Abstract: Severe mud losses have frequently taken place in drilling the top formation in the Lukeqin oilfield located in the central region of the Mountain of Fire, Tuha Basin. Time spent in controlling mud losses accounted for more than 60% of the time drilling the top section, badly affected the development of the Lukeqin oilfield. Lost circulation control with conventional method, cement slurry squeezing, mixed lost circulation materials (LCMs), expandable LCMs, Neotoy fiber LCMs and gel LCMs, has been proved unsuccessful. For the effective control of mud losses in drilling the top section, a composite gel LCM was developed. The gel LCM is a water soluble high molecular weight polymer whose molecular chains exhibit spatial network gel structure. Based on the shear thinning property of structured fluids, some rigid LCMs of different particle sizes and deformable particles are introduced into the gel LCM to obtain close packing and consolidation of the LCM particles, thereby enhancing the pressure bearing capacity of the formation. The gel LCM has the ability to both prevent and control mud losses. The gel LCM has been tried on the well Yubei10-20, the well Yubei8-17 and the well Yubei8-16 located in the central region of the Mountain of Fire. Compared with other wells drilled in that area, the volume of mud lost was reduced by 74.3%, time spent controlling lost circulation was saved by 93.5%, and time spent drilling the top section was saved by 57.8%. The gel LCM has been proved to be an effective LCM in controlling lost return, mud losses into caves, and mud losses into fractures with only small volume of mud return.