Rescuers are searching for a group of Australians missing on a boat after an earthquake off the Indonesian island of Sumatra.

The undersea quake, which had a magnitude of at least 7.5, struck at 9:42pm (local time) yesterday off the Mentawai Islands.

Indonesian authorities say 23 people are confirmed dead across the region and more than 160 are missing.

It is believed there are nine Australians on the surfing charter boat, which is thought to have been in the affected area at the time of the quake.

The boat, the Southern Cross, a traditional Indonesian-style wooden boat operated by Sumatran Surfariis, was due to return to West Sumatra next week.

Two charter boats are searching for the group of surfers.

A Department of Foreign Affairs (DFAT) spokeswoman says efforts to contact the boat have been hampered by poor telephone coverage.

Dave Jenkins from the humanitarian organisation SurfAid says the boat is skippered by Australian Chris Scurrah.

"He's been around here for a long time. He knew to contact in if he could," Mr Jenkins said.

"So that's why we're extra concerned.

"They were closest to the epicentre on a little island down that way, so we have significant concerns about them.

"We are coordinating with the charter boat down there at the moment to get down there as soon as we can to check [on] them."

The boat is not equipped with a satellite phone.

Foreign Minister Kevin Rudd says officials are continuing in their efforts to locate the boat.

"Of course it's possible that we simply have a telecommunications problem - the mobile phone system is down - but to be absolutely certain, I have been in contact with our ambassador in Jakarta to ensure that all efforts are being made to make contact with the vessel and to work with the Indonesian authorities on the ground concerning their whereabouts and their wellbeing," he said.

Indonesian emergency officials are relying on two-way radios to gather information about damage and injuries.

A tsunami warning was cancelled soon after it was issued last night, however officials say a wall of water did wash ashore.

The head of Indonesia's disasters management agency's office in West Sumatra says water spread 600 metres inland on remote Sikakap Island in the Mentawai group.

He says the southern part of the chain of islands was the hardest hit.

Twenty people died on south Pagai Island and at least 167 people are missing from two villages.

Mr Jenkins says several villages were hit.

"We have unconfirmed news that one child at least, and perhaps others have been washed away," he said.

Residents reported shaking as far away as the West Sumatran provincial capital of Padang.

Rick Hallett, an Australian who runs a boat charter business in Indonesia, says waves generated by the quake carried bystanders up to 200 metres inland.

DFAT says it has not received any reports to suggest Australians are injured.

'They'll be fine'

Jamie Gray, who runs Perfect Wave Travel Company - which also runs surfing tours in the Mentawai Islands - says he is confident the missing surfers will be fine.

"We've got about 12 boats that we represent in the area and all of those are present and accounted for - all our clients... have been located and we're working to get them back," he said.

"In regards to the missing charter and Chris Scurrah, I'm pretty sure that they'll be fine.

"He's a great operator and I'm positive that, if there's any problems, he'll be able to get them out of it, and there's people going down there as we speak to try and find them.

"The Southern Cross is a great reputable boat. It's one of the traditionally built Indonesian wood-hull boats.

"Chris ensures the thing is well maintained. And by all accounts, hopefully everything will be OK with them too."

Mr Gray says the boats are built for rough weather and the crews that man the boats are used to rough conditions.

"The area is extremely rough. The crossing's at 70 nautical miles and look, it can take quite a long time in some really rough seas," he said.

"So anybody working on those boats is very experienced in regards to navigating those type of oceans."

But he says it is unusual the Southern Cross does not have a satellite phone.

"Most of the boats that we represent all have satellite phones or intermittent communication with CBs and radio, so yes, it does seem unusual," he said.

"At the end of the day, we represent certain operators down there that do have all the safety standards, otherwise we wouldn't represent them. And a sat phone is one of them.

"I don't know why Chris hasn't got a sat phone. I wouldn't have a clue."