Chevron and Argentina's state oil giant YPF signed a $1.2 billion agreement on Tuesday to exploit a huge oil reserve, triggering protests over the fracking it will entail.

Loma La Lata Norte, in the southern Vaca Muerta reserve area, is one of the world's largest non-conventional oil and gas shale deposits, and is expected to bring in some $15 billion in total investments.

About 1,000 indigenous Mapuche occupied two oil wells at Vaca Muerta on Tuesday, saying they were opposed to the deal.

They fear their lands will be polluted by fracking, the controversial practice of blasting water and other fluids into the ground to extract this type of oil and gas.

The environmental group Quebracho also marched in Buenos Aires against the deal.

"We Argentines are handing over to the United States our resources," Nobel peace laureate Adolfo Perez Esquivel said.

"And we are turning YPF into a major polluter, since it will use the method known as fracking."

YPF argued that the territory to be exploited is not on traditional Mapuche lands but on government-owned plots.