The Nigerian energy sector is primarily dominated by fossil fuels, significantly relying on oil and gas. According to the International Energy Agency (IEA), in 2023, fossil fuels accounted for approximately 80% of Nigeria’s energy production, while renewables contributed around 13%. However, there is a growing emphasis on integrating renewable energy sources to address energy security, sustainability, and climate change. Currently, this sector faces significant challenges, including regulatory changes, workforce transformations, digital innovations, and sustainable practices. Therefore, it is crucial to understand the critical role that Organisational Development (OD) would play as a strategic driver of the transformation needed to take organisations to their desired state.
By optimising the ideal organisational structures with the proper operations, systems, and processes in place, attracting the right talent, improving leadership skills, and promoting agility, OD facilitates sustainable growth and operational excellence, which is required to thrive today in this sector. Companies with a development and transformative mindset can better navigate uncertainty, build stakeholder confidence, and enhance their competitiveness in the market.
Industry Challenges and Opportunities
In 2025, the Nigerian energy sector is poised for significant developments, with a deeper focus on traditional oil and gas and the flourishing renewable energy sector, where we have seen new organisations emerge, all driven by government reforms and massive investment opportunities. We see initiatives like the Nigeria-Morocco gas pipeline, a 6,800-kilometer project linking Nigeria’s gas reserves to Morocco, which is expected to boost energy security and regional economic growth and support the shift towards renewable energy across West Africa, amongst other initiatives. However, it is characterised by volatility, regulatory uncertainties, and the urgent need for modernisation.
Some key challenges faced by organisations within this sector are:
- Regulatory Dynamics– Frequent shifts in government policies, local content requirements, and compliance mandates require companies to remain agile and adaptable. Failure to anticipate or respond proactively to these changes can result in costly penalties, project delays, and reputational risks.
- Talent and Workforce Transformation – With an ageing workforce, growing skills gaps, and the increasing need for digital competencies, companies must invest in targeted upskilling and reskilling initiatives. According to the Nigerian Bureau of Statistics (NBS), over 60% of energy sector professionals are nearing retirement age, with a 30% skill gap in digital and sustainability practices. The future energy workforce must be equipped with new skills in automation, renewable energy, and sustainability practices, so organisations need to start rethinking their talent management strategies.
- Technological Disruption – Artificial Intelligence (AI), automation, and the Internet of Things (IoT) have created a culture of innovation and continuous learning. According to Statista, the adoption of automation technologies in Nigeria’s oil and gas sector increased by 25% in 2024, driving productivity gains. Companies that fail to integrate digital transformation into their operations risk falling behind in efficiency, productivity, and competitiveness.
- Sustainability and ESG Compliance – Global and local energy transition trends require organisations to align with Environmental, Social, and Governance (ESG) principles. Stakeholders, including investors and customers, are increasingly demanding sustainable practices that reduce carbon footprints and promote environmental responsibility. A study by the Nigerian Energy Commission shows that 40% of energy firms have integrated ESG principles, contributing to a 15% reduction in carbon emissions in 2024.
- Operational Efficiency and Cost Pressures – Rising operational costs, inefficiencies in supply chains, and fluctuating oil prices require energy firms to rethink their organisational structures and performance management systems. Lean processes, agile business models, and robust risk management strategies are essential for profitability.
Despite these challenges, immense opportunities exist for energy companies that embrace strategic OD interventions to enhance agility, productivity, and stakeholder engagement. Firms that take proactive steps to address these concerns can position themselves as leaders in the industry and gain a competitive advantage.
The Role of OD in Energy Sector Transformation
Organisational Development plays a pivotal role in helping Nigerian energy firms navigate disruption and drive growth through:
1. Culture Transformation and Change Management – Organisations must develop and nurture an adaptive, innovation-driven culture that embraces change and fosters resilience. A structured OD approach helps companies align their people, processes, and strategies to manage transitions successfully.
2. Leadership Development and Succession Planning – Building strong leadership pipelines is crucial for long-term sustainability. OD-driven leadership development programs ensure that future executives are equipped with the skills needed to drive vision, make strategic decisions, and promote high-performance cultures.
3. Workforce Upskilling and Talent Optimisation – OD strategies focus on assessing workforce capabilities and designing learning and development programs to future-proof skills. Companies investing in upskilling initiatives can improve employee retention, reduce turnover costs, and ensure operational excellence.
4. AI and Digital Transformation Integration – OD facilitates the integration of AI-driven HR solutions, predictive analytics, and automation tools that streamline business operations and enhance efficiency. Companies that embrace digital transformation improve productivity and decision-making while reducing human error and inefficiencies.
5. Performance Optimisation and Employee Engagement – Implementing agile performance management systems ensures that individual and team objectives align with business goals. Enhanced employee engagement and motivation increase productivity and innovation within the workforce.
Case Studies and Practical Insights
Energy firms globally and in Nigeria have successfully leveraged OD interventions to drive transformation and achieve operational excellence. Some examples include:
- One of the leading Oil and Gas Companies globally adopted a digital talent strategy, enhancing workforce capabilities through AI-driven learning platforms. This resulted in a 40% increase in employee productivity and enhanced digital skills development.
- A Nigerian Power Utility Firm implemented an agile performance management system, leading to a 30% increase in operational efficiency and improved customer service delivery.
- An International Renewable Energy Firm, by restructuring its leadership development framework, significantly improved its decision-making processes and innovation output, fostering a high-performance culture that drove revenue growth.
Phillips Consulting Limited (pcl.) has driven similar OD initiatives, enabling energy organisations to build resilient, high-performing, and future-ready workplaces. Our tailored interventions have helped firms achieve strategic alignment, enhance workforce effectiveness, and optimise their business operations.
pcl. Your Strategic OD Partner in Energy Transformation
At pcl., we understand the complexities of the Nigerian energy sector and the strategic role OD plays in driving sustainable growth. Our expertise spans leadership development, change management, workforce transformation, and digital integration—tailored to meet the evolving needs of energy organisations.
We offer specialised consulting services that help companies:
- Design and implement culture transformation initiatives that align with strategic objectives.
- Develop leadership and talent management strategies that foster innovation and long-term success.
- Integrate digital transformation and AI-driven processes to enhance workforce productivity.
- Optimise performance management frameworks to improve organisational agility and resilience.
Partner with us to unlock the full potential of your workforce, enhance operational efficiency, and position your organisation for long-term success in Nigeria’s dynamic energy landscape.
Let’s power the future together. Contact pcl. today to explore transformative OD solutions for your organisation.
Written by:
Tracy Afolabi-Johnson
Senior Consultant