Only one part of building a fire pit with an oil drum is difficult, and that is cutting the steel drum. You'll need either access to and skill with a torch or a reciprocating saw, heavy steel-cutting blades and a lot of patience. For your own safety, if you don't do a lot of steel cutting, run down to your local welding shop and get it cut. That said, here's how to build a trim little fire pit for your backyard.
Setting the Oil Drum Fire Pit
Cut the bottom of the drum off 20 inches from the top lip of the drum. Add another 10 inches if you want to lay a grill over the top for cooking. If you use a cutting torch, wear eye protection and heavy leather gloves. If you use a reciprocating saw, drill a 1/2-inch hole along the cutting line to give you room to insert the cutting blade of the saw. Work slowly around the circumference of the barrel.
Lay the top of the drum (the part without a bottom) flat on the ground at the spot where you want to set up your fire pit. Mark around the bottom with spray paint or chalk to mark where to dig.
Dig a hole the size of the marked circle with straight sides. The hole should be 10 inches deep and should just fit the size of the drum top. Shave the sides as you work till the drum fits down in the hole all the way to the bottom leaving 10 to 20 inches at the top for the fire ring depending on your preferences.
Fill in dirt around the sides of the drum. Tamp the dirt with the end of the shovel to secure it tightly in the ground.
Fill the bottom of the drum with 2 or 3 inches of pea gravel to facilitate drainage. Fill the drum until the sand is 2 inches above the surrounding soil. This will help keep the bottom of the fire pit dry and well drained.
Build a tepee or log cabin-style fire within the fire ring. Don't fill to the edges with wood or allow logs to overhang the sides.