This code is a snippet from a PRO*C program, a C program with embedded SQL.
v2 is an indicator variable. See here for info: https://docs.oracle.com/cd/B28359_01/appdev.111/b28427/pc_04dat.htm#i12463
An indicator variable will contain a value that relates to it's associated variable which in this case is v.v1 and is set after the operation in which it is used. In this case, after the select, you can test v2 and based on it's value it will tell you info about v.v1:
From the link above, if v2 equals:
0 - The operation was successful
-1 - A NULL was returned, inserted, or updated.
-2 - Output to a character host variable from a "long" type was truncated, but the original column length cannot be determined.
>0 - The result of a SELECT or FETCH into a character host variable was truncated. In this case, if the host variable is a multibyte character variable, the indicator value is the original column length in characters. If the host variable is not a multibye character variable, then the indicator length is the original column length in bytes.
I would suggest using it's other form, which would make things clear for the person that will maintain this after you (at least do that person a favor and comment this when you get your head around it). Always code for the person that will maintain after you. Don't you wish the person before you did that?!:
EXEC SQL SELECT
var1
into :v.v1 INDICATOR :v2
from table