A Bali immigration officer told Fairfax Media that police wanted to speak to Sara Connor, from NSW, and a man, Tomas Schon in connection with the alleged murder of police officer Wayan Sudarsa.

The immigration officer said police were frantically searching for the two, who had not left the country, with wanted posters circulating in hotels and police stations throughout Bali.

Posters erected at the Bounty hotel in Kuta include an image of Ms Connor's driver's licence, which says she is from Byron Bay.

Mr Sudarsa was found spread eagled on the beach in a blood-stained singlet and crumpled police uniform in front of the Pullman Hotel, with severe wounds to his head.

Bali police spokesman Made Sudana told Fairfax Media police were searching for two people based on the testimony of witnesses and what was found at the scene.

A smashed Bintang beer bottle was found near Mr Sudarsa's body. His walkie talkie was found lying in the sand, just inches from his ear, while a police cap was found nearby.

Pullman Hotel security guard Hendri Hardianto said he and another security guard were on duty at the gate in the early hours of Wednesday morning.

"It was sometime after 1am. We heard a loud scream. It wasn't a scream for help, just a scream, arrgggghhhhh, something like that. I stayed at the gate, my friend went to the beach to check it out."

A police source told Fairfax Media there was blood found on a towel and the floor of the villa in Kuta where the two foreigners were staying.

A spokesman from the Department of Foreign Affairs and Trade said DFAT was aware of media reports of a tourist or tourists possibly being implicated in the death of a Balinese policeman in Indonesia.

"We stand ready to provide consular assistance, in accordance with the Consular Services Charter, if required," he said.