NICE FIND!!! That's an old used oil storage tank, for sure...tough to judge the diameter and length, but maybe 175-200 gallon. Your thoughts on how to begin are correct, and If you search for propane tank builds you can get some ideas on internal configuration, fire box, door openings, conventional or reverse-flow designs, etc. As far as cutting into it, no guarantee, but there shouldn't be any flammable/combustible vapors as long as you drain the remaining oil and then provide positive-pressure ventilation either via air compressor or an air blower. I say there shouldn't be any vapors because you do not know exactly what was in the container, as oils have a very high flash-point while some fuels and industrial solvents have much lower flash-points. There could have been some old gasoline dumped in there at some point recently, or some kind of highly volatile substance such as what may be used with industrial spray-on coatings...the smell of really old oil may mask the odors of other chemicals. If you knew the history of the tank, in detail, would help to determine what precautions are necessary. Too many unknown variables here, so I'd play it safe...drain it as best you can, then fill with water before cutting. Used oil residues can get hot enough during cutting to flash off vapors which could flash back at you through the cut at some point. It probably wouldn't be enough energy involved to cause damage, but it could still burn you...there's nothing quite like that woofing sound to get one's undivided attention.
If it smells like rank oil, it may have been just sitting around for years...really old lubricating oils in a tank with vapor space can take on a pretty nasty stench due to oxidation. I've drained gear lube and engine oil from vehicles that were parked for decades...none of it smells pretty. Even just pulling the dip-stick on a long-term dormant engine is about enough to gag a maggot. So, be ready for the stench, and as always, be sure to cut the tank in a well ventilated area.