Learn Portuguese (Portugal): Olhando silenciosamente para a boia, ele bebeu o chá. - Looking silently at the float, he drank the tea.

You are right that European Portuguese usually prefers a plus the infinitive for continuous actions, like ele estava a olhar for "he was looking". However, the gerund is still commonly used as an adverb. Here, olhando describes the circumstances of how he drank the tea. It works just like "while looking" or "as he looked" in English.

Why do we need the word para here? Doesn't olhar mean "to look"?

In English, you "look at" something, but in Portuguese, the verb olhar pairs with the preposition para to show the direction of your gaze. Therefore, olhando para a boia translates to looking at the float, or literally, looking towards the float.

How do we know the looking happened in the past if olhando doesn't have a past tense ending?

A gerund like olhando does not have its own tense. Instead, it acts as a background action and borrows its time frame from the main verb in the sentence. Because bebeu is in the past tense (he drank), we instantly know that the looking also took place in the past, at the exact same time.

I have seen the word for float spelled as bóia with an accent. Is boia a typo?