I can't comment on cutting a barrel with an oil residue that is unknown to me. However, I have cut more than thirty 275 gallon domestic oil tanks with an oxy-propane torch. I cut them length wise and use the halves to store coal and fire wood. They are also good for sorting and storing scrap metal.
They all have at least five gallons of sludge and liquid oil residue. Sometimes a fire about the size of a dinner plate will start. I zap it with a CO2 fire extinguisher thru the bung hole and continue. These are all fresh tanks recently taken out of service.
If your barrel blows up, I think it is safe to say that "your mileage may vary".
I never would have considered torching a tank until I talked to the burner at a fuel tank recyling facility. He had been doing it for years and never had an incident.
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