Losses while drilling are a serious concern to oilfield industry. Loss of expensive drilling fluid increases the overall cost of the well. Rig time spent curing the losses can represent significant cost overruns for the well. In extreme cases well control may become an issue. The general practice to control losses starts from diagnosis of the cause. The common solutions to manage the loss circulation problem include drilling fluid treatments involving decreasing the density, controlling the viscosity and addition of lost circulation materials (LCM), controlling the drilling parameters, and placement of cement plugs. This paper will discuss the treatment of drilling fluid with Advanced Engineered Fiber (AEF), the mechanism of action of AEF and its successful application as a solution for lost circulation in Pakistan. Introduction Lost circulation is a common problem encountered during drilling. This problem can result from minor to extremely expensive and dangerous situations. The severity and persistence of a lost circulation problem are determined by the type of formation to which fluid is being lost. Generally lost circulation can occur in cavernous or vugular formations, highly permeable zones and fractured (natural or induced) formations. OMV in Pakistan had serious lost circulation problems in the Sawan field while drilling the Sui Main Limestone (SML) and Ranikot formations. Geologically Sui Main Limestone and Ranikot formations are fractured lime stones interlayered with thin beds of sand stone and clay stone respectively. Furthermore it is hard to reduce drilling fluid density below 8.9 lbm/gal due to stability problems of the Ghazij shale overlain SML Stone (fig-1) Losses in this area could range anywhere from 3,000 bbl of mud per well in the SML formation. While drilling the Sawan-3 well more than 20,000 bbl of drilling fluid were lost and the rig spent 8 days fighting the losses using all the conventional LCM available on the rig. Three cement plugs were required to control losses and completed the well after the unsuccessful LCM treatments. Table -1 shows the volume of drilling fluid lost in some off set wells in the area. Depending on the severity of the problem several techniques and products are available, the most common technique is to pump a high concentration LCM pill with fibers, flakes or granules, alone or in combination. Indeed, the pill pumped can fail and be lost to the formation if the LCM particles are smaller than 1/3 of the pore size or fracture width in the thief zone. The LCM's effectiveness is influenced by the material type, particle size distribution and optimum concentration determined by the lost circulation scenario (pore size or fracture width).To control losses into a rock matrix, the drilling fluid must contain some particles that are at least one-third as large as the flow path.