The keyword local introduces a variable. Variables start with a capital letter in Oz. 

Please note: after a variable was bound, it can not be changed anymore (single assignment variables). Mutable data are supported by Oz, but not discussed in this tutorial (if you are interested, read about cells in the Oz documentation).

BTW: global variables can be introduced with the keyword declare, but global variables are only supported in the Oz Programming Interface (OPI).