Indonesian police are considering charging a Sydney woman with distributing drugs, an offence that carries a maximum 20-year jail term.

New Zealand national Leeza Tracey Ormsby, 37, was arrested at a villa north of Kuta last Wednesday and remains in police custody in Bali.

Police say they acted on a tip-off about drugs at a party when they allegedly found the Paddington resident in possession of a marijuana cigarette.

A police report says officers then searched a villa, where they seized six tablets of hashish, seven tablets of MDMA, electronic scales, duct tape and wrapping plastic.

Police say they have taken a sample of Ormsby’s urine for drug testing but the results are not yet available.

Agus Tri Waluyo, the head of Denpasar’s drug squad, says officers are considering charging Ormsby with possessing and distributing narcotics.

Possession carries a penalty of between four and 12 years’ jail, while distributing carries a jail term of between five and 20 years.

Major Waluyo says Ormsby told police there had been a party at the villa several days prior to their “ambush,” but that her five friends had since left Bali.

It’s understood the Rotorua-born woman has legal representation and consular assistance.

Her arrest came just two days after Corby was released on parole from Bali’s Kerobokan jail.

The Australian was sentenced to 20 years’ jail but could have been sentenced to death after being arrested in 2004 at Denpasar’s airport with 4.1 kilograms of marijuana.

Corby served nine years before qualifying to serve her parole in Bali.