How do I get past the reefs to reach Sydia?

In the Imperial town there is a old man who needs his grandaughter rescued. Talk to him and agree to rescue her from the bandits. He will give you 10k to pay the ransom, but you will need to pay up another 10k of your own. Climb to the summit of the mountain he sends you too and pay the good people. The old man will give you the golden key to open all the golden locks.

Make your way across the city to the right and open the gold lock, enter the house at the top and the guy in there is the Imperial ship builder. Now the the emperor is dead, the guard has left his position and the guy is free from Imperial threat and is grateful to you. He upgrades your boat so you can sail over the reefs.