An Australian man arrested in Bali on drugs charges could possibly face the death penalty after police allegedly found hashish at his home in Sanur.
The 48-year-old Australian, identified by police as Giuseppe Serafino, is believed to be from Perth.
Mr Serafino was arrested, along with a British journalist, at around 12.30pm on Saturday after officers found a small bag containing what they believed to be at least seven grams of hash at the address, head of the drugs squad at Denpasar Police Station, Gede Ganefo, said.
The Australian consulate in Bali is now making arrangements to visit Giuseppe Serafino.
Police say the man has been living at the address in Bali for the past five years.
After questioning, Mr Ganefo said the Australian man told them he had obtained it from his 54-year-old British friend, referred to as 'DM'.
The 48-year-old was told to set up a meeting with DM, who he arranged to see at On On Bar in Sanur at 4.30pm.
Upon searching his body, police allege they found a small satchel wrapped in aluminium foil with what they suspected to be hash inside.
Officers then went to DM's house where they found another satchel inside a boxing glove.
In total, police allege they discovered at least 10 grams of hash in the Brit's possession, as well as a bong.
They said he told them he got it from a man but he didn't know his identity or address.
Police say Mr Serafino is a bar owner and "entrepreneur" and the British man is a journalist residing temporarily in Sanur.
Earlier on Sunday, the Department of Foreign Affairs and Trade said they were trying to confirm reports of the arrest of an Australian man in Bali.
A spokesperson later said they had been made aware of his detention and that "our Consulate-General in Bali is making arrangements to visit the man and stands ready to provide consular assistance".