UPDATE 4-Exxon-led group clinches Iraq's W.Qurna contract

* Exxon consortium beats three groups for West Qurna

* W.Qurna a prized oilfield with 8.7 bln bbls of reserves

* Exxon 2.325 mln bpd output target beats rival targets (Adds statement from Exxon)

By Ahmed Rasheed and Muhanad Mohammed

BAGHDAD, Nov 5 (Reuters) - An Exxon Mobil-led consortium has beaten rival Russian, French and Chinese groups to secure initial rights to develop Iraq's West Qurna field, adding momentum to Iraq's bid to unlock its oil riches.

With reserves of 8.7 billion barrels, West Qurna is among the prized Iraqi fields eyed by Western oil majors as they face flat or lower output at home and stiff competition from Chinese and Indian oil companies in bidding for oilfields elsewhere.

"The consortium led by Exxon Mobil, which includes Shell, won the contract to develop West Qurna Phase One oilfield," Oil Ministry spokesman Asim Jihad said.

The initial deal was signed in Baghdad on Thursday but needs cabinet approval before it can be finalised.

The 20-year contract is part of a raft of deals Iraq is close to formalising in a bid to catapult itself to the world's No. 3 oil producer after decades of war and economic decline.