By Khalid Abdelaziz and Andrew Green

KHARTOUM/JUBA (Reuters) - Sudanese President Omar Hassan al-Bashir will visit South Sudan on Friday for the first time since Africa's once-largest country split in 2011, raising hope the two long-time adversaries will take steps to establish peaceful co-existence.

They agreed in March to resume cross-border oil flows and take steps to defuse tension that has plagued them since South Sudan's independence in July 2011 following a treaty which ended decades of civil war.

They still have not agreed who owns Abyei province and other regions along their disputed 2,000-km (1,200-mile) border.

Bashir had planned to visit Juba a year ago but canceled when fighting erupted along their border and almost flared into full-scale war.

Bashir, travelling with a large delegation, and his southern counterpart Salva Kiir will discuss oil and security deals, border trade as well as remaining territorial conflicts, South Sudanese Information Minister Barnaba Marial Benjamin said.

"They need to talk about the Abyei administration and things related to the Abyei area," he said.

South Sudan's secession left unresolved a long list of disputes over territory and how much the landlocked south should pay to export its oil through Sudan.

The new African country shut down its entire oil output of 350,000 barrels a day in January last year at the height of the dispute over pipeline fees - a closure that had a devastating effect on both struggling economies.

The two sides subsequently agreed to restart oil shipments, grant each others' citizens residency, increase border trade and encourage close cooperation between their central banks.

Last week, South Sudan re-launched oil production with the first oil cargo expected to reach Sudan's Red Sea export terminal at Port Sudan by the end of May.

Both nations also withdrew their troops from border areas as agreed in a deal brokered by the African Union in September.

Bashir last visited Juba on July 9, 2011 to attend the ceremony marking South Sudan's formal separation.

About two million people died in the war that was fuelled by divisions over religion, oil, ethnicity and ideology and ended in 2005 with a deal that paved the way for Juba's secession.

(Writing by Ulf Laessing; Editing by Mark Heinrich)