Foreign firms are increasingly looking to Africa for oil

Reserves in the Mahogany exploration well were far greater than the 250 million barrels than the firm had earlier forecast, it said.

Tullow - which saw its shares rise 10% on the news - jointly owns the West Cape block where the drilling took place with Anadarko Petroleum.

It was one of the biggest oil finds in Africa in recent times, Tullow said.

Tullow and Anadarko firms share rights to the adjacent Tano basin, which could yield more oil.

With oil as a shot in the arm, we're going to fly

John Kufuor, President of Ghana

"Based on evidence to date, ultimate reserves are likely to be materially in excess of previous estimates, with some high potential zones still to be drilled," said Tullow chief executive Aidan Heavey.

However, Mr Heavey warned that it could be up to seven years before the oil started to flow.

'Boost to economy'

Ghana's President John Kufuor told the BBC that the discovery would give a major boost to Ghana's economy.

"Oil is money, and we need money to do the schools, the roads, the hospitals. If you find oil, you manage it well, can you complain about that?

"Even without oil, we are doing so well, already. Now, with oil as a shot in the arm, we're going to fly," he said.

Tullow Oil holds a 22.9% stake in the West Cape Three Points licence and just under 50% in the Deepwater Tano licence.

The move comes as foreign firms are increasingly tapping into Africa for oil.

Tullow shares closed up more than 12% on the news in trading in London.