the discovery. Many of the world's known oil-producing regions have already been significantly exploited, with areas such as the North Sea and the Gulf of Mexico starting to run low. Add to that the fact that much of the Middle East - believed to be home to about 65 per cent of global oil reserves - is off-limits for most oil firms, and discoveries in countries not traditionally known for producing oil take on a new meaning.

As far as Tullow is concerned, competition is limited in the areas of Africa in which it is operating. And while analysts have been focusing on its activities in Uganda and Namibia up to now, it was acknowledged yesterday that this latest discovery had the potential to overtake Tullow's prospects in those countries.

While shareholders will have to wait a year to hear any more about Ghana, there is no denying it is a significant project to have on the back-burner.