Negative liens over participating interests in oil and gas...

Negative liens over participating interests in oil and gas blocks and related receivables, created to secure associated enterprises' borrowings, are treated as international transactions where they restrict the asset-owning entity's ability to charge, borrow against, or expand using its operating assets. A lender's security interest may continue despite the borrower entities' bankruptcy. Arm's-length pricing must reflect the negative lien's factual character and resulting impairment of borrowing capacity; averaging bank-guarantee rates or applying loan-benchmarking approaches is not appropriate. The arm's-length price requires fresh determination under applicable transfer-pricing provisions.