This quest is part of The Stone of the Tides quest chain.
The mage that is in possession of the Stone is amplifying its power through some focal point... an altar of some sort. You should be able to disrupt it by overpowering it.
As it happens, I know just the thing: an ancient dagger, another troll relic. There's just one... little problem.
My dagger? What are you, some sort of comedian?
What? Do you just want me to repeat the story of how I've gone from the best knife fighter in Booty Bay to the laughing stock of piratedom!
I lost a knife fight to one of the Bloodsail Buccaneers--bunch of right bastards they are!--and he took my blade as spoils.
It's not as though I can get by as a knife fighter with insults and a sharp tongue alone...