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The crisis in SE Asian countries will subside in a few years and their economies will regain relatively high growth in the longer term. Incremental oil demand in the region will shrink in the immediate future, pressing down oil prices. However, by 2010, rising oil demand will leave a regional demand/supply gap of 15 million B/D, and dependence on imported oil will exceed 73%, resulting in vulnerability in the world oil market. Expansion/grassroots LNG projects suffer more severely because of their large and longterm investment requirements. These two trends might delay substitution of oil/gas for coal, entailing further environmental deterioration.Indonesia will become a net oil importer by 2010 because of its growing oil demand over its crude production, while its overwhelming gas potential will create more availability for exporting gas. For Indonesia's petroleum energy future, challenges by the industries are needed in i) sustaining recoverable oil reserves and ii) shifting toward natural gas encouraged by large gas potential and for energy diversification and environmental reasons. These are to be realized by the government's policy to maintain international competitiveness as an attractive target for foreign investment and to create strategic alliances with the industries.Furthermore, considering the possibility of an unexpected disruption of oil supply, for energy selfreliance and regional security of energy supply, Indonesia should make efforts to i) boost its own petroleum resources through overseas E&P activities, ii) diversify its energy source to reduce overdependence on imported oil, iii) support improvement of inter-regional transmission infrastructures and iv) establish an emergency stockpiling program.