  We present a high resolution X-ray spectrum of the accreting X-ray pulsar,
OAO 1657--415 with HETG+ACIS-S onboard \emph{Chandra},revealing the presence of
a broad line component around $\sim$ 6.3 keV associated with the neutral iron
K$_\alpha$ line at 6.4 \rm{keV}. This is interpreted as Compton shoulder
arising from the Compton scattering of the 6.4 \rm{keV} fluorescence photons
making OAO 1657--415 the second accreting neutron star where such a feature is
detected. A Compton shoulder reveals the presence of dense matter surrounding
the X-ray source. We did not detect any periodicity in the lightcurve and
obtained an upper limit of $\sim$ 2\% for the pulse fraction during this
observation. This could be due to the smearing of the pulses when X-ray photons
are scattered from a large region around the neutron star. In addition to the
Fe K$_\alpha$, Fe $K_\beta$ and Ni $K_\alpha$ lines already reported for this
source, we also report for the first time, the presence of He-like and H-like
iron emission lines at 6.7 and 6.97 \rm{keV} in the first order HETG spectrum.
The detection of such ionized lines, indicative of a highly ionized surrounding
medium, is rare in X-ray binaries.
