Indonesian authorities say they will likely release an Australian teenager soon after tests showed he was not carrying illicit drugs during end-of-school celebrations on Bali resort island.

Jamie Murphy was allegedly found with a small plastic package of white powder by security staff at a nightclub in the entertainment precinct of Kuta just after midnight Tuesday. The 18-year-old was celebrating with fellow graduates from their high school in the Australian west coast city of Perth.

Bali police chief Sugeng Priyanto said Wednesday the forensic tests of the powder and of Murphy were negative and police would likely to release him soon.

Indonesia has severe penalties for breaking its drug laws, and past executions of drug convicts have caused diplomatic tensions with Australia.